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What does Brexit mean for contractors?


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It would seem that, despite time rapidly running out to have some kind of arrangement in place, Brexit is still worryingly unfinalized (chaos is, in fact, the word being used most frequently to describe the current governmental state).

Every day there’s a new vote on how to tackle the Big B. Yesterday’s set of votes put forward all current options on the table: No Deal, No Brexit, Common Market 2.0, The European Economic Area (EEA), Second Referendum, and Confirmatory Referendum On May’s Deal. Every single one was rejected by Parliament, leaving us no closer to forming a viable plan.

We’re due to leave on 12th April whether we have a deal or not, but what does that mean for UK contractors?

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Contracting post-Brexit

The fact is that, even at this late date, nothing is certain - including how contractors will be affected by the plethora of avenues the Brexit deal-or-no-deal game could go down.

What we do know is that the implications could be far-reaching, whichever way the relationship with the EU swings. For example, contractors may struggle to win and keep European jobs post-Brexit.

Nearly 45,000 contractors that live and pay taxes in the UK work mostly in the EU on long-term contracts, while thousands more rely on short-term jobs or commute back and forth. The likelihood that these contractors will enjoy the same flexibility of work between the UK and the EU isn’t high; after all, they’re only eligible to work in Europe because Britain is a part of the EU.

If a deal is achieved, a transition period is specified in the withdrawal agreement that allows businesses and individuals to make arrangements until 31st December 2020. Contractors will still reap the benefits of free movement during this time to complete long-term jobs and get future UK-based work lined up.

However, this won’t stand if we exit sans-deal. It would most likely impact tariffs on trade severely and would throw the rights of British workers in the EU (and EU workers in Britain) into uncertainty. With no trade agreements in place, the UK would probably have to rely on the World Trade Organisation rules until new trade deals are forged – another area that is somewhat murky.

Europe-based contractors may have to return to Britain permanently if this is the case.

In the event of a no-deal Brexit, it’s also very likely that major international companies consider moving their operations elsewhere. Aero-giant Airbus is just one example that has already threatened to relocate from the UK should the government not reach a ‘suitable deal.’

Recruitment post-Brexit

Once again, it’s unclear whether the UK will remain in the single market and how either eventuality will reflect in trade and service prices.

However, within the UK itself, the self-employed added £271 billion into the economy in 2017. This is a great indication of how in-demand contractors and freelancers are; that abundance of work isn’t likely to diminish for contractors within the UK, at least in the near future.

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Employers will probably not want to invest in permanent hires with so much market uncertainty, leading to the use of contractors instead. New projects, system updates and business consultancy will still go on, presenting a wealth of opportunities for the self-employed.

Conversely, this doesn’t spell mass-dismissal for contractors as soon as the post-Brexit dust settles – rather, it could change the landscape of the UK job market as we know it. There have been hundreds of articles written already on how contract work is on the rise, Brexit could just present a catalyst for the inevitable.

There has already been a noticeable widening of the skills gap as experienced, educated EU citizens leave the UK for more stable ground. Opportunities are broadening in almost every industry, including IT, healthcare, media and sciences – a void that UK contractors could claim for their own should they want to step up to the task.

Should I be worried about my future in contracting?

The ambiguity surrounding Brexit makes it very difficult for anyone to predict the future of UK contracting - in fact, it makes it difficult to comment on the future of the UK in any aspect. We can only speculate, advise contractors to take opportunities as they're presented and follow events as they happen.

Brexit is a complex beast and convincing arguments go both ways. Despite the controversy, opacity and even hostility swirling around the ongoing debates, it boils down to a frustrating case of wait-and-see. All considered as it currently stands, UK-based contractors will probably be okay for the foreseeable.

For now, at least, the job market seems strong and stable (no pun intended) as we leap into the unknown.

Read the full Withdrawal Agreement document here.

Read the proposed relationship framework between the EU and the UK here.

For Professional Indemnity and IR35 insurance or a contract review, or to read more articles on contractor and freelancer issues, visit Larsen Howie.


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