Business Births and Deaths

The number of solo self-employed people has fallen for the second consecutive year, as the pandemic and increased taxation have deterred self-employment.

Almost a million freelancers have given up on being their own bosses, with the number of self-employed workers falling to around 4.1m from a peak of 5m before the pandemic, new figures from trade body Ipse showed.

This marks the second consecutive year that the number of solo workers has dropped since the 40 per cent growth in self-employment between 2008 and 2019.

The decline began in 2020, when 700,000 freelancers gave up self-employment after the pandemic hit their incomes and caused average earnings to fall by close to a third.

Some of the sectors where numbers dropped the most were in “artistic, literary and media occupations”, with numbers falling 14 per cent to 258,000, the figures showed. In construction and building trades numbers dropped 10 per cent to 366,000.

However, the number of “transport drivers” and those working in “agricultural and related trades” rose 6 per cent, as workers were called in to drive lorries and get food on shelves after supply chain issues struck towards the end of last year.

As of 2020, there were an estimated 6 million private sector businesses in the UK, with 4.6 million of them having no employees (76% of the total). Of that 4.6 million total, 3.3 million were what the government calls ‘sole proprietorships’, with the rest of the total made up of ‘companies’ (946,000 businesses) and ‘ordinary partnerships’ (311,000).

While most ‘sole proprietorships’ are single person operations, a small percentage do have employees – 229,000 of them in 2020 (about 6.5% of the total).

 

   2000 2020 % change
Total No. of Private Sector Businesses 3,467,000 5,981,000 +72%
Non-employers 2,356,000 4,568,000 +94%
Micro businesses (0-9 employees) 914,000 1,157,000 +27%