The results are in. Qdos have released their annual contracting survey results for 2021, and key insights from self-employed sole traders include:
- Nearly half of survey respondents (45%) said that the pandemic had a negative impact on their business, with the majority (78%) losing up to 50% of their earnings;
- They were divided in terms of when they expected earnings to recover, with 22% confident they already had but an alarming 19% not confident they ever will;
- Only one in three (34%) reported receiving money from the Self Employed Income Support Scheme (SEISS).
Despite their recent poor experiences, the majority of sole traders have no intention of stopping working this way (90%) until retirement (58%). This is very positive given that the UK’s economy is so reliant on micro businesses, the majority of which are sole traders.
Limited company contractors
In contrast to sole traders, limited company contractors seem to have fared better last year with 35% saying their income in 2021 remained consistent with 2020, 38% earned less, but a notable 27% saw their earnings rise.
Last year saw an 80% increase in the proportion of time contractors spent operating via an umbrella company when compared with Qdos’ 2020 survey results. Furthermore, almost all (94%) of those who have been engaged as umbrella employees were told by their agency or client that it was a requirement due to IR35 reform. This is not surprising because umbrellas employ contractors, and the employment relationship therefore renders IR35 and off-payroll considerations irrelevant.
Despite IR35 reforms being identified as the biggest threat to their business by 61% of respondents, a large number (45%) of limited company contractors feel optimistic about their future prospects.
You can read the full Qdos survey analysis here.