Contractors and consultants: how will Brexit affect me?

There is still significant confusion about what the EU referendum vote could mean for the country as a whole; let alone for contractors and consultants. The UK is entering a period of volatility as the markets react to impending changes. We take a look at at the potential positives, negatives and uncertainties that may affect contractors and consultants following the Brexit vote.

The ongoing effect of Brexit, on consultants and contractors, will largely depend on the coming exit negotiations between the UK and the remainder of the European Union. Currently the EU operates an array of legislation’s that have sweeping impacts on UK business, such as VAT, employment rights, and Agency Worker Regulations. As the UK withdraws from the EU, there will be a significant amount of legislation requiring amendments and rewrites. While these changes are likely to take years to action, Britain will almost certainly see a period of frequent legal changes affecting the business market.

Negative implications

Considerable questions remain on how Brexit will impact the free movement of people in and out of the UK and Europe. Contractors and consultants who previously had the ability to work as freely in Europe as they did within the UK may find more difficulty and complication in working, living and receiving payments abroad. The EU’s existing policy of mutual recognition of professional qualifications may also face significant changes, alongside potentially increased travel costs to and from an independent UK.

For contractors permanently based in the UK, it remains to be seen if any large businesses will chose to make significant changes, such as relocation, in the wake of the exit negotiations. Fundamentally, most fears seem to centre on Brexit-induced economic troubles provoking businesses to spend less.

‘It’s currently very unclear what percentage of companies might remove their offices from the UK and how many would give up investing here and go to an EU neighbor. This may reduce the amount of contracting jobs.’
A contractor’s comment, from a recent survey of inniAccounts clients, on the subject of Brexit.

Positive implications

However, in times of instability, as seen in the global 2008 recession, many larger businesses often turn to contractors and consultants over full time employees. The weeks following the referendum have already seen a boom in demand for legal services. Many businesses are likely to require consultancy in dealing with the coming changes and handling areas that previously fell under EU legislation.

Should the value of the pound continue to fall against the dollar and euro, this could bring it’s own opportunities. A falling currency may attract international clients whose purchasing power will increase. Exit negotiations are also likely to lead to significant changes in employment rights and Agency Workers Regulations, which may free up smaller businesses to hire more contractors.

‘By leaving the EU the UK will become more economically competitive. We will be able to scrap several EU regulations, this will lead to strong growth in the financial services sector and allow more contracting opportunities.’
A contractor’s comment, from a recent survey of inniAccounts clients, on the subject of Brexit.

Summary

The effect Brexit will have on contractors and consultants will largely depend on the results of the exit negotiations. While this leaves a large amount of uncertainty, we do know that any changes are unlikely to be immediate. Though there may be a period of instability, many new opportunities and benefits are likely to arise for contractors and consultants.