Sole traders – who account for 59% of the UK business population1 – have been worst affected out of all businesses by COVID restrictions, a survey by iwoca has found.  The majority (58%) of sole traders (defined as those who are the exclusive owners of their businesses) are trading less than pre-COVID, compared to 43% of (limited) companies.

What’s more, sole traders are twice as likely not to be trading at all, with 14% in this position compared to 7% of limited companies. 

COVID- secure workplace measures disproportionately impacted sole traders 

As the UK has reopened, small businesses report that having to be ‘COVID-secure’ took its toll; but it seems sole traders suffered the biggest hit. Almost a third (32%) said they were making fewer sales due to COVID-secure workplace measures (compared to 24% of limited companies), and – where 29% of limited companies had fewer customers – nearly 4 in 10 sole traders suffered the same (39%). 

The research also revealed that nearly half of business owners with sole trader status (46%) were concerned they’d struggle to afford their own wages in the next 6 months (compared to 37% of those without). 

Nearly 1 in 4 sole traders will take zero days off in the next year 

As SMEs continue to wrestle against the pandemic, time off seems to have become a luxury they can’t afford. And again: it’s sole traders who’re worst affected, with 24% not even planning to take one day off in the next 12 months (compared to 13% of limited companies). The majority – 59% – plan to take less than ten days off in the next year (compared to 50% of limited companies). 

Seema Desai, Chief Operating Officer of iwoca added: “The pandemic has hit sole traders particularly hard. We need our sole traders back on their feet - hopefully the lifting of restrictions will help them to recover, which will be great for them and also for the economy more broadly.”