SMEs increased by '478 a day' in the last year

Tuesday 18 April 2017

The number of self-employed workers has seen a large increase over the last decade, with the last year alone seeing figures rise by 174,000, equating to 478 individuals a day. 

Analysis from Direct Line for business has found that the last ten years have seen self-employed workers jump from 3.8 million to 4.7 million, representing an increase of 23 per cent. In fact, self-employed individuals now account for one in seven (15 per cent) UK employees.

This jump in self-employed workers has contributed to the increase in competition when it comes to contracted work, which is both good and bad for individuals.

According to the findings, 91 per cent of businesses in the UK hire self-employed contractors for a range of different projects, showing that the demand is there. In fact, 31 per cent of companies said they frequently hire contractors for projects, which highlights that the country's self-employed sector has the chance to increase further.

While businesses are keen to hire contractors for projects, most of them require self-employed workers to have certain protection in place. Some 68 per cent of businesses need contractors to have professional indemnity (PI) cover before providing consultancy services. Almost a fifth of businesses need contractors to have PI in place that covers over £1 million, while a further third (34 per cent) need anything between £100,000 to £1 million in PI cover.consultancy services. Almost a fifth of businesses need contractors to have PI in place that covers over £1 million, while a further third (34 per cent) need anything between £100,000 to £1 million in PI cover.

On average, the PI cover required stands at £715,000, which means that not having the right cover can mean contractors lose out on potential business. 

Business manager at Direct Line for Business, Jane Guaschi, said: "An increase in the number of self-employed workers over the last few years means that competition among contractors can be a challenge. A contractor who doesn’t have the right PI insurance in place is doing themselves a disservice, as this analysis suggests it’s an important factor for businesses hiring contractors."

Ensuring that self-employed individuals have everything they need to be successful and remain competitive is an essential part of business. However, handling everything from admin, policies and financial statements can mean that contractors don't have enough time to put their full focus on landing more projects. 

Rather than splitting your time and trying to handle too much beyond your everyday business, contractor and freelancer accountants can take on some of the strain and make your operations simpler. With extensive knowledge, an accountant can help free up more of your time to allow you to focus on growing your company.


By Victoria McDonnell

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