How many IT contractors are there in the UK currently?

At IT Contracting, we’ve been asked this question so many times over the past 15 years. Unsurprisingly, there is no single authoritative source to help answer this question.

However, there are enough sources to produce a good estimate.

How many IT Contractors are there in the UK?

Based on our experience in the contracting industry since 1998, we estimate that the total number of IT contractors is likely to be around 100,000 in 2023.

Here are some news sources from the past decade that we have used to arrive at this figure.

2014 – 120,549

We received a helpful email from the PCG team, who confirmed to us that there were a total of 120,549 IT/telecoms contractors working in the UK in 2013.

This figure accounted for about 14% of all those working in IT/telecoms. 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 for 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 significant 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.

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It’s hard to say whether this figure is accurate; it is doubtless true that there are fewer IT contractors working today (2023) than in 2021.

Given the lack of concrete data and the ambiguity in how the term ‘contractor’ is used, we estimate that the true number of IT contractors is currently around 100,000 (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 in-depth research.

There are several reasons 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 away 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-19 (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 an umbrella company.

The terms ‘contractor’, ‘freelancer’, and ‘self-employed’ are used interchangeably, making it difficult to identify which individuals are truly ‘contractors’.

Different types of business structures

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.