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Self-employed: Pay

House of Lords written question – answered on 3rd November 2014.

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Photo of Lord Sharkey Lord Sharkey Liberal Democrat

To ask Her Majesty’s Government what were (1) the average annual gross earnings, and (2) the average gross hourly rate of pay, in the United Kingdom, both in nominal terms and adjusted for inflation, of those who were self-employed for each year or part-year since 1997 for which data available.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lords Spokesperson (Cabinet Office), Lord in Waiting (HM Household) (Whip)

The information requested falls within the responsibility of the UK Statistics Authority. I have asked the Authority to reply.

Letter from Joe Grice, Chief Economic Advisor, Office for National Statistics to Lord Sharkey dated October 2014.

In the absence of the Director General for the Office for National Statistics, I have been asked to reply to your recent Parliamentary Question asking Her Majesty’s Government what were (1) the average annual gross earnings, and (2) the average gross hourly rate of pay, in the United Kingdom, both in nominal terms and adjusted for inflation, of those who were self-employed for each year or part-year since 1997 for which data available. (HL2352)

The earnings of self-employed people are difficult to define and estimate due to the various different ways in which self-employed people get paid and how they manage their accounts.

The main source of approximations for the earnings of the self-employed is the Family Resources Survey (FRS), a survey of households administered by the Department for Work and Pensions. This survey provides estimates of self-employed individuals’ income based on the information they would normally provide for their income tax self-assessment returns to HMRC.

The table provides the available estimates. They are based on the average weekly income over the year. The median is preferred over the mean as it is a better indicator of changes over time. This is because the mean income is often distorted by unusually large values.

Income from self-employment
Financial year Nominal terms At constant 2012/13 prices1
1997/98 169 232
1998/99 190 257
1999/00 196 262
2000/01 200 266
2001/02 220 288
2002/03 223 288
2003/04 230 294
2004/05 230 289
2005/06 207 255
2006/07 250 300
2007/08 230 270
2008/09 233 264
2009/10 216 239
2010/11 210 225
2011/12 230 236
2012/13 207 207

Source: Family Resources Survey, Dept for Work and Pensions

1

Adjusted using the Consumer Prices Index Median weekly income (£)

The estimates include the effect of individuals who made a loss over the year in their business and so reported a negative income for the year. The estimates are derived from a representative sample of UK households but, as for any sample survey, are subject to a degree of sampling error and, therefore, should be treated with caution.

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