With Theresa May recently announcing her resignation, Brexit outlook is as uncertain as ever. Many are left wondering, what will Brexit mean for me as a freelancer?
The Freelance Economy
Freelancers make a substantial contribution of almost £300 billion a year to the British economy. IPSE (the Association of Independent Professionals and the Self Employed) estimates that there are 5 million self-employed people in the U.K, around 2 million of which are freelancers. As the uncertainty of Brexit continues, many are left wondering how the freelance economy will be affected by the Brexit process.
In all sectors, a key concern is how Brexit may affect the budget available for recruitment. Will the demand for work drop as companies have to rein in their spending? Could it be that freelancers and the self-employed will actually become a more attractive option than hiring permanent employees in some instances?
Over the past 15 years, the freelance economy has gone from strength to strength, as employers have become less reluctant to shoulder the commitment of permanent staff. It seems likely that Brexit will only increase this trend, especially in the wake of all the employees that will be either leaving the UK to stay within the European Union’s borders or back to their home countries.
There is a substantial and legitimate concern that Employers in the EU will narrow their hiring policies to those who are within the EU themselves, for administrative simplicity. Those inside the European Union require no visas required and there are minimal administrative barriers to work. IPSE has stated that;
“Single market access and the free movement of skilled professionals across the European Union should be prioritized by the government in negotiations.”
While it would certainly be a positive step for U.K. freelancers if free movement was retained, it remains unlikely that this will happen. If and when Britain does leave the EU it seems likely that the British freelance economy, and perhaps Britain’s status as a world leader in the creative industries could be impacted. Some hurdles may be easy to overcome – the ability to have remote meetings can offset the 25% rise in travel costs, for instance.
No-deal or Softer Brexit
As far as the U.K. government is concerned, they’ve made it clear that delivering a deal with the European Union is their top priority. Parliament rejected all eight alternative options put to a vote, and the recent European election has left an unclear view on what exactly the public actually want. Holding a second referendum and a customs union with the EU received the most support. It seems unlikely that no-deal will be realised but it is worth remembering that in the absence of a deal, no-deal remains the default option under Article 50, and the current Brexit deadline is October 31st. If no alternative option is agreed upon to make the case for a longer extension with the EU, the UK may leave the EU with no deal by default.
The consequences of No-deal for freelancers could be:
- The transition period for Britain to leave the European Union would disappear, leaving a far more dramatic and difficult to navigate situation.
- Uncertainty around trade laws and potential changes, would mean that EU clients could easily be lost.
- Lack of an established visa system would make relocating and travel to work far more difficult.
- Customs charges will increase, leading to high costs for stock
Options for a “softer Brexit”, particularly a customs union and the so-called Common Market 2.0, may win the support of MPs who have previously abstained from voting. This would see the UK join the European Economic Area (EEA) and European Free Trade Association while being part of a customs union with the EU, making it much easier for business to continue, hopefully without as much disruption.
The Brexit waters are still very muddy. It is clear to most that a no-deal scenario will be the worst option for the freelance community, as it will affect flexibility and confidence in the U.K. economy as a whole. There is the possibility that freelancers will be utilised to fill the gap for employers who are not prepared to commit to employing a permanent workforce – a sad, silver lining for freelancers perhaps.