Brexit impact on taxes for freelancers
The government has made various arrangements across all policies and industries in the event of a no-deal Brexit, and this includes taxation. Changes to the taxation regime will most impact those trading goods, as the services industry will see fewer changes. However, there will be some changes to the likes of VAT for freelancers and small businesses working in both the UK and the EU.
- UK freelancers in the UK
- UK freelancers in the EU
- EU freelancers in the UK
Brexit will have little impact on freelancers working with businesses based in the UK. It has been suggested that state aid rules will no longer apply to the UK post-Brexit. This would mean that the government would have more control over the tax reliefs and incentives it can offer to businesses.
In the event of a no-deal Brexit, UK freelancers and small businesses will no longer be able to access the EU VAT refund system. This could result in administrative delays for freelancers, as well as impact cash flow. Freelancers will still have access to the EU’s VAT number validation system, but UK VAT registrations will no longer exist there. Freelancers may be liable to pay VAT to the relevant authority in the country where you are providing the service.
The EU VAT refund system will no longer be available in the event of a no-deal scenario, with businesses required to fall back on the existing processes for non-EU businesses. This is likely to result in higher administrative burdens and/or delays in receiving refunds. businesses will still be able to access the EU’s online VAT number validation service, but UK VAT registration numbers will no longer be included in it. HMRC have said they are developing a separate service which can be used to validate UK VAT numbers.
Brexit impact on intellectual property and contracting for freelancers
Much of Intellectual Property (IP) law is harmonised across the EU, and a vast majority of the legislation in the UK in this area is a direct result of EU regulations. Thereafter, freelancers and small businesses who are IP owners should identify which of their rights are now likely to be affected and may need further application/registration in order to achieve maximum protection over that right. A no-deal Brexit will have huge implications on IP across the UK and the EU for freelancers in the ways below.
- UK freelancers in the UK
- UK freelancers in the EU
- EU freelancers in the UK
Freelancers in the UK who have been working on filing IP applications in the UK must take note, regardless of whether the company they are working with is British or EU. As outlined in the government’s published technical notices on no-deal Brexit relating to trademarks, for all registered European Union Trade Marks (EUTMs) the Intellectual Property Office will create comparable UK trademarks. These comparable UK rights will have the same filing dates as recorded against the corresponding EUTM. They will be fully independent UK trademarks which can be challenged, assigned, licensed or renewed, separately from the original EUTM. Also, in the event of a no-deal Brexit, when applying for a UK trademark or design at the UK Intellectual Property Office, freelancers and small businesses will need to provide a UK address. Currently, any address in the EEA can be provided. In addition, the UK is a member of the Madrid System, an international trademark system. This system allows users to submit one application in one language, paying one set of fees, and results in protected trademarks in 113 territories, including the EU.
UK freelancers in the EU must bear in mind that when the UK leaves the EU, in any scenario, a European trademark will continue to be valid in the remaining EU member states and UK businesses will still be able to register an EU trademark.
EU freelancers in the UK who have been working on filing IP applications in the UK must take note, regardless of whether the company they are working with is British or EU. As outlined in the government’s published technical notices on no deal Brexit relating to trademarks, for all registered European Union Trade Marks (EUTMs) the Intellectual Property Office will create comparable UK trademarks. These comparable UK rights will have the same filing dates as recorded against the corresponding EUTM. They will be fully independent UK trademarks which can be challenged, assigned, licensed or renewed, separately from the original EUTM. Also, in the event of a no-deal Brexit, when applying for a UK trademark, freelancers and small businesses will need to provide a UK address when applying for a UK trademark or design at the UK Intellectual Property Office. Currently, any address in the EEA can be provided. In addition, the UK is a member of the Madrid System, an international trademark system. This system allows users to submit one application in one language, paying one set of fees, and results in protected trademarks in 113 territories, including the EU.
Brexit impact on immigration and mobility for freelancers
Freedom of movement of both skilled and unskilled workers has proven a sticking point during Brexit negotiations, with the prime minister indicating that the UK’s departure from the EU will end this. Many freelancers depend on freedom of movement to be able to work across borders, and whilst travel for tourist purposes will still probably be relatively straightforward after Brexit, it might impact freelancers in the following ways.
- UK freelancers in the UK
- UK freelancers in the EU
- EU freelancers in the UK
Brexit is unlikely to impact UK freelancers working in the UK, unless they are working for a company which would require them to travel to the EU for work purposes. If so, a work visa might be required. Also, UK citizens must have a passport which is valid for at least six months if they are visiting the EU.
The impact on the rights of UK freelancers in the EU will vary from country to country, so it is recommended that you check with the country you work and reside in on whether any provisions have been made for UK citizens in the event of a no-deal Brexit. Some countries are recommending that UK citizens register as residents. The EU Commission recommends that the EU27 “should adopt a pragmatic approach to granting temporary residence status.”
If you are an EU, EEA or Swiss citizen, you can apply to the EU Settlement Scheme to ensure you can still live in the UK post-June 2021. You will then receive settled or pre-settled status.
Brexit impact on Employment Law for freelancers
The UK has been instrumental in driving high standards of EU regulations regarding employment law and health and safety. Moreover, a vast amount of EU employment law has been brought directly onto the UK statute books, which will still be in force post-Brexit. Freelancers in the UK and the EU will be impacted in the following ways.
- UK freelancers in the UK
- UK freelancers in the EU
- EU freelancers in the UK
The government has made it clear that it has no intention to change or reduce workers’ rights in the UK. However, UK courts and tribunals would no longer refer cases to the European Court of Justice (ECJ) or be obliged to follow new decisions from the ECJ. It is not clear how they would deal with existing UK case law stemming from EU decisions, so for freelancers working in the legal system or awaiting a court decision, this is worth bearing in mind.
Employment law in the EU27 will be unaffected by Brexit; however, UK freelancers residing in EU countries should review their immigration status.
The government has reassured that it has no plans to change workers’ rights in the UK. However, with regards to HR, there could possibly be more thorough immigration checks on freelancers. The prime minister has said that EU workers will continue to be able to live and work in the UK but has not clarified the finer details of this, for instance, what checks and requirements might be needed. EU freelancers based in the UK should bear this in mind.
Brexit impact on social security for freelancers
As a member of the EU, the UK is currently part of the EU’s contribution system on sickness, benefits, and pensions. If there is a Brexit deal, there will be no immediate change to social security contributions for UK and EU citizens. However, if there is no deal, then social security contributions could change quite dramatically and will have the following impact on freelancers.
- UK freelancers in the UK
- UK freelancers in the EU
- EU freelancers in the UK
Brexit will not impact on social security for UK freelancers in the UK.
For UK freelancers working in the EU, they may have to begin paying social security contributions to both the UK and the member state of the EU in which they reside. However, if there is a deal or the UK signs up to the EU system as a non-EU country, like Switzerland, then this will not be the case.
For EU freelancers working in the UK, they may have to begin paying social security contributions to both their country of origin in the EU and the UK, unless the UK signs up to the EU system as a non-EU country, in the same way as Switzerland.
Brexit impact on stockpiling for freelancers
With a no-deal Brexit still a possibility, the government is stockpiling food and medicines ahead of possible delays at the ports. Manufacturing companies activated no deal contingency plans at the end of 2018. Manufacturers of everything from wings and wheels to chemicals have been stockpiling raw materials, with stockpiling at its highest for a G7 country since 2007. Freelancers involved with businesses who are stockpiling will be impacted in the following ways.
- UK freelancers in the UK
- UK freelancers in the EU
- EU freelancers in the UK
For UK freelancers in the UK who might be involved with clients who are stockpiling, they should bear in mind that if they are importing raw materials from the EU, there could be possible delays at the ports in the event of no-deal Brexit, which would delay delivery of the product to the customer.
For UK freelancers in the EU who might be working with clients who are stockpiling, they should bear in mind that if they are importing raw materials from the UK, there could be possible delays in the event of no-deal Brexit, which would delay delivery of the product to the customer.
For EU freelancers in the UK who might be working with clients who are stockpiling, they should bear in mind that if they are importing raw materials from the EU, there could be possible delays at the ports in the event of no-deal Brexit, which would delay delivery of the product to the customer.
Brexit impact on client relocation for freelancers
The UK is used as the European headquarters for many companies from America, Asia and the EU itself. During a recent survey of British and German companies based in the UK, almost a third said that they would move operations from outside the UK or permanently leave in the event of no-deal Brexit. Notably, IT and finance sectors, which rely heavily on freelancers and contractors, have said that they would relocate or reduce operations in the UK. However, it’s not all bad news, as it has been estimated that almost 3,000 jobs have been created by financial services companies across the EU due to Brexit, with 500 of these jobs being located in London. Check out below how business relocation due to Brexit will affect freelancers.
- UK freelancers in the UK
- UK freelancers in the EU
- EU freelancers in the UK
Given the number of companies closing their doors and moving jobs out of the UK, check with your client to see if they intend to stay in the UK. Moreover, there might be an opportunity to expand your services if heavily impacted by Brexit.
Given the number of companies moving jobs outside the UK to the EU, there might be more opportunities potentially for work.
Given the number of companies closing their doors and moving jobs out of the UK, check with your client to see if they intend to stay in the UK. Moreover, there might be an opportunity to expand your services if heavily impacted by Brexit.
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