In the UK there are currently 2 million freelancers who make a valuable contribution of almost £300 billion a year to our economy. As the Brexit deadlock drags on and the cloud of uncertainty remains over UK businesses, contractors and freelancers are left scratching their heads over what life outside of Europe will mean for them.

The new departure date is set for October 31st, and a no-deal scenario is looking more and more possible. When you combine this with the fact that the deal already in play did not grant the free movement of services, freelancers are likely looking at a hard Brexit no matter what the mechanism of our exit is. But what exactly does this mean for the 2 million contractors in the UK?

Mobility

Telecommunication, IT, Oil and Gas are most likely to be affected because they tend to work internationally. For contractors who work in the UK, if you have contracts in the EU or with firms that are moving away as a result of Brexit, you’re probably going to have a trickier time. A no deal would stop the free movement of people, impacting contractors from the UK and EU. Although, even if there is a hard Brexit without freedom of movement, for short contracts it’s expected that countries won’t place barriers for temporary working visas.

30% of contractors are currently working inside the EU. WTO rules, which would be in place in a no deal, unfortunately don’t cover the trade of services which has created uncertainty for the future. For UK freelancers working in the EU, your rights will vary from country to country. We recommend you check with the country you’re in on whether any provisions have been made for UK citizens in the event of a no-deal Brexit. Some countries are now recommending that UK citizens register as residents in light of the possibility of a no-deal Brexit.

VAT

In the event of a no-deal Brexit, UK freelancers working in the EU won’t be able to access the EU VAT refund system, which will create admin delays and impact cash flow. Freelancers can still access the EU’s VAT number validation system, but UK VAT registrations will no longer exist. Freelancers may be liable to pay VAT to the relevant authority in the country they’re working in.

Skills

However, it’s not all doom and gloom; EU nations are returning home in sight of an uncertain future, and as a result, skills gaps are popping up that need to be filled. Contractors will do just that. Organisations are likely to adopt the same approach, putting off new hires until they can form a strategy to rely upon contractors instead – a similar pattern cropped up after the 2008 recession. One particular area that will increase in contract roles and freelancers is legal – businesses, especially ones with a global reach, will need extra legal advice to deal with the finite and complex changes Brexit will bring to business and trade. Brexit may also lead to a change in employment rights and Agency Workers Regulations.

Predicting what will happen with Brexit is extremely difficult; you can only try to have more than one contingency plan and be prepared for the worst-case scenario. It will undoubtedly have an adverse effect on contractors and freelancers, but as discussed – it’s not all negative!

Here at Skillbase Group, we provide Telecoms and IT contract recruitment services and contractor management solutions to corporations across Europe and Globally. Because of our substantial global reach, we are looking to maintain our presence in the European zone with our office in Galway, Republic of Ireland. So with the uncertainty of Brexit looming over contractors and freelancers, we are doing our best to ensure stability and maintain our client’s growth.