The number of self-employed workers in the Netherlands took a sharp dive in December as the government pledged to crack down on so-called “phantom freelancers” from January 1.

More than 21,000 sole traders deregistered with the Dutch chamber of commerce (KvK) in the last month of 2024 while 14,500 new businesses signed up, leading to a net fall of 6,776.

The number of new starts was 13% lower than a year ago while 50% more freelancers cancelled their registration, according to the KvK’s latest figures.

The total number of sole traders still rose by 3.1% in 2024, but the pace of increase has slowed from 8% over the past two years.

The tax office is stepping up checks on self-employed workers to root out employees who have been hired on a freelance basis so that employers can avoid their obligations to pay income tax, social insurance premiums and sick pay.

The crackdown will focus on companies rather than workers and firms that are found to be breaching the rules will receive a warning before the tax office starts issuing fines.

But some sectors, such as education and healthcare, have warned that they will struggle to fill vacancies if they lose the ability to recruit workers on a flexible basis. Some self-employed workers are unwilling to accept staff contracts because of their personal or professional circumstances.

According to national statistics agency CBS, some 13% of the working primarily earn most or all of their income as a freelancer.