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How freelancers can prepare for Brexit today

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And what the self-employed need to know about leaving the EU.

That’s right, I used the dreaded ‘B’ word. As you can imagine, Brexit will have a certain impact on freelancers in the UK, and to an extent, to those working from Europe too. With the long-awaited end of this agony not too far ahead, businesses will have to implement new measures starting from January 1st, and freelancers will of course be included in that group.

What freelancers need to do before Brexit

As if 2020 hadn’t been hard on freelancers already, Brexit will come in soon to make things a bit more challenging. Such a major step for the UK will bring a number of consequences on self-employed creative professionals and their businesses, from income to Intellectual Property Rights and beyond.

A few things will change for freelancers after Brexit. Let’s take a look at the key takeouts.

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Image credit: Mr. President

How will Brexit affect my income?

As many things on this list, knowing the exact impact of Brexit on freelance income is complicated. It is still difficult to exactly gauge at this stage, but there are certainly a few things to consider.

The fact it is so difficult to know now is precisely the reason why you should preparefor a big impact. You should prepare for a reduction in the number of clients and businesses willing to purchase your services, and even accepting payments may become troublesome. So far, being in the EU has granted the UK the possibility to move capital quite freely across the member states. This will no longer be possible once Brexit comes into play next year. 

Preparation is key

I am personally no accountant though, and trusting my words on the best practices for you would probably not be the wisest idea. I can recommend relying on some professional accountants who can best advise you on the next steps for your business.

You should also be ready to diversify your revenue streams and pivot your business if necessary. With so many businesses planning to move out of the UK (I’ll get to that in a bit), it would be safe to consider new ways to provide income for your business. Perhaps expand on a new area or sector, or use your transferable skills to provide new services.

Whatever your choice, make sure to be prepared for when Brexit hits.

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Image credit: Daniella Di Lisio

Can I still work with international clients?

Nothing technically prevents you from keeping to work with international clients, but there will be some more obstacles to developing those partnerships in the first place.

So far, international clients have had UK-based freelancers understanding the EU Single Market, translating into low admin costs and a somewhat free economy. This will of course change after Brexit. It will be harder to collaborate with other countries, as each might have its own regulations you will have to comply to. If you want to operate in other countries, you may have to secure a separate business accreditation, as the shared one provided by the EU thus far won’t be sufficient anymore. Whether that will be worth the effort is, of course, entirely up to you. 

There may be more opportunities to work locally

Additionally, a survey in 2016 found that one in three companies was interested in leaving the UK post Brexit. It’s not clear whether that number has remained consistent across the past 4 years, but numerous companies have certainly moved their HQs since then, or are planning to do so. Dyson, Panasonic, Sony, Honda – the list is growing every month. With so many potential clients relocating across the EU, and the anticipated challenges in hiring freelancers from the UK, it is likely that most companies will switch to hiring local freelancers from their own country or from the EU instead.

The flip side of the coin is that there will be a potential for more opportunities in the UK alone. Many freelancers currently living in the UK may consider going back home to keep working with their international clients. If you haven’t yet, this is the time to consider expanding your business ventures into a more local market.

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Image credit: Andy Winter

How will my tax bills be affected?

Surprisingly, tax bills are among the few things that may remain unchanged for you. You will still be paying your UK taxes to the HMRC, and nothing will change there.

However, starting January 1st, the UK will no longer be part of the shared EU VAT domain. If you are indeed operating with international clients and wish to keep doing so, you may need to register in other states too after the transition. If you are a EU freelancer living in the UK, you will be subject to the same regulations that apply to non-EU businesses – in other words, customs, borders and higher administrative costs.

Taxes and VAT are one of the several things still partially shrouded in mystery, and there isn’t much to do about them at this stage, apart from waiting. It is certainly something worth keeping an eye on for the near future.

What should I do with my Intellectual Properties?

And then there’s the issue of Intellectual Properties and Copyright – something likely to give a headache to any creative out there. Our top advice on this matter is not to underestimate the extent and power of your IP Rights. More than a few things will change, and it is better to come prepared into 2021.

Firstly, the harmonised EU IP policy will not apply anymore. UK-based freelancers have had the opportunity to register a trademark or design with the EUIPO, which would grant protection everywhere across the EU – UK included. As you can imagine, this will no longer be possible after Brexit.

Existing trademarks and rights will still benefit from comparable Intellectual Property laws in the UK, if registered before the end of the transition period (in other words, before January 1st). They will not be subject to an additional review, and they will maintain all of their EU protection.

Things will be quite different for all your future intellectual properties. From 2021, registering works in Europe will not protect your designs and works in the UK anymore. If you are looking for UK protection as well, you will have to register your intellectual properties twice, once in Europe and once in the UK. As it can be expected, this will be subject to an additional fee.

If you are an intellectual property holder, you should act now.

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Image credit: Taxi Studio

At the present moment, all of the EU applications which are still pending after Brexit will be granted a grace period of nine-months. If approved, those works will still be granted joint EU and UK protection. Which means you are still in time to file a EUIPO registration to take advantage of the grace period.

Freelancers looking to protect their works in the UK and EU are advised to register their intellectual properties as soon as possible. Though this should not be made with a light heart. Registering your intellectual properties means disclosing your ideas to the public, making them vulnerable and exposing them to the possibility of plagiarism until the EUIPO application has been approved.

If in doubt, you should seek the help of a lawyer to assist you in this transition period.

Where to find more information about freelancers and Brexit?

If you still have questions or are unsure about what to do in your specific case, here are some sources for you to find additional information as we approach the 31st December deadline.

  • GOV.UK : obviously the best and most reliable source of information on this matter. The Government website is constantly updated with news and regulations, and it now also has a business helper tool to guide you in the process of transitioning to the new Brexit laws. There will be a lot to read, with a lot of subsections and guidance papers, but it is the most official source of information out there.
  • Freelance UK: though the website isn’t the most active out there, it has a comprehensive directory of news and guides for freelancers in the UK, especially as we approach the Brexit deadline.
  • Sage has created a comprehensive guide on customs and VAT to prepare for Brexit. Definitely worth a thorough read to understand all that’s coming.

Header image: Carlos Cenoz Bermejo
 

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