2024 predictions: 6 trends for freelancers and contractors

Is AI going to steal your job? Will you be forced to lower your day rate? It’s an interesting time for freelancers and contractors and that’s set to continue into 2024.

Interested to know what could be coming up for your business next year? Keep reading to see six predictions about the state of freelance work.

1. An increased reliance on AI?

The robots may not be coming to steal our jobs, but that doesn’t mean AI isn’t making big waves among freelancers and contractors. Writers, designers, marketing professionals, and more are all having to deal with the increased capabilities of AI.

Whether it’s losing clients who now use AI for the work they outsourced to you or learning how to utilise AI to help complete your own work more efficiently, it’s time for freelancers to learn how to best use AI to their advantage. This is certainly a trend to watch.

Learn more about how to use AI in our AI marketing guide.

2. No more late payments?

One of the biggest threats to freelancers and contractors everywhere comes from clients paying late – but the government is set to make changes that could help.

Our 2023 SME Insights Report revealed that late payments from customers are a problem for 65 per cent of customers.

But as part of the Cash Flow and Prompt Payment Review, the government hopes to increase transparency surrounding payments and take a more active approach when enforcing payment.

The 2023 Autumn Statement also included an update to the Procurement Act, which will make sure 30-day payment terms are extended to all subcontractor invoices for public sector contracts.

With this renewed focus on late payments, could further updates follow to better support the self-employed?

3. Increased day rates for freelancers?

You may think that the continuing cost of living crisis may mean clients are less likely to agree to increased rates, but that might not be true. With energy prices, grocery costs, and more all increasing in price, now might be the perfect time to increase your rates.

When surveyed as part of our 2023 SME Insights Report, 62 per cent said they’re planning on increasing their prices in 2023 – rising from just 49 per cent the previous year.

Data from The Association of Independent Professionals and the Self-Employed (IPSE) supports this, with freelancers believing their day rates are set to increase by an average of 8.6 per cent over the next year.

It can be difficult to raise prices – especially with long term clients – but here are five ways you can tell your customers about a price increase. Afterall, your work has value and it’s important to show that.

While the inflation rate is decreasing, it’s still significantly higher than it was pre-2021 – so perhaps it’s time your prices reflect that.

4. A shift in attitude towards flexible working?

Recent years have seen more and more people turn to the gig economy – taking on more frequent short term projects in order to live freely. The benefits of this are clear: a better work-life balance and more control of working conditions, picking and choosing the projects that they want to work on.

However, those in the gig economy have to balance these positives with less job security and limited (or zero) employee benefits.

Nonetheless, these things don’t seem to be deterring people from considering joining the gig economy. One major benefit seems to be the freedom to travel and become a digital nomad. Google Trends data supports this, showing how the number of people searching this term has risen in the UK since 2021.

It’s clear that ever since the pandemic put the concept of remote work into the mainstream, more and more people are drawn to combining travel and work.

5. No more double taxation within IR35?

Since off-payroll working rules were introduced in 2017, double taxation has plagued the tax bills for contractors and freelancers. Previously, many freelancers have been incorrectly placed outside IR35 – meaning any tax already paid by a contractor isn’t offset by HMRC, causing ‘double taxation’.

However, from 6 April 2024, off-payroll working rules are set to change. HMRC will now use “assumptions and best judgement” to estimate the value of any taxes you’ve already paid – including tax return data.

The changes include deductions to:

• income tax and employee NICs
• Class 2 and Class 4 NICs
• dividend payment tax
• corporation tax

6. Striving for sustainability?

As the government made a commitment to achieve net zero by 2050, it seems small businesses are following suit. Our SME Insights Report revealed that 97 per cent of small business owners have sustainability goals in place – with 38 per cent considering it a high priority.

But while many want to make the change, finances remain a barrier. That’s why it’s important for us all to remember that change starts small – and can truly make a big difference.

While many are taking a more sustainable approach for personal reasons, others are doing it to make sure they can work with bigger businesses – as more and more pressure is placed on larger corporations to demonstrate their sustainability efforts and carbon footprint.

Do you have an ESG (environmental, social, governance) strategy in place in your business? Maybe it’s time.

What else should freelancers and contractors look out for in 2024?

• the end of Class 2 National Insurance – set to save the average self-employed person £192 a year
• the reduction of Class 4 National Insurance contributions from 9 to 8 per cent – set to save the average self-employed person £350 a year
• Companies House reforms – which includes identity verification and compulsory digital filing
• basis period reforms – which requires businesses to report the profit or loss that arises within a tax year (regardless of its accounting date)
• HMRC clampdowns – affecting many freelancers who work across popular digital platforms

Do you have any other predictions that may affect freelancers and contractors in 2024? Let us know what you’ve heard in the comments below.

Helpful guides for freelancers

• What does being inside IR35 mean? A guide for the self-employed
• How to do a self-employed tax return
• What are the best freelance websites?
• What type of business insurance do I need?

Photo: Malik/peopleimages.com/stock.adobe.com