The latest freelancer confidence index from the Association of Independent Professionals and the Self-Employed (IPSE) has shown that freelancer confidence in the UK economy has deteriorated in Q2 2022 compared to Q1 2022.
The index shows that freelancer confidence has fallen to –56.7 in the second quarter, compared to –27.4 in Q1. The Q2 score is the lowest level registered on the index since the start of the COVID-19 pandemic in Q1 2020.
The report also showed that freelancer confidence in their own business operations has been dented, falling from 2.2 in the last quarter to –11.4, the lowest figure since Q1 2021.
The most common reason cited by freelancers for their lack of confidence was the state of the UK economy (77.8 per cent), with a range of economic headwinds – including the soaring cost of living, rising bills, the war in Ukraine and Brexit – impacting the UK’s self-employed workforce.
The second most common issue was government tax policy on freelancing, such as IR35, which was cited by 69.8 per cent of respondents, followed by government regulation on the hiring of freelancers, cited by 65.1 per cent.
The report did, however, show that average freelancer day rates have increased to £528, compared to £516 in Q1, with average day rates for SOC3 associate professional and technical freelancers increasing to £420 from £308.
Freelancers are also working more, with non-working time falling from an average of 3.2 weeks per quarter in Q1 2022 to 2.8 weeks in Q2. With day rates rising, this increase in working time pushed average quarterly pay to £27,486 in Q2.
IPSE also revealed that 83 per cent of freelancers expect business costs to increase over the next year, with 37 per cent saying they were incurring business debts and 15 per cent incurring credit card debt through cards issues to their self-employed businesses.
IPSE CEO Derek Cribb commented: “After an uplift in freelancer confidence last quarter, reality has unfortunately set back into the UK’s self-employed.”
“Thankfully there are signs that the government is already listening to our calls for a fairer taxation system for the self-employed. The frontrunner for Number 10, Liz Truss, has committed to announcing a review into IR35 – the flawed reform to off-payroll work. At IPSE, we welcome her announcement, and we hope that she follows through on her word, if she is successful in her bid to become Prime Minister.”
