What might a Brexit no deal mean for freelancers and contractors?

In some ways, contractors could find themselves more at the sharp end of feeling the effects of Brexit than full-time employees. If trade is impacted as much as many commentators predict, it might take time to feed through most organisations and employees could have a while to work out their plans. Contractors, on the other hand, are often the part of the workforce most immediately affected by upturns and downturns in business. So it is fair to ask what these workers should be preparing for in this period of great uncertainty.

After Theresa May’s Brexit deal resulted in her suffering the biggest ever defeat in the House of Commons, everything is up in the air. Alarmingly, nobody seems to know how Brexit will play out in the next few months.

One thing is for certain: even though her government survived the vote of no confidence in Parliament, time is rapidly running out for the Prime Minister to draw up a new exit deal, win the support of MPs for it and return to Brussels to convince the EU that it’s worth their while. Consequently, the chance of a no deal Brexit is increasing.

But what exactly is a no deal? For those confused by Brexit jargon (and don’t worry there are plenty of people who fall into this category) a no deal effectively means the UK will leave the European Union on 29th March without any exit agreement in place.

Here’s what that could mean for UK freelancers and contractors:

Further economic uncertainty

It would result in even more economic uncertainty. The UK would need to get to work quickly and strike new deals with the EU and other countries around the world. But until this is achieved, it is thought businesses would operate with caution. As a result, opportunities for freelancers and contractors could fall.

However, there are two schools of thought when it comes to uncertainty and the effect it has on the overall requirement for freelancers. In the past, economically challenging times (such as the recession) can lead businesses to engage flexible workers over permanent staff. But currently, it is impossible to predict which way this will go.

Instant departure from the EU

No deal would also see the immediate removal of the transition period that was designed to ease the UK into a new era outside the EU. At the moment, this is in place until the end of 2020 to allow for a smoother implementation of the many changes arising from Brexit. The implications of this are very pertinent for contractors already working in Europe, or hoping to in the future.

Freedom of movement stops immediately

The status of the thousands of contractors working on projects in Europe would be thrown into doubt.

Right now, these workers have the right to live and work on the continent without needing a visa. This freedom of movement is a central founding principle in the EU. In the event of a no deal, this right would be removed as the UK leaves the Single Market - the trading environment in which all European countries are able to do business with one another without restrictions or tariffs (charges and taxes).

Brexiteers argue there is another way of looking at changes to border rules, however. They say a no deal would mean the government is in a better position to restrict the presence of overseas workers, meaning there are more opportunities for UK citizens.

Restrictions on travel

Freelancers who are based in the UK but travel for work could be impacted by a no deal. The President of the European Commission, Jean-Claude Juncker, recently said that flights would be grounded immediately, with airlines needing to ask permission from all EU states to operate between the UK and Europe.

Large organisations leave the UK

As part of the Single Market, UK and European businesses have the right to trade freely with one another and enjoy tariff-free international supply chains. A no deal would make trading complicated and potentially more expensive for everyone concerned.

This could come at a significant cost to the UK economy, with global businesses perhaps opting to move their offices and operations to countries in the EU. Whether automotive, banking or the IT and technology industries, a wide range of businesses are currently considering their options with a real sense of urgency. Inevitably their decisions will affect the demand for contractors living and working in the UK.

Over the next few weeks, we will find out if a new plan for withdrawal can be agreed in talks between political leaders, and whether the government will take the threat of no deal off the table. But until we know, perhaps the best advice comes from a government campaign to keep the nation going at the time of another crisis in 1939: ‘Keep Calm and Carry On.’

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