Freelancers across the UK are feeling the pressure of government tax policies, with a new survey revealing that four out of five believe these policies are negatively impacting their businesses
The latest Freelancer Confidence Index from IPSE (the Association of Independent Professionals and the Self-Employed) paints a concerning picture, with 54% of freelancers reporting less confidence in their businesses’ prospects over the coming year compared to the past 12 months.
A staggering 79% of respondents cited government tax policy as having a detrimental effect on their business, surpassing economic concerns as the top factor affecting their performance.
Key Findings from the Survey:
- 54% of freelancers are less confident about their business prospects for the next 12 months compared to the previous year
- 79% believe government tax policy is having a negative impact on their business
- 48% are less confident in the UK’s economic outlook for the coming year compared to the past 12 months
Tax Policies Hit Harder Than Economic Woes
While economic uncertainty continues to weigh on freelancers’ minds, it’s the tax system that’s causing the most significant headaches. Complex tax rules, such as IR35, are seen as a major obstacle to growth for many freelancers, who are essentially the UK’s smallest businesses.
A Call for a Fairer Tax System
With the upcoming Budget in October, IPSE is urging the new Chancellor, Rachel Reeves, to consider the needs of freelancers and create a fairer and simpler tax system. As Andy Chamberlain, IPSE’s Director of Policy, puts it, “For millions of freelancers… the biggest barrier to growth has always been the tax system.”
A Challenging Time for Freelancers
This survey highlights the challenges faced by freelancers in the current economic and political climate. While the government seeks to raise revenue, it’s crucial that they don’t overlook the vital contribution freelancers make to the UK economy.
“This is about more than just rates of tax. Convoluted tax rules like IR35 are crushing freelancers and the businesses they’ve worked so hard to build,” said Chamberlain.
He continued, “Rachel Reeves faces her first big test as Chancellor with a Budget in October and has made no secret of the need to raise money. But freelancers will be hoping that the Chancellor is also open to building a fairer, simpler tax system for millions of sole proprietors going it alone.”
Looking Ahead
The Freelancer Confidence Index serves as a crucial barometer of the self-employed sector’s sentiment. As freelancers navigate the complexities of the tax system and economic uncertainty, their voices deserve to be heard. It remains to be seen whether the upcoming Budget will offer any relief or further exacerbate their concerns. However, The Freelance Informer is happy to make your concerns heard through our content, social media channels and network.
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