Freelancers feeling good again after government scraps tax plan

Kathryn Gaw
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IR35 tax won't hurt freelancers (Source: Getty)

Things are looking up for the UK’s growing freelance community, with confidence rising and a controversial tax plan scrapped.

According to a new survey by the Association of Independent Professionals and the Self Employed (IPSE), 35 per cent of freelancers felt confident about their work prospects in the third quarter of 2015, compared with just 28 per cent in the previous quarter.

Freelancers were also feeling better about the UK economy in general, with confidence at 6.2, up from an all-time-low of minus 4.6 the previous quarter.

This follows the government’s decision to nix the much-maligned updates to the IR35 small business tax, which would have seen small businesses lose out on tax relief on travel and subsistence.

“It’s great to see freelancers’ confidence in their business and economy bounce back after a significant dip in the Autumn,” said IPSE chief exec Chris Bryce.

“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.”

But despite this rising confidence, skilled professionals such as IT project managers, mechanical engineers and journalists saw their average quarterly earnings fall by 10.4 per cent towards the end of 2015, and 60 per cent of freelancers said that they expect their business costs to increase in 2016.

The UK’s self-employed population is at a 40-year high, according to the Office of National Statistics (ONS). Most of these freelancers work in the construction industry or as taxi drivers, although the ONS reported that there has been a rapid rise in the number of self-employed management consultants since 2008.

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