Research recently released by the FCSA (Freelancer & Contractor Services Association) paints an uncertain future for contractors in the UK. The double whammy of Brexit and off-payroll reforms are leaving many uncertain about their work future.
The research, carried out by the FCSA in partnership with cloud accounting software provider, FreeAgent, surveyed 500 self-employed freelancers and contractors. 61% of those surveyed under-30 believe that Brexit will result in fewer opportunities for their business, with 58% of those aged between 31 and 40 in agreement. 12% of all those surveyed are considering closing down their business as a result.
The dark cloud of Brexit is accompanied by off-payroll reforms which are set to transform the private sector. IR35 tax legislation is an attempt by the government to clamp down on tax avoidance in situations where a contractor should more properly be classed as an employee. However, a poor reception in the public sector and failure by the government to make changes following consultation has left many contractors pessimistic. They predict that the sweeping changes will leave them out of pocket or out of business.
FCSA and FreeAgent research found that 13% of limited company workers are planning to quit freelancing and contracting in the UK when reforms come into force in April 2020. FreeAgent CEO and co-founder, Ed Molyneux outlined the frustrations of the self-employed community:
“Time and again policymakers continue to ignore the fact that the self-employed have none of the employment rights or the security that comes with permanent employment. They seem to be intent on crippling what is a very important and growing part of the UK economy, at a time when the wider economic impact of Brexit will potentially leave many of these businesses at risk.”
It’s a turbulent time for businesses in Britain and the contractors they depend upon. Both clients and contractors must now arm themselves with as much knowledge as possible, and – where necessary – seek expert support, as we attempt to navigate an uncertain future.