Freelancers, what to expect when you are expecting Brexit: How Brexit will affect UK freelancers

Chloe Frederick
Chloe Frederick

“Will Brexit f**k up my freelancing?”

We've heard this far too much from our British users & UK freelancers as the risk and unpredictability of Brexit remain. If you are not familiar with the situation, Freelancers make a worthy contribution to the economy in the UK - about £300 billion a year. the Association of Independent Professionals and the Self Employed estimates there are 5 million self-employed people in the U.K, with around 2 million of those being freelancers or digital nomads.

While Brexit debates and the news focus on the impact on big business, it’s clear that the UK’s separation from the EU will hit UK freelancers, and it's potentially a big hit to take. This is one of the largest freelance economies in the world, but how will it be hit by the Brexit process?

Brexit breeds serious questions for freelancers - will it affect the services freelancers provide, VAT invoices, work or travel visas, what about intellectual property?

Let's quickly wrap the answers up for you

Effects on Freelance Hirings

Reasonably, one of the key anxieties about Brexit is how it will influence the hiring resources within various industries.

Will the demand for freelancers plummet as corporations squeeze their budget among the turmoil?

Will they turn even further towards freelancers as an alternative option to the responsibility of hiring employees?

In reality, at this stage, no one can definitively say how it will result after the U.K. leave but we can have look at some of the fundamental predictions.

It won't be a different thing to predict that many of the EU-based firms will try to minimize the paperwork and red-tape about invoices issued from the UK, by working with EU-based freelancers. Although it sounds something as inevitable as the Brexit itself, Rimuut offers a remedy in that sense, by letting UK freelancers create their virtual companies and issue EU-based invoices.

Many UK-based freelancers already opened up their virtual companies via Rimuut in the past 2 months. As we were expecting this to happen, but not in a scale that saw a huge exponential increase from registrations coming in from the UK.

End of Free Movement:

Many freelancers work with businesses based in the European Union and there is genuine anxiety that these businesses would look for freelancers within the EU27 for administrative ease. For freelancers based in the U.K. working with EU customers, the cease to free movement will have a more severe consequence on those who are living a digital nomad life. Freelancers and digital nomads have a "free" reign when it comes to their careers. This offers the benefits of taking work in multiple countries for the right pay. For operators inside the European Union, this couldn’t be a simpler process. There are no visas required and few regulatory hurdles to defeat to work for a business based in the European Union. The changes that Brexit will make is a major problem for freelancers who are working across different countries in Europe.

Brexit Effect on Taxation

Another venue that has raised issues in the Brexit process is how it will affect VAT rates between the U.K. and Europe. If the U.K. leaves the European Union with a deal in hand, then it is safe to assume that the current rates of VAT and the way they are charged will stay as-is to how they are right now. As with almost any subject regarding Brexit, the concern increases if the U.K. were to leave with no-deal.

The government could then greatly change its VAT laws. Still, the U.K. government has been reassuring that in the case of a "no-deal" Brexit, they would not look to raise VAT charges on goods and services. They have also hinted that the rules around "place of supply" would also broadly stay the same.

No-deal Brexit: What Does It Mean For The Freelancers?

How likely is a no-deal Brexit? As far as the U.K. government is involved, they’ve made it clear that achieving a deal with the European Union is their top priority. But, this is not a guarantee, so although unlikely, it is still essential to contemplate the implications of a no-deal Brexit. It’s worth keeping in mind that a no-deal Brexit remains the default choice until a deal has been agreed upon.

In the event of this, the predictability of the effect on freelancers is much more difficult. Some of the effects of a no-deal Brexit would be:

The transition period for Britain to leave the European Union would disappear and it will suffer a “cliff-edge” state. Almost everyone is agreed that this would be a far more explosive possibility

Freelancers and entrepreneurs may lose sizable EU clients as the risk around trade laws and potential shifts will happen.

Relocating would be far more difficult for U.K. freelancers and digital nomads due to unpredictability around how a new visa policy will form.

When In Doubt, Create a Virtual Company with Rimuut!

You can cut the air with a knife around the talks of Brexit, it's that dense: And the horrific thing is, no one can predict what will happen. But this much is clear; the no-deal scenario is the worst option for the freelance and digital nomad community as it will affect versatility and confidence in the U.K. economy. So, even if it seems that the post-Brexit era will be less kind for digital nomads and freelancers, this will gradually become normalized, as the dust settles. Until then, you are better off having your own virtual company; and you can read more about why you need it in our blog.


Chloe Frederick

Blogger at Rimuut