With workers’ rights dropped from the Brexit Bill in December and recent news of many EU citizens still not having settled status, the question of contractors’ rights following Brexit is an interesting one.
Earlier this month, Parliament partially tackled the answer in response to a query posed about employment rights. Parliamentary Under-Secretary for Business, Kelly Tolhurst, assured employees that:
“The Government is committed to protecting workers’ rights and enhancing these where it is right for the UK. The Political Declaration sets out the UK’s ambition on employment provisions in our future trade agreement with the EU.
“In order to prevent either Party gaining an unfair trade advantage, the UK will seek a reciprocal agreement to maintain social and employment standards at the current high levels. This will both help maintain fair and open competition in trade and protect workers’ rights in the UK.”
What rights could be affected?
But what about contractors? It’s hoped that any EU-derived laws surrounding contractor and business rights will mimic, or exceed, the current levels so to protect our flexible workforce. However, there are a number of areas where contractor rights could be significantly affected, including:
Freedom of movement
It’s almost certain that contractors will find it somewhat harder to perform work in mainland Europe following Brexit, affecting an estimated 45,000 people. At best, this could involve additional paperwork and visa fees; at worst, it could completely restrict you from performing contacts outside of the UK.
Legality of contracts
Brexit could also have serious implications for existing contracts running beyond 31 December 2020. Depending on the wording of the contract, Brexit could activate any force majeure clause, presenting clients with grounds for terminating or renegotiating the contract.
Social security and taxes
UK social security payments will lose their European status, meaning that contractors may have to pay dual contributions to their country of origin and country of work. Other taxes that could be affected directly or indirectly by Brexit include corporation tax, income tax and VAT.
Guarantee of work
In previous years the UK has been used as the European headquarters for many companies across the world. While this hasn’t guaranteed contractors work, it has certainly contributed the amount available. Following Brexit, it is expected that many companies will move their operations outside of the UK, which would limit the demand for flexible workers.
What should contractors do now?
As it stands, the Brexit transition period will run until 31 December 2020, extending current rights until the end of the year. It’s highly recommended that you use this time to:
- Speak to any EU clients about your provision of services following 31 December 2020;
- Complete or renegotiate any long-term EU contracts; and
- Start building a pipeline of work in the UK.
If you’re like to know more about protecting yourself, whatever the outcome of Brexit, now is the perfect time to seek advice. Get in touch with the team at Mango Pay to find out how we can help.