Last Updated on March 2, 2020
Uncertainty and Brexit, two words that go together like two pedals of the same Boris Johnson London bicycle. The whole scenario has caused a shakeup in the business world with companies struggling to know what to do and when to do it.
Despite this level of uncertainty, unemployment in the UK has continued to stay at record lows. But what about those of us who have not been going to interviews or finding newly listed jobs on portals like Jobrapido? What about the self-employed freelancers in the UK?
How will the UK’s real departure in December 2020 impact them, and what should they know?
What UK Freelancers Should Know
Many people with lucrative side gigs and freelancers will have concerns as the transition period begins and a twelve-month countdown begins. Businesses and freelancers both need time to adjust to any changes and now is the time to understand how Brexit will affect freelancing in the UK.
1. Let’s Talk Tax and VAT
Sole traders operating as freelancers in the UK will experience no tax changes due to Brexit. They will continue to file their return at the end of the tax year and pay tax, and two types of national insurance. If you are a freelancer as part of your own company, you will need to keep an eye on VAT rulings.
During the transition period until December 31st, 2020, these freelancers will need to continue to apply VAT to those countries within the EU. At the moment, there is a chance that freelancers operating under their own limited company will not need to collect VAT for business with EU countries after this date. Still, it is more likely that the UK will continue to charge VAT to other companies throughout the EU as part of a deal.
Freelancers working for companies should also be aware of the IR35 clampdown as of April 2020.
2. Freelancing in the EU
Working from a laptop has always been a grey area for freelancers. If you are checking emails or finishing off a project in an EU airport or while on vacation, this is likely to be classed as working in the UK still. If working as a freelancer when living in the EU, you will need residency and working rights to do this.
Any business trips to the EU will not be allowed under tourism circumstances after December 2020. If you do business with partners across the North Sea, then it may be considered working in the EU when visiting these EU businesses – and not allowed as a tourist.
3. Professional Credibility
Some freelancers may have memberships with professional bodies in the UK. These memberships are currently recognized in EU territories and allow them to work with EU businesses legally. After Brexit, some of these bodies may become unrecognized as they fall outside of EU rules and jurisdiction.
In these events, it may be that UK freelancers will have to seek new memberships with professional EU bodies to continue trading and serving consumers in the EU.
Keep these three potential changes in mind and prepare for them until the UK Government provides further information over the next year.