With Brexit looming, burgeoning IR35 outcry and Making Tax Digital dominating contracting circles for some time now, the continued growth and success of the self-employed community has been somewhat buried.
Despite a backdrop of economic uncertainty and anxiety-inducing legislative reform, the self-employed community has thrived in recent years. Recently released data from the Office for National Statistics shows that the number of self-employed people in the UK rose by an impressive 63,000 to 4.84 million in the last quarter of 2018.
The data further emphasises what has been clear for some time now – that the self-employed are the bedrock of the UK’s strong labour market. Almost 15% of the entire UK workforce now work for themselves, which is almost as much as the public sector in its entirety.
As the Economic Policy Advisor at IPSE Ryan Barnett noted, in a just political landscape these numbers would push the UK government to acknowledge the ambition and innovation of those willing to make the leap and run their own business. He comments:
‘It’s excellent to see the rise in self-employment revealed in the data. When the government celebrates the strength of the labour market, it must remember that a major part of that is down to the UK’s burgeoning self-employed sector.
As of the end of 2018, there were 4.84 million self-employed people in the country.
In a time of gloomy economic forecasts and poor GDP growth, the strength of our labour market and especially our self-employed sector is welcome good news.’
It begs the question that if the contracting industry is able to grow – even in an often inhospitable environment - how can we encourage more people to make the leap of faith and begin working for themselves?
Jonathan Lima-Matthews, Senior Policy Advisor at IPSE, believes that a good starting point would be tackling what many have referred to as the ‘scourge’ of late payment.
With many contractors that otherwise talented in their fields holding back from taking the plunge due to the uncertainty of pay (not to mention the loss of employee rights and benefits), it’s evident that a change needs to be made.
As Lima-Matthews says: ‘The culture of late payment is the scourge of the UK’s smallest businesses, the self-employed. It is a serious problem across the UK.
IPSE research has shown freelancers spend an average of 20 days a year chasing late payments, with 43% doing work they were not paid for at some point in their career.’
It’s also worth us pointing out that having another type of safety net in place can make things much easier. Making the move from ‘regular’ employment to contracting means that you’ll no longer be protected by an employer should you make mistakes, cause injury to someone else or fall foul of the dreaded IR35 investigation.
It’s well worth shopping around for some insurance before you make the jump – protecting your business is protecting your family, and peace of mind when it comes to your income is invaluable. Read our insurance guide for new contractors and freelancers here.
No matter what lies over the horizon, the contracting and freelancing workforce has proved itself tenacious – it’s not going anywhere.