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Contractors & Freelancers

How Contractors and Freelancers Should Prepare For a No-Deal Brexit

By January 16, 2019February 16th, 2021No Comments

Have you been avoiding Brexit news? Tired of the confusing headlines and constantly changing dynamics in parliament? As Brexit continues to dominate the news, it can be difficult to keep up. But with just over 70 days left, a no-deal Brexit is still the default position for the UK if MPs can’t agree on an alternative.

It’s something we all need to be ready for. If you’re a contractor or freelancer, you likely won’t have the support network that business employees do either, so we’re here to offer you some advice and help you prepare for a no-deal Brexit.


What does a No-Deal Brexit really mean?

The no-deal scenario means that when we leave the EU in March 2019, we leave with no trade deal between the UK and Europe. It also sees the loss of the ‘implementation period’, a period of 2 years from March 2019 in which businesses could otherwise have slowly adjusted to the new deal between UK and EU. If there’s a no-deal, this means a hard exit, and the door is closed straight away, meaning businesses have to react quickly.

MPs have just voted against Theresa May’s Chequers deal, with one of the most contentious issues being the Northern Irish ‘backstop’. This means that the likelihood of a no-deal Brexit is higher than ever.

A no-deal Brexit would represent a significant challenge for import/export businesses, especially those that rely on relationships with businesses in Europe. It is more likely to create economic turbulence than almost any other deal that has been considered. That’s why we have to prepare.


How will a No-Deal Brexit affect contractors?

This is a question which can be broken down into many parts.

brexit for contractors

Firstly, a no-deal Brexit doesn’t guarantee the right for EU nationals to live and work in the UK and vice versa. On the whole, a no-deal Brexit has the power to force one of the largest imposed migrations in Europe’s history. The UK could well lose a lot of employees, 7% of our workforce are from Europe after all.

The population shift could work for or against contractors; while it may free-up contracting roles in the cities currently taken up by EU nationals, we do also have to remember that UK contractors currently working in Europe may return, tipping the scales on competition. Similarly, if you’re a UK contractor working in an EU country at the moment or vice versa, you also have the added concern that you may be forced to leave your current contract and residence or apply for residency.

Secondly, we have to consider what a no-deal Brexit means to the economy on the whole – in a word, ‘uncertainty’. And this uncertainty may lead larger companies to behave differently.

For example, some companies may halt permanent hiring and opt to hire short term contractors to give them a little more flexibility during the first few uncertain months or years. Others may choose to not renew with contractors during the first few months or years in an effort to save money while waiting to see exactly how the economy comes out of the no-deal Brexit.

In general, though, change can lead to good conditions for contractors. Remember Y2K? Companies needed to prepare for the prospect of temporary difficulty. And a no-deal Brexit is likely to kick up more dust than Y2K ever did.


Thirdly, we need to consider the migration of risk-averse companies. Many have already announced their plans to move HQs from the UK to Europe, jobs along with them. While it’s true other companies see an opportunity to move in and set up in the UK, the scales are weighted towards companies leaving the UK in the event of a no-deal Brexit. So if a significant number of companies choose to relocate and free movement for workers is not established, this could see the UK losing a significant number of contract jobs.


How will a No-Deal Brexit affect freelancers?

The UK Government looks set to keep the cap for residential visas to those who earn at least £30,000pa. This means that many mid-level jobs filled by EU workers may become more difficult to recruit for, and opportunities for flexible workers will increase as a result.

In general, many freelancers are supplying services for mid-range salary jobs. And with the residential status of EU nationals in being so uncertain at this time, it’s possible that there will be a mid-range salary skill gap on which freelancers could capitalise if EU nationals leave the UK. Businesses may wish to increase work placed with freelancers rather than hire full time workers in a period of economic turbulence.

However freelancers are also highly dependent upon the success of the companies they work for. So taking stock of your clients and how no-deal buoyant they are is a good idea. And if you’re a freelancer working for any EU-based clients, the bad news is that you may not be able to be paid by your EU client until the banks have sorted things out on their end.

If you’re a UK freelancer working in the EU, without a suitable agreement in place, you may be out of a home and a job – so start looking into your options as quickly as possible.


What should I do now to prepare?

The Government has released papers on how we can prepare for a no-deal Brexit, so reading through the papers relevant to you is a good start.

For contractors and other micro businesses the biggest risk is scarcity of work. This may not be the case come March 2019, but we’re encouraging you to plan for the worst case scenario. These tips will still be beneficial if the outcome is more favourable than the no-deal, so you have nothing to lose.

Here’s what you can do now to prepare:

  • Spruce up your CV. Having a highly competitive CV is going to help you no-end, if competition for jobs ison the rise, you need to make sure you’re top of the pile.
  • Add a few qualifications. It’s a good idea to get a couple of extra qualifications on that CV too, especially is there are some short courses you’ve been meaning to do. Do them now, they’re tax deductible and could mean the difference between you winning a contract or having to settle for a lesser contract.
  • Acquire a new skill. Particularly for freelancers, offer more. If you’re a one-trick-pony your competition might not be. Offer a broader range of services so that clients know you can cover off a variety of work, even if you’re still specialising in one skill.
  • Analyse your clients. To fully understand your Brexit no-deal situation, you must understand your clients’. Do they rely on import-export? Are they likely to up-sticks and move the company to an EU city? Are they likely to benefit from no-deal and therefore potentially have more work for you? Does their income rely on doing business with EU companies? Here’s an interesting ‘Brexit checklist’ for businesses that may trigger some questions for you.
  • Choose contracts and clients wisely. With the above point in mind, if you’re in the position where you’re looking for a new contract or a new client, assess their no-deal scenario plans too.
  • Make the most of Tax Planning. Shockingly, many self employed people in the UK do not pay attention to Tax Planning as a business or as an individual, and therefore probably aren’t making the most of their earnings. Setting up a tax planning session with your accountant is a great way to see if you can shock-proof your business and personal finances ahead of Brexit.

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