New research from digital contractor payroll solution firm Cool Company has revealed that 46 per cent of contractors have increased their rates this year. The poll, conducted among 500 contractors, found that 6 per cent had increased their rates “a lot” during 2022.
The research, which aimed to assess how contractors were coping after more than a year since the implementation of IR35, revealed that just 37 per cent of contractors had not changed their rates this year. 15 per cent had decreased what they were charging and 2 per cent decreased their rates “a lot”.
The survey also highlighted the concerns facing some freelancers, with 27 per cent expecting poor cash flow to be a major challenge this year, leading to many increasing their rates. 22 per cent were concerned about the rising costs for labour and materials, while another 22 per cent said IR35 had made it difficult to find new clients.
Despite these challenges, however, 45 per cent of respondents said that they were feeling positive about contracting overall, with just 16 per cent saying that they felt negative.
Commenting on the findings, Cool Company Head of B2C Business UK, Kris Simpson, said: “The implementation of IR35 was extremely concerning for many contractors. But although it’s not been easy, the impact has not been as devastating as many first feared. And the majority of contractors have found ways to work with the legislation. Whether through the use of umbrella payroll companies, smaller sized clients, or overseas clients.”
“The concern now is that if cash flow continues to be problematic, contractors are going to be faced with increasing their prices further, making their services a less viable option for the general business community. What is certain, is that contractors will choose to work with companies offering reliable and fast payment, as chasing overdue invoices and worrying about payment are both uncertainties contractors could do without in the current climate.”
Simpson added: “What we don’t want is contractors re-evaluating their career choice, again. With the overall contribution to the UK economy by contracting and freelancing professionals resting at around £119 billion, that could have a dramatic impact on the economy.”
“While the majority of contractors are still feeling positive about the industry, business owners need to take steps to ensure that invoices are cleared promptly and that contractors are treated as professionals, if they wish to secure their services into the future.”
