At Contract Eye, we’ve been asked this question so many times over the past 15 years.
Unsurprisingly, there is not single authoritative source to help answer this question. However, there are enough sources to come up with a good estimate.
How many IT Contractors are there in the UK?
From our experience of the contracting industry since 1998, we estimate that the total number of IT contractors is likely to be around the 100,000 mark in 2023.
Here are some news sources over the past decade which we have used to come up with this figure.
2014 – 120,549
We received a helpful email from the PCG team who confirmed to us that there are were a total of 120,549 IT/telecoms working in the UK contractors in 2013.
This figure represented about 14% of all those working in IT/telecoms overall. The PCG has since been rebranded as IPSE.
2016 – 119,617
The UK’s leading contractor accountant at the time – SJD Accountancy – published this figure, using data obtained from the Office of National Statistics.
2018 – 121,989
Another accountancy firm – Access Financial – made an ONS submission which revealed that the number of IT Contractors remained around the 120,000 mark.
The report suggests that the number of contractors rose by around 8% a year from 2009 onwards. The overall number had dropped slightly due to the implementation of the Off Payroll rules in the public sector from April 2018 onwards.
2021/2 – a decline due to the Off Payroll rules?
The implementation of the Off Payroll (IR35) rules in the private sector from April 2021 had a large impact on the IT contracting market. Many limited company contractors were forced to use umbrella companies, and a number left contracting altogether.
According to an IPSE report, ‘one third’ of contractors left ‘self employment’ following this implementation.
It’s hard to say if this figure is accurate, however it is doubtless true that there are fewer IT contractors working today (2023) than there were in 2021.
Given the lack of concrete data, and the ambiguity over how the term ‘contractor’ is used, we estimate that the true number of IT contractors in currently around the 100,000 mark (2023).
Why it is difficult to obtain IT contractor population data
The sources used above are useful – but they are not based on solid government data, or deep research.
There are a number of reasons why it is virtually impossible to know how many IT contractors there are.
We look at some of these reasons below:
Freelancer vs Contractor vs Self Employed
The past few years have seen a massive rise in the number of freelancers working across all industry sectors.
This is due to a number of factors, including a move awaw from traditional (safe) forms of employment.
A 2014 study commissioned by the Professional Contractors Group, revealed that there were 1.4 million freelancers in the UK – representing a 14% growth over the past 10 years.
The COVID (work from home) effect cannot be understated. Multiple sources now put the number of freelance workers at over 2 million.
A ‘contractor’ is a different beast. A professional contractor works for a client for a specific period of time – as detailed in a contract for services. Contractors work either via a limited or umbrella company.
The terms contractor, freelancer and ‘self employed’ are used interchangeably – meaning it’s difficult to identify which individuals are truly ‘contractors’.
Different types of business structure
Contractors work via limited or umbrella companies.
There is no Companies House SIC code for ‘IT contractor’, or any way to identify how many IT contractors work via a limited company.
Similarly, there is no data on how many IT contractors use umbrella companies.
