A study carried out by mortgage lender Kensington Mortgages has suggested that a significant number of the UK’s self-employed workers are ‘unfazed’ by Brexit.
Kensington Mortgages surveyed more than 1,000 self-employed individuals, and found that 63% believe that Brexit will have ‘no impact’ on their business.
However, in terms of Brexit’s impact on the UK economy, 52% of the self-employed individuals polled believe that the economy will be adversely affected.
Meanwhile, 47% of those surveyed expect 2018 to ‘bring in more work’ than 2017, and 42% are confident that they will make more money this year than last year.
The study also revealed that 35% of self-employed workers believe that Brexit will make it harder to obtain a loan, with sole traders and freelancers expected to be amongst those worst affected.
‘Self-employed workers are, without a doubt, the backbone of the UK economy, so we should all take reassurance from their optimistic outlook and ability to build up their savings to cope with life’s unexpected events,’ said Craig McKinlay, Sales and Marketing Director at Kensington Mortgages.
‘The fact that such a diverse group of workers would have diverging views on Brexit is unsurprising. What is perhaps more important is how we respond to these concerns. Regardless of regional location, business size or age, the self-employed have unique day-to-day circumstances that unite them.’
A survey carried out by AXA Business Insurance has revealed that a significant number of self-employed individuals believe that working for themselves has ‘improved their quality of life’.
82% of those polled believe that being their own boss has enhanced their quality of life, whilst only 7% believe that working for themselves has negatively impacted on their quality of life.
The survey also suggested that, in regard to mental health in the workplace, just 40% of self-employed individuals experience work-related stress, compared to 60% of those in regular employment.
However, when it comes to starting up in business, the survey revealed that many UK entrepreneurs struggle with their self-confidence: 50% stated that they lack confidence, while 22% reported that mental health issues hold them back from pursuing their business goals.
Commenting on the findings, Gareth Howell, Managing Director of AXA Insurance, said: ‘Some people are attracted to self-employment as a route out of a damaging workplace situation. Whatever your motivation, timing is crucial to success or failure in self-employment.’
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HMRC has recently launched a Making Tax Digital (MTD) pilot for income tax for self-employed taxpayers. This is currently open to sole traders with income from only one business, whose current accounting period ends after 5 April 2018.
To take part in the pilot, sole traders will need to send income and expenses summaries to HMRC every three months using MTD-compliant software. A final report to confirm all income and expenses for the year and to claim any allowances or relief the business may be entitled to will also be required.
Currently, only two software providers are included on the list of those that support the MTD for income tax pilot. This can be found on HMRC’s website – https://www.gov.uk/guidance/software-for-sending-income-tax-updates, and will be updated as more become available.
MTD for income tax is not set to take effect until 2020: the government has confirmed that keeping digital records and making quarterly updates will not be compulsory for taxes other than VAT before April 2020.
Meanwhile, the MTD for VAT pilot starts next month, before being mandated from April 2019.
Research carried out by banking group Aldermore has suggested that a significant number of UK workers are planning to become self-employed in the future.
Aldermore found that 29% of individuals aim to become self-employed – a notable rise when compared to 2017’s figure of 15%.
15% of workers plan to launch a business in the retail sector, whilst an additional 11% plan to move into the catering and accommodation industry.
18% intend to make the move in the coming year, the research suggested.
Aldermore found that economic uncertainties ‘don’t seem to be a concern’ to entrepreneurs, with 53% stating that Brexit negotiations will have ‘little impact’ on their business.
However, the research also revealed that 70% of workers believe it is harder for the self-employed to secure a mortgage.
Commenting on the findings, Charles McDowell, Commercial Director for Mortgages at Aldermore, said: ‘The research demonstrates that the UK is a truly entrepreneurial nation, with nine million people considering making the ambitious move to become self-employed.
‘It takes a lot of courage to make the major life decision to become self-employed, and it is encouraging to see almost three in ten expect their revenues to increase in the next 12 months, which is a positive outcome in light of the myriad of uncertainties.’
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Research carried out by banking group Aldermore has suggested that a lack of business savings is putting a strain on self-employed individuals in the UK.
Aldermore’s data suggested that poor business resilience is putting sole traders and freelancers ‘at risk of financial hardship’.
It found that 22% of individuals have no business savings at all, whilst 40% revealed that their business has less than £1,000 in cash savings.
An additional 54% of self-employed individuals stated that they have been unable to earn money due to ‘unforeseen events’, with many citing ill health as being an issue.
Aldermore’s research also revealed that 8% of firms with a turnover above £50,000 hold nothing in cash.
Ewan Edwards, Head of Savings at Aldermore, commented: ‘Starting a new business is a significant life decision. While many self-employed people relish greater flexibility and control, the first few years can often bring long hours, additional stress and relatively small financial rewards.
‘We want to work with the government to look at means of backing Britain’s entrepreneurs and helping them devise new policies and financial products that will encourage start-ups and protect growing small businesses from the shocks and uncertainties of self-employment.’
Minimum wage legislation should be extended to cover self-employed workers who do not control their own rate of pay, according to a think tank.
The Resolution Foundation claims that of the 4.8 million people defined as self-employed, around half earn below the low pay earnings threshold of £310 a week.
The group argues that the government needs to do more to protect certain groups of self-employed workers, such as those operating in the so-called ‘gig economy’, as they do not have the opportunity to set their own wages.
If enacted, the change could also bring greater protection to those operating in more traditional sectors such as hairdressers and minicab drivers.
It proposes that companies who set the rate of pay for independent contractors would be required to calculate whether a person working at an ‘average’ pace would be able to earn at least the minimum wage after expenses.
The body has submitted its recommendations to Matthew Taylor, who is leading a government review into modern UK work practices.
Conor D’Arcy, a policy analyst at the Resolution Foundation, said: ‘By extending minimum wage protections to those self-employed people whose prices are set by a firm … self-employed people in the gig economy would be given protection against extreme low pay for the first time ever.’
However, Seamus Nevin, head of employment and skills policy at the Institute of Directors, warned that an ‘obligatory minimum wage would undermine the business model of many gig platforms … who would find it hard to justify paying people at times when there was no demand’.
The Federation of Small Businesses (FSB) has urged the new government to rule out a national insurance rise for the self-employed.
The business group has suggested that self-employed ‘strivers’ were concerned during the General Election that a ‘tax grab’ could be sprung on them in the form of higher national insurance contributions (NICs).
To help support the UK’s strivers, the FSB has called for the government to bring the Maternity Allowance closer in line with Statutory Maternity Pay, and explore the ‘feasibility of Statutory Paternity Pay’ for all eligible self-employed parents.
Commenting on the issue, Mike Cherry, National Chairman of the FSB, said: ‘The self-employed community is an increasingly critical driver of economic growth in the UK. As the self-employed battle spiralling inflation and a new wave of political uncertainty, the last thing they need is for the government to revisit failed plans for a national insurance hike.’
Following the announcement of an increase in NICs for the self-employed at the 2017 Spring Budget, the FSB launched a ‘stop the 2%’ campaign.
It has also previously compiled a list of problems facing the self-employed. Some of these issues include a lack of sick and holiday pay, late payment from large businesses and a high tax administration cost.