Umbrella company contractors and freelancers will be pleased to learn that latest ONS data shows a fall in inflation.
According to the report, inflation has continued its downward trend, falling from 2.5% to 2.4%, although it is still ahead of the Bank of England’s target rate of 2%.
The Association of Independent Professionals and the Self-Employed (IPSE) has said that this will come as welcome news for the UK’s 4.8 million self-employed workers, with day rates rising for the first time in nearly a year.
Tom Purvis, IPSE’s Political and Economic Advisor, commented on the findings, “The drop in inflation will be welcomed across the self-employed population because it means day rates are increasing in real terms.
“This is supported by the Confidence Index, released yesterday, which shows that average day rates have risen for the first time since Quarter Three of 2017.
“There may be some cause for concern for the self-employed, however, because of the upward pressure the hotel and restaurant industry is placing on inflation. Rising prices in this sector will disproportionately affect the self-employed because they typically spend more time working away from home and don’t have an employer to pay for it.
“Overall, however, today’s figures are welcome news for the self-employed. The Government must not reverse this by extending the reforms to IR35 into the private sector or lowering the VAT registration threshold.
“Both of these measures would not only directly harm the self-employed; they also risk contributing to higher inflation because the price of goods and services would inevitably rise. The self-employed are one of the economy’s – and the Government’s – greatest assets; with the uncertainty of Brexit looming, it should strive to support, not scupper them.”
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