No-deal Brexit effect on UK’s gig economy
Britain is currently the most lucrative country in Europe for freelancers, a status that could potentially change with an impending Brexit. With Boris in Number 10, Britain is likely to be leaving the EU on October 31st, whether we have a deal or not. But how will this affect the 5 million people employed as part of the gig economy?
The freelancer is a truly mobile employee and has previously used UK’s membership of the EU to their advantage with the ability to work in highly skilled job roles across other member states such as France, Germany and Spain. This might explain why the UK is the second most lucrative country for freelancers in the world and the most lucrative in Europe. However, in the event of a no-deal Brexit there could be a huge drain of highly skilled freelancers back to the continent, leaving the UK with a major lack of freelance talent.
If a no-deal Brexit were to happen, the EU VAT refund system would no longer be available to UK freelancers in the EU or EU freelancers in the UK. This is likely to lead to administrative burdens and delays in receiving refunds for the gig economy workers. Both UK freelancers in the EU and those from Europe working in the UK may also have to start paying social security contributions to both the UK and their country of origin, which could dissuade them from staying in their foreign country.
There is no doubt that companies are hesitant about a no-deal Brexit with some American banks ready to move thousands of staff from London to elsewhere in the EU to allow them to continue to work with other European countries with ease. With many companies threatening to close their UK branches to move to mainland Europe, freelancers from EU countries may decide to move back home where they could find more work. This could have huge consequences for the economy, which is currently estimated to receive £130 billion from freelance work.
Nick Woodward, CEO of ETZ Payments, provides the following commentary:
“There are huge numbers of highly-skilled freelancers who have immigrated to the UK and offer their expertise and services to industries including technology, finance and production. A no-deal Brexit could have catastrophic consequences for these workers and could hugely reduce the number of freelancers working in the UK which may have a devastating impact on the economy.”
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