The Institute for Fiscal Studies (IFS) has published its latest report, which looks at the differences between employees and sole traders in terms of earnings and job satisfaction – and the results are revealing.

When it comes to earnings, the picture is not particularly positive for sole traders, with the IFS report finding that their average income is roughly one third less than that of people who are in full-time employment. The report looked at the financial situation for those who had been self-employed for three years, after previously being unemployed, and found that they had incomes of around £500 a month less than full-time employees.

A significant number of them were technically classified during the 2018/19 financial year as below the poverty threshold. Contacting an affordable accountant for sole traders in South Yorkshire, or whichever region they are based in, could help them manage their finances.

However, despite lower incomes, the report by the IFS also found that sole traders expressed greater feelings of happiness and job satisfaction than employees, with its co-author Xiaowei Xu telling Small Business that:

“We should try to understand the desirable qualities in solo self-employment – freedom, autonomy and authority, for example – and look for ways to foster them in traditional employment relationships.”

Figures from the Office for National Statistics (ONS) indicate that the number of people running their own firms is at its highest level in 40 years and that one out of nine of them is a sole trader running a micro-business.