How Will Brexit Affect Freelancers?
Brexit has dominated headlines and column inches for around two years now but with little certainty on how a final deal will look, it is difficult to know how leaving the EU will affect UK freelancers.
Some freelancers are worried. The latest freelancer confidence index from self-employment trade body IPSE shows that Brexit is the second biggest concern for self-employed workers.
Brexit may however deliver some new opportunities for freelancers as well.
In this blog post, we look at the most likely outcomes of Brexit and how it could affect freelancers.
The Brexit options
At present, the two most likely options are:
Theresa May’s deal
Leaving the EU on March 29 with a 21-month transition period that will decide the future relationship between the UK and EU.
No deal Brexit
Cutting all ties with the EU with no agreement in place. This is the default position, so if MPs don’t approve a deal or delay or stop Brexit, this will happen on March 29.
Other outcomes including a second referendum and a Brexit deal that involves a customs union are possible, but for the moment these appear unlikely.
Short term benefits for freelancers
Uncertainty is a major feature of the country’s current Brexit position. This has had a dramatic effect on British businesses.
Many have been reluctant to make long-term hiring decisions until the full impact of Brexit has become clear.
In this climate, many firms have preferred to hire freelancers and other short term self-employed workers to fill labour gaps in their companies.
This short-term spike in clients may only be short-lived, however, if more clarity on the country’s Brexit position emerges in the next few months.
In the longer term, fewer EU freelancers in the UK and labour shortages owing to lower EU immigration could help reduce competition for UK-based freelancers, but the effects of this are far from clear.
Freedom to work in Europe
Self-employment trade body IPSE claims that 27% of its members took up contracts in EU countries last year.
As well as affecting UK citizen’s rights to live and work in the EU, Brexit could also restrict the ability of freelancers to work remotely for companies in Europe.
IPSE claims that ‘ensuring UK businesses have access to the Single Market for services’ is the number one priority for their members in the Brexit negotiations.
But in its current form, Theresa May’s Brexit deal only includes a commitment to a ‘common rule book’ for goods and not services.
This benefits manufacturers and exporters who will enjoy fewer barriers to trade, but it will make life more difficult for freelancers that export their services to the EU.
Stalling investment and consumer spending
Brexit uncertainty has also had an effect on the UK economy. Many businesses are delaying or reconsidering investment decisions in the UK.
New figures reveals a contraction. Key industries and many businesses have already relocated operations or even headquarters to other European cities.
This week, the Dutch government said it had already attracted 1,900 jobs from Britain in the Brexit period.
While short-term uncertainty might benefit freelancers, a shrinking economy and an exodus of big companies will likely reduce the number of opportunities available to freelancers here in the UK.
Brexit uncertainty is also affecting consumers. Overall, consumer confidence in the UK economy has fallen over 30% in the lead up to Brexit and consumer spending remains tentative.
This is likely to affect freelancers in consumer facing industries and has the potential to send broader shockwaves through the UK economy.
On the bright side for many freelancers, the services market enjoyed solid growth in the final few months of 2018.
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