Freelancers’ express record confidence levels despite rising business costs

IPSE, the Association of Independent Professionals and the Self Employed, has published its latest Freelancer Confidence Index, which shows independent professionals are confident in the economy and their own businesses. However, IPSE fears this buoyant mood may not last due to measures outlined in the Budget that will impact freelancers.

IPSE found that 41% of freelancers are confident in their business performance improving in the next twelve months, versus a quarter (25%) who are not confident. This continues a positive trend witnessed in surveys from previous quarters.

While confidence remains high, freelancers also report rising business costs, with nearly half (46%) expecting their overall costs to rise in the next 12 months. IPSE fears a number of measures announced in the Budget, from increased taxes on dividends, reduction in the number of businesses that can claim travel and subsistence costs and potentially toughening up of IR35 tax regulations could all push business costs even higher.

Key findings of IPSE’s Q2 2015 Freelancer Confidence Index

– IPSE’s headline indicator of freelancers’ confidence in their business stands at +11.8, up from +8.9 in Q1 2015 and the highest on record

– Confidence in the UK economy over the next 12 months stands at +16.1, up from +12.1 last quarter

– 46% of freelancers expect business costs to increase in the next 12 months

– 80% of freelancers were under contract at the time of the survey, down from 82% in Q1 2015

Commenting on the report, Chris Bryce, chief executive, IPSE said: “It’s great to see people who work for themselves are confident in their business prospects even as they report their business costs increasing. We’re very concerned that the tough measures outlined in the Summer Budget will push costs up to the extent that many freelancers will reconsider their line of work.

“The UK needs a robust, confident self-employed community to give our labour market the flexibility it needs to compete in a global marketplace. The people who take the risks associated with self-employment need to be supported in their endeavours.”

Rich Pearson, SVP of marketing and categories, Upwork, said: “A confident freelance community is good for the economy. Experts predict that by 2025, online talent platforms could boost global GDP by $2.7tn, so it’s encouraging to see this group feeling so buoyant. While high business costs could discourage people from making the leap to work for themselves, sentiment among freelancers gives us hope that they will continue to thrive despite those challenges”