It was another important week for those of us that enjoy trawling through thousands of excel rows to find the latest estimates on the size of the labour market (it’s certainly not for everyone!)

Self-employment has increased for the third month in a row according to the data (which is still considered a little questionable due to continuing low response rates). 

As of October 2024, there are 4.4 million self-employed individuals operating in the UK, up from 4.2 million just three months earlier. This is only the second time that self-employment has topped 4.4 million since the pandemic, so it’s certainly worthy of our attention.

Behind these headline figures lie some interesting and notable trends. Casual self-employment appears to be largely driving this increase, as well a boost to the number of working mums in self-employment.

We should note, however, that these figures are likely to include those in false self-employment. 

We’ve all seen these arrangements before; workers that have been classified as self-employed, but everyone knows they really should be employed. The employer here is simply shirking their employment responsibilities.

Concerningly, there have been reports of such practices cropping up in the retail sector over the Christmas period. My colleague, Fred Hicks, rightly called out these shameful arrangements in our Freelancing in Focus fortnightly column last week.

False self-employment does the genuinely self-employed no favours and we will continue to call these practices out for exactly what they are. Hirers should ultimately not be able to exploit our outdated and unfit employment status rules.

Our latest research on the self-employed landscape – published today – highlights an impressive increase in the number of side hustles. This is where employees take on a side business to supplement their income, a trend that continues to grow following a significant uptick during the pandemic and subsequent cost-of-living crisis.

In the last year alone, the number of side hustlers has increased by 20%, up to 460,000 and now comprising 11% of all solo self-employment.

Interestingly, 21% of all side hustles are undertaken by working mums (96,000), which is up by 8% since our findings from last year.

The attraction of side hustles comes as no surprise. We know that almost two-fifths of employees were considering working for themselves just two years ago – many of these wanting to supplement their employment income due to the challenges of the cost-of-living crisis.

It will be interesting to see how many of these newly found side hustles transition into fully-fledged self-employed businesses.

Rachel Reeves’ controversial tax-raising Budget will no doubt play a significant role in determining if self-employment experiences any growth. 

Businesses are still reeling from the announcement of a hike to Employer National Insurance, which has dampened the appetite for hiring and will likely lead to job cuts. 

Will this drive clients towards hiring freelancers instead? Time will tell, but higher employment costs will certainly make the self-employed a more attractive proposition to clients needing to fill gaps.

At some point in this Parliament, we will also see this government review employment status rules as part of their intention to introduce a ‘single status of worker’ – implemented correctly (and that’s a big if!), we could even see it become easier to determine the genuinely self-employed and perhaps even remove the need for rules like IR35 altogether.