Here's how clients get away with paying freelancers later
IPSE's Fred Hicks looks at the real reasons why freelancer invoices get paid late and the change we're campaigning for.
- 2 May 2024
Over the past few months, the country has been going through a severe cost-of-living crisis. Inflation has risen to its highest levels in 40 years and regular wages, excluding bonuses, have plunged by an average of 4.1 per cent on the year in the three months to June. Similarly, our research has also revealed that the majority of freelancers (83%) now expect their input costs to increase over the next 12 months.
The government has now introduced some support for energy bills, implementing a cap of £2,500 annually on household energy bills until 2024 whilst also introducing a cap on gas and electricity costs for UK businesses, charities and public sector bodies.
In response to rising costs, IPSE recently asked members, as well as the wider self-employed community, how the crisis is impacting on their freelance businesses. With freelancers still reeling from two years of pandemic uncertainty and gaps in government in support, the survey showed that many are still in a perilous position. Nine in 10 (90%) freelancers reported that they are concerned about the impact of rising inflation on their lives, whilst others were also worried about incurring debt (27.2%) and covering mortgage repayments (23.8%) during the crisis.
The results also found that over half of freelancers (50.4%) strongly believe that their day rates won’t be able to keep up with rising inflation. However, despite this, only a small minority have increased their day rates to cover increases in everyday household costs like energy bills - with four in five (80.4%) keeping their day rates charged at the exact same amount.
Concerningly, our survey also found that the cost-of-living crisis was leading to concerns about the viability of their self-employed businesses going forward. In fact, one in four freelancers (25%) reported that they were considering leaving self-employment in the next 12 months due to the current pressures of the cost-of-living crisis.
While freelancers aren’t the only group affected by the crisis, they are uniquely vulnerable to the rise in inflation. Self-employed workers were among the hardest hit by the pandemic and their incomes and businesses have still not recovered. If the cost-of-living crisis worsens, then they could suffer years of economic turbulence - without a decent chance of recovery.
Inflation could also seriously damage those freelancers on the lower end of the pay scale – that’s why we’re also calling on the government to permanently suspend the Minimum Income Floor used to determine Universal Credit payments for self-employed claimants.Senior Research and Policy Officer
IPSE's Fred Hicks looks at the real reasons why freelancer invoices get paid late and the change we're campaigning for.
Markel Direct explain when it may be time to bring on an extra pair of hands for your growing business. They also explain the key things to consider if you do decide to hire your first employee.
If you’re an IPSE member and you arrange vehicle breakdown cover, you may not realise that your membership could drastically cut your cover costs.
IPSE's Joshua Toovey reviews the latest labour market data to explore how contractors could help alleviate the concerns of clients and outlines how the Chancellor could make this happen.
IPSE's Joshua Toovey uses the findings of the latest IR35 Spotlight report to outline why the rules are deeply damaging to both UK businesses and the wider economy.