17th December 2020
Apart from having to put up with the coronavirus pandemic most of the year we now have Brexit to prepare for. But can we though? At this moment we have little information until a deal is struck between the EU and the UK. Talks are being held as we write this and we will come back with an update once a final agreement has been reached,
In this article, we will go through a few areas we think contractors may be affected in going into next year.
VAT
We will likely leave the EU VAT area and so be prepared for the rules to change, bringing with it an administrative burden. It is important, therefore that you have the support of a reliable accountant.
Without a deal, contractors will not have access to the EU refund system, so they’ll likely have to pay VAT in each EU country they trade in.
The system of selling digital services or goods will likely change from the practical Mini One-Stop-Shop to dealing with VAT per each country individually.
Accreditations
The hiring of UK contractors by foreign companies have been easy so far; however, after leaving the EU acquiring separate accreditations may be required.
Unfortunately, this will mean that hiring contractors from the UK for EU companies will be more challenging, and if the process is overly complicated or costly, they may go elsewhere.
Intellectual Property Rights
With Brexit, and again this depends on the deal, a separate trademark application may be required in the EU and the UK.
Leaving the EU without a deal may mean losing protection in EU states next year, so it is worth following what happens by the end of the month in this area.
Employment Law
We might see the changing of the laws around operating as a freelancer or a limited company in the EU.
Contractors that are EU citizens will likely see rules change, but at the moment, no details have been released on what might happen.
Freedom of Movement
If you travel to the EU for work, the rules may be changing for you soon. At the moment, we enjoy the freedom of not having to worry about visas and paperwork, but that will change.
Prepare for more admin around applying for work permits and VISAs if an agreement is not reached.
Data protection
If you or your company works with personal data received from the EU, make sure that Standard Contractual Clauses (SCCs) are in place between you and your EU counterpart.
What can you do now to prepare?
As you can see from the above, we are entirely in the dark as it is impossible to predict what will happen after the transition period ends.
Keep up to date with Government guidance. Communication is generally very good, so make sure you sign up to receive updates in an e-mail or bookmark this page and check it daily for updates.
If you trade with clients in the EU, make sure you register for EORI (Economic Operator and Registration Identification Number), so you can continue to move goods between the EU and the UK.
Look for work in the UK. Have a look at your portfolio, CV and market your business in the UK. There is still demand for a flexible workforce, and IR35 is being handled much more sensibly now that last year.
Train and diversify. What better time to expand your knowledge and make you(r business) more attractive with additional skills. Perhaps you can specialise in an area of your expertise to gain that competitive advantage.
We hope you found this article informative and useful. Although we are unable to provide any facts right now, at least hopefully, we managed to highlight some of the challenges contractors may face next year.
We will keep reporting on Brexit and issues affecting contractors, so it’s worth following us on our social media channels (LinkedIn, Facebook, Twitter).
If you are looking for an FCSA accredited contractor accountant, give us a ring on 0800 917 9100 or send us an e-mail on info@myaccountant.co.uk and find out how we can help you.