Self-employed alert: Freelancers working ‘more for less’ as IR35 & SEISS problems persist | Personal Finance | Finance


SEISS eligibility has proven to be controversial for Rishi Sunak, with many organisations reporting that around three million self-employed workers are excluded from support. On top of this, new research from the Association of Independent Professionals and the Self-Employed (IPSE) has shown trading self-employed workers are still being hit hard by the current reality.

IPSE revealed freelancers are lowering their day rates while working more.

The research, from IPSE’s quarterly Confidence Index, showed that in the last quarter of 2020, freelancers worked almost one extra week than the previous quarter, but at the same time cut their day rates by an average of £16.

It was found that the shartpest cuts in rates were among associate professional and technical freelancers such as designers and technicians, who dropped their average day rate from £254 to £232, and also managerial freelancers, who dropped their average rate from £555 to £526.

Across the self-employed landscape, the average number of weeks without work dropped from five to 4.3.

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“It is a worry that this could translate to a longer-term downward trend in freelancer day rates.

“Concerning, too, is that unlike the rest of the sector, managerial freelancers did not see an increase in work even before this lockdown. While others cut their day rates to get as much work as possible while the going was good, for managerial freelancers, the going never got good.

“On top of this, managerial freelancers – along with professional freelancers – are one of the groups that will be most affected by the changes to IR35 due in April. It is indicative of the damage these changes will do that, for the first time since the beginning of the pandemic, managerial and professional freelancers said that Government tax policy – not coronavirus – is having the most significant negative impact on their businesses.

“Altogether, these worrying trends are a sign that now more than ever, freelancers need better government support and protection – not the threat of tax rises and damaging structural tax changes.”

Xenios Thrasyvoulou, the founder and CEO of PeoplePerHour, also reflected on the results: “Whilst it’s concerning that many freelancers had to cut their rates during the last quarter of 2020, it’s perhaps unsurprising given that the second lockdown came into effect halfway through the quarter.

“Although freelancers are facing increased competition for their services, according to the reports’ findings they seem to have kept their confidence in the economy, which is at its highest level since 2017.

“This is likely due to the increase in demand for remote online freelance services by medium to large businesses, which is unlikely to wane in the coming months.

“There is however a legitimate concern by many self-employed consultants and freelancers regarding the government’s lack of clarity and protection with the fast approaching IR35 regulations.”

The self-employed community have been among the hardest hit by coronavirus and ever since SEISS problems emerged, groups like IPSE have called on the Chancellor to extend support and fix the apparent eligibility issues.

Rishi Sunak has so far resisted these calls and has defended the Government’s actions on the matter.

When pushed on the Government’s apparent failure to help excluded workers in Parliament in early January, the Chancellor had the following response: “With regard to our support for the self employed it’s worth noting, not that you would know it from what the honourable lady said, that almost three million people have benefited from support to the tune of around £20billion.

“I do believe that’s comprehensive, it’s indeed certainly more comprehensive and generous support than almost any other country that I can find has provided.

“But of course we will always look at other suggestions we will receive, and I will continue to do that.”

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