Could freelancers and contractors, which include Umbrella and Limited Company contractors, outgrow traditional employees over the next 6 years? The latest survey results from major online freelancing website Elance seems to think so.
In a recent study from a sample of graduates, the website pinpointed that as many as 8 in 10 of those surveyed predicted self-employment to be the new norm in the run up to 2020. Of these, 9 in 10 also highlighted that they felt being self-employed would be more rewarding than being a permanent employee.
It is of little surprise that many have been attracted to contracting with pay rates perceived to be much higher than that of a permanent employee. A recent investigation by the Professional Representation Network found that as many as 20,000 contractors working in London were earning around £120,000 per year.
For many, the appeal of flexibility, electing your own hours and even the comfort of working from home has led countless graduates down the contract employment route.
So what sectors look set to soar?
Elance highlighted web programming and HTML related jobs to have increased by 9% over the first quarter of 2014, with writing contracts increasing by 15%, database programming by 8%, and accountancy related jobs by 23%.
Heightened efforts from HM Revenue and Custom's to clamp down on tax compliance may, for some individuals, be enough to put them off self-employment. The past year has seen HMRC's investigations into contractors increase with more than 250 IR35 cases alone. However, with attractive pay rates and the UK's growing demand for an agile skilled workforce, the future of freelancing looks set to continue its rise.
Our advice to aspiring contractors is to ensure that when you do choose this route, you do so with the backing of a reputable accountancy service provider, such as PayStream. Such a provider will ensure that you are working compliantly, which will give you peace of mind, should the tax man ever come knocking.