Guest Blog by Anthony Sherick, MD of ContractorUK
As we enter what could be the final stretch of the Brexit negotiations, we are still left with little assurance of what it will mean for contractors in the UK. Many currently have strong ties to European-based companies and may well be affected by the UK’s orderly or otherwise exit from the EU. So, how could Brexit affect contractors?
Contracting provides the opportunity to work on myriad of projects all over the world, which enables contractors to gain invaluable exposure and increase their skills in emerging technologies, especially in IT. However, a significant number of UK contractors travel to Europe to work on projects for European-based companies. Should a deal not be reached, and borders harden, there is the potential that UK contractors will find it hard to continue working, or find new work, on such projects. This restriction of free movement to the EU for work could cause major problems for contractors.
Many projects that are based in an EU country involve working in a number of countries within the block as well. Should UK contractors only be allowed to enter certain countries and not others, it could decrease their opportunities due to the extra headaches this would cause for HR teams. As such, doubt around Brexit could negatively impacting contractors’ income and contribute to widening the IT knowledge gap in the UK unless adequate alternatives are found.
This situation could also see the reverse happening, with European contractors unable to come to the UK to work. UK businesses employ a large amount of EU nationals either as permanent employees or contractors. The increase in regulations for foreign workers that could come with a no deal, oreven Theresa May’s deal, will affect UK businesses’ ability to employ EU contractors and access their much-needed skills; which could see a further drain on the UK’s specialised workforce knowledge.
The opportunity to take on contracts abroad exposes contractors to different methods of working, as well as different technology infrastructures and systems that they may not experience in the UK. Without being in the EU, UK contractors may not experience these new ways of working and so be unable tobring this expertise back to the UK and help the transmission of ideas and methods to directly upskill IT projects here. Given the amount of technical skills and knowledge they bring back from multiple client environments, it’s important that a working deal is found.
In terms of contractor taxation, it would be the hope of many contractors that the regulations will remain as they currently are. The UK has a double taxation treaty with European countries which will need to be agreed as the same once Britain is out of the EU for this to be the case. However, if this was to end, then we could see a number of contractors choose to not workeither in the UK or the EU. This would limit their income and opportunities aswell as the potential for them to learn new skills and techniques on different projects.
Additionally, a positive deal will help encourage inward investment into the UK from within the EU and outside of the EU. This inward investment helps to deliver strong employment levels in the UK and healthy opportunities for contractors. Again, anything other than a positive deal is likely to have detrimental effects on the levels of investment into new projects and start ups in the UK, affecting contractor opportunities.
The UK’s withdrawal from the EU will undoubtedly affect contractors but without clear detail on what a deal or no deal will look like, it is difficult to fully ascertain what the effects will be. Contractors will certainly see a squeeze on the number of opportunities they have; which goes for both UK and EU contractors. What’s for certain is that contractors will be keeping close tabs on the Brexit negotiations in the coming weeks.