If you are a contractor, read the article to see if you are prepared for Brexit.
The United Kingdom initially intended to leave the European Union on the 29th of March 2019, but the EU summit gave a decision in favour of the request made by the British government, because of which Brexit was delayed until 31st October. This, coupled with Boris John being elected as the new prime minister, has raised the probability that the UK will most likely exit the European Union without a deal.
A no-deal Brexit has the potential to negatively affect the trade and commerce situation in the UK. There is a high probability that many businesses currently operating in the UK will move out and continue their business activities in other European countries.
The post-referendum effects in the contracting industry have created a concern that a no-deal Brexit could have severe consequences for the contractors working in the UK and the potential to change the entire contracting scenario. Many complications are expected to arise post-Brexit, so it is advisable that if you are working as a contractor in the UK, you should seek advice from a competitive accounting firm or a contractor accountant.
What are the possible implications if there is a no-deal Brexit?
The thought that the UK might leave the European Union without a deal may finally become a reality. This could have massive implications for the trade and economic policies between the UK and the EU. Border restrictions could be reintroduced which will have the potential to affect travel and trade between the UK and the EU.ย
There is the possibility that a no-deal Brexit will do away with the transition period of 2 years, which had been agreed to be granted after the Brexit date to allow businesses to have the opportunity to adjust to the deal between the UK and the EU. This would leave the EU residents who are contracting in the UK to adjust to the changes as quickly as possible, and vice versa; hence, there is a high probability that many businesses and contractors would choose to move out of the UK early on to avoid going through the complexities of coping with the changes.
Contractors, along with many of the MPs in the UK, are already opposing the idea of leaving the European Union without a deal. If you are planning to stay and want to be prepared, look for specialised Contractor Accountants; they will help you stay abreast of the changes and be prepared.
What is the current industry situation post-referendum
The impact post-referendum on the contracting industry has been a decrease in the talent pool available for contracting jobs due to an increase in EU contractors leaving the UK, which has left many companies to increase the average contracting rate.
Many businesses have either reduced or discontinued their business operations in the UK due to the expected reduction in free movement, access to the talent available from across the EU and the array of new rules and regulations they would have to adapt to. The reason that many of the businesses are leaving or planning to leave may be to avoid new tax complications that might arise because of the changes in the tax policies expected after 31st October.ย
Giants like Aviva and Panasonic have already transferred their assets worth billions to Dublin and Amsterdam respectively.ย
How will UK contractors working in Europe be affected?
A large number of contractors who are living and paying taxes in the UK but working in other EU countries may face difficulties working after Brexit. Contractors are uncertain whether they will be able to work outside the UK once Brexit happens. The flexibility they previously enjoyed or are currently enjoying is only because Britain is part of the EU. Businesses in Europe will always prefer to hire contractors from other European countries, leaving British contractors with no other option but to leave for home.
However, if the transition period is not revoked, contractors have an opportunity to freely move within the EU and finish their pending contracts or Jobs in Europe until December 2020.
How can contractors prepare themselves for Brexit?
There is still no hard evidence to support the predictions made by financial and economic experts. However, contractors should prepare themselves for Brexit to prevent any discrepancy or inconvenience resulting from changes in the tax or economic policies post-Brexit by taking into account the following suggestions:
Increase the visibility of your profile
Contractors are advised to build a strong online presence by showcasing their skills and making it easy for employers to reach them in the UK. To stay at the top of their competitive job roles being offered, contractors should build a strong LinkedIn profile along with a highly competitive CV.
Keep cash aside for emergencies
Saving money can prove to be a strategic move in times of crisis. If contractors put aside some cash to increase their savings now, they can have a cushion that can enable them to overcome any financial hurdles that they face after Brexit. Read more about surplus cash growth tips.
Start attending business conferences and seminars for networking
Contractors should be working on building their network, and to do this effectively, they should be attending different business conferences and seminars to make new contacts. By building a strong network of connections, contractors can stay employable in the market even after Brexit.
Make your skills pay you
Contractors are advised not to solely rely on their existing contracts. If you have a specific skill which you think can earn you money, then you should already be utilizing it to earn an additional source of income that can be used for increasing your savings other than general consumption.
Get to know your clients
If you plan to take on new contracts or if you already have a contract, then assess how your potential or current clients will be affected after Brexit. Are you working on a trading (import and export) contract? Check whether your clients will move to any other EU country in case Britain exits the EU without a deal?ย
You should also assess whether no-deal Brexit benefits your clients or not. If yes, then will this bring more work opportunities for you?
UK Governmentโs Brexit Business Support Fund: A Detailed Account
Clear House Accountants are specialist Contractor Accountants in London who have years of experience working with contractors from a variety of industries and backgrounds. We help contractors remain compliant while saving tax and extracting maximum funds in the most effective way.
