A record two in three British employees plan to start their own business at some point in the future, a jump of more than 10 per cent compared to a year ago, according to new data shared with City A.M. this morning.
In fact, one in ten Brits don’t want to wait and plan to break out on their own this year with a further fifth planning to do so in the next few years, cloud accounting software firm FreeAgent found.
Younger generations are the most entrepreneurial with 80 per cent of respondents aged between 18-34 revealing they have always dreamt of starting their own business at some point in their lives.
However, older age groups also show significant entrepreneurial intentions with over half (60 per cent) of respondents between 35-54 years old and a third (33 per cent) of over 55’s saying they also harboured plans to start their own business.
When asked in 2021 what motivated them to start a business, working Brits said that the ability to choose what work they do (41 per cent) and the ability to earn more as their own boss (36 per cent) were the top two reasons.
However, in this year’s survey, the top reason was creating ‘a better work life balance’ (cited by half of respondents – 47 per cent), while earning more was only the 7th most popular reason (27 per cent).
Other motivations are wanting to be their own boss (44 per cent); choosing what work to do (40 per cent); following their passion (34 per cent); and gaining a greater sense of achievement (30 per cent).
30 per cent of respondents said that they would like to fit work around their family commitments and this was significantly higher for female respondents (35 per cent compared to 24 per cent of male respondents) and people aged 54 and under.
The impact of Covid and Brexit
Unsurprisingly, the impact of COVID-19 has meant that half of respondents have had to push back their timelines for starting their own business.
However, the pandemic has also had a positive impact on budding entrepreneurs as the impact of Covid-19 has led to a quarter (27 per cent) of respondents moving their business plans forward and a further quarter (24 per cent) said that Covid-19 hasn’t actually impacted their plans at all.
“The emergence of new businesses will be fundamental to the UK’s economic recovery following the impact of the pandemic and Brexit – so it’s fantastic to see an increase this year in would-be entrepreneurs.”Roan Lavery, CEO and co-founder of FreeAgent.
There were mixed responses on the impact of Brexit. 40 per cent of respondents agree that Brexit puts them off starting their own business, while 27 per cent disagree with this statement and 34 per cent said they neither agree or disagree.
Next generations of entrepreneurs
Despite the intention to break out on their own in the future, 9 in 10 (90 per cent) of those with plans to start their own business in the future do have concerns: the main ones being: the financial burden of setting up (51 per cent) or dealing with tax, such as National Insurance, VAT and MTD).
Other concerns were complying with business regulations such as GDPR and IR35 (32 per cent); managing business finances (29 per cent); and a lack of government support for freelancers and small businesses (27 per cent).
Ongoing confusion around Making Tax Digital (MTD), the government’s ongoing plan to digitse tax for UK businesses. Research from FreeAgent last year found that only 14 per cent are confident about their understanding of the new legislation.
This confusion is set to continue into 2022 with 82 per cent of respondents stating they are unaware of the upcoming 2024 deadline for MTD for Income Tax Self Assessment (ITSA), which will require self-employed people, sole traders and/or landlords that have income over £10,000, to use digital software to manage their finances and file their tax returns.
Awareness is most prominent in the youngest age group (18-34-year-olds) of whom 23 per cent were aware, compared to 17 per cent of 35-54-year-olds and 14 per cent of people aged 55+.