A national survey has revealed freelancers’ confidence in both their business performance and the UK economy increased to encouraging levels in the final quarter of 2015, following a record low in the previous quarter.
This change in outlook follows a decision from the Government not to pursue proposed changes to how freelancers who operate though limited companies are taxed.
The survey conducted by IPSE, the Association of Independent Professionals and the Self Employed, in association with freelance talent marketplace Upwork, reveals freelancers’ outlook for the UK economy returned to positive levels (+6.2) at the end of 2015. More than a third (35%) of freelancers also indicated increased confidence in their business outlook for 2016. This is compared to record figures in the previous quarter, which revealed freelancers felt negatively about the outlook for the UK economy (-4.6), and only a quarter (28%) of freelancers felt confident their business performance would improve.
The top factors freelancers cited as having a positive impact on freelance businesses included building their brand and reputation (58.7%) and innovating their services offered (40.9%). These are also the factors freelancers expect will have a positive impact on their business performance over the course of 2016. Over a third (35.7%) of freelancers surveyed also said business performance improved in the last three months due to more organisations adopting flexible working practices.
However, not all freelancers are positive about the next 12 months. The confidence of those working in skilled professional occupations, such as IT project managers, mechanical engineers and journalists improved, but remained negative overall. This group has had a particularly hard year with average quarterly earnings falling by 10.4 per cent.
The attitude of the Government towards freelancing remains the major factor expected to negatively impact business performance levels in the coming year, the same as in the previous survey. 60 per cent of freelancers also expect increased business costs in 2016.
Chris Bryce, IPSE CEO, said: “It’s great to see freelancers’ confidence in their business and economy bounce back after a significant dip in the Autumn. These professionals play a vital role in bringing innovation and specialist expertise to British businesses and they need to be supported. The fact that confidence returned to positive territory after the Government decided to shelve its plans to change the IR35 small business tax, shows just how big an impact government intervention can have on how people feel about running their business.”