The confidence of UK freelancers has plummeted to the lowest level on record, according to research conducted by IPSE. The decline in confidence was impacted by Brexit as well as government policy, including changes to the IR35 legislation.

Meanwhile, the outlook over the next 12 months, saw 19% of freelancers’ express confidence in their businesses performance. This represents a decrease of 9% compared to the previous quarter. More than half of respondents (52%) said confidence in their business for the next 12 months has decreased.

Along with Brexit, freelancers attribute their concerns to government policy relating to taxation and regulatory constraints as the main factors behind their declining confidence in the freelance business sector. Two-thirds of freelancers also expressed grave concerns about the wider economy with 69% of respondents predicting a major slowdown in the economy.  Moreover, 92% of freelancers expect their business costs to increase over the next year with just 4% expecting them to fall.

“Freelancers’ business confidence has been in continual decline since the start of 2017, but it has now reached the lowest level on record, with freelancers expecting the biggest decline in their businesses to date. The three-month outlook for freelancers’ business performance has fallen from a positive value at the end of 2016 to -4.5 in Q1 and to a record -12.2 in Q2 of this year,” the research stated.

“Freelancers attribute their loss of confidence to the economic pressure from Brexit and the negative consequences of government policy relating to the regulation and taxation of freelance work,” Suneeta Johal, IPSE Head of Research, Education and Training, said. “This can be linked to the roll-out of changes to taxation of freelancers working in the public sector.”

“The good news is that these negative drivers are all within the control of the government and, if addressed, could and should help alleviate concerns,” Johal said. “Successful Brexit negotiations and reassuring freelancers of their tax status would go some way to increasing their waning confidence.”

The survey data also showed that freelancers were working 83% of their time, maintaining a long-term pattern of high activity. Freelancers’ day rates are up marginally over the last 12 months, but are expected to decline moderately over the next year.

“Freelancers have never been convinced that the UK economy would avoid any major negative consequences from Brexit,” Professor Andrew Burke, Dean of Trinity Business School, Dublin, and Chair of the Centre for Research on Self-Employment, said. “That view is now held more widely than ever. Freelancers accurately predicted the slowdown of the economy in 2017, therefore their rapidly dwindling confidence in the UK economy over the next 12 months is somewhat alarming.”