Brexit – Is It Business As Usual?
The UK’s decision to exit the European Union may have left many business owners scratching their heads wondering what to do next, but this does not mean you should put things on hold whilst we await the outcome.
Brexit has caused a huge amount of uncertainty for business owners across the country and beyond, but there are still many things you need to attend to regardless of the ongoing wild speculation on the topic.
In this guide, we will talk about some of the key activities you need to embark upon in the run-up to the country’s supposed exit from the EU on the 29th March. Your accountant can help you gain much of the clarity you are seeking and handle much of the ‘pain’ linked to the uncertainty.
- Why Brexit could work
- How SME’s are reacting
- Facing the music
- Brexit contractor checklist
- Get expert help and advice
Brexit or no Brexit, the tax year is still ending on the 5th April, with the new year beginning the following day. You need to have your accounts sorted regardless of Brexit, so start organising your financial documents, receipts, invoices and more if you haven’t already done this.
At One Click Group, we have the experience and expertise needed to help you get everything in order and give you one less thing to worry about in these testing times.
Increased flexibility but slower growth
The uncertainty around Brexit has already had a considerable effect on the economy, with property price growth slowing down and imports and exports being hampered. Fewer EU citizens are coming to the UK, and there have been notable changes to the job market.
However, some UK workers have noted increased flexibility and opportunity as a result of the declining numbers of overseas workers setting up home in the UK, whilst some employers have expressed frustration over this, saying they are finding roles increasingly hard to fill.
Despite the doom and gloom about Brexit that we often see in the media, it seems there are a number of reasons for UK contractors to be optimistic as the country moves increasingly closer to March 29th. Many UK contractors have been able to command higher pay rates due to the reduced competition from other workers. In addition, growing numbers of businesses are paying more to create more flexible workforces that can be scaled up or down in line with their needs.
An improved reputation?
There’s also evidence to suggest that attitudes towards freelancers and contractors are improving. With the growing demand for the services of talented freelancers, it’s thought that around half the UK workforce could be freelance by next year. The flexibility freelancers and contractors can offer is of high value to businesses with ever-changing needs.
Filling the skills gap
Many high-skill industries are seeing a labour shortage. This means many skilled workers are currently able to charge more for their services. Surveys suggest the vast majority of companies and organisations are finding it hard to recruit talent for high-skill roles.
The HR sector is just one industry that seems to be seeing a boom in the current climate. With businesses working harder to recruit and retain the best talent, there is growing investment in HR services, with growing opportunities available for recruitment specialists working on a freelance basis.
Small business owners are adopting a wide range of approaches as they defend themselves from the uncertainty related to Brexit. Some companies are adding more funds to their cash reserves in case they see a substantial drop in trade. It’s also increasingly common for small businesses to set up operations in the EU in addition to their UK bases. This is enabling them to serve companies and customers within the EU and be much closer to the needs and demands of their client base.
Some businesses have also decided to start increasing their prices now to protect themselves from the pound dropping further in value. Import tariffs are also proving a big concern for many SMEs, with companies holding back on making purchases until more clarity is available.
Plans put on hold
Brexit uncertainty has made companies from various industries show reluctance in taking on more permanent staff. A potential drop in business post-Brexit has led to more companies enlisting the support of contractors as opposed to full-time in-house staff. Many companies are simply carrying on as they normally would until more clarity is available, feeling they have no choice but to do so. Some businesses are also finding it harder to enter into long-term contracts with other companies due to Brexit uncertainty.
EU national rights
In late 2018, Britain decided to end special treatment for EU nationals, announcing that it will give priority to skilled workers and treat EU and non-EU citizens as the same. The news left some small business owners worrying about how to recruit the staff that they required.
Under the new proposals, skilled workers coming to the country would need to meet a minimum salary threshold, although this figure is yet to be decided. They would also need sponsorship from a company. The Migration Advisory Committee suggested the minimum figure should be set at £30,000. However, many businesses claimed this was an unfairly high sum. A decision has yet to be agreed on this.
Loan Charge worries
Another worry for many contractors is the 2019 Loan Charge. A significant number of contractors have been told to pay tax to HMRC after taking out loans that were regarded as tax evasion or avoidance. It’s expected that a large number of contractors entered into these schemes, with advertising failing to inform them of the risks attached to the products. Contractors affected can take steps such as taking action against their advisors or agreeing settlement arrangements with HMRC. It’s also thought that up to 60,000 contractors could be affected.
A defiant spirit
These are certainly challenging times and it’s understandable why many businesses have become frustrated by the very mention of the ‘B’ word. However, many entrepreneurs have decided to plough on regardless in the face of adversity, equating scaling back to ‘giving up’. Whilst many SMEs are predicting sizeable changes to their industries, we do not know what form these will take and only time will tell.
On a more positive note, it is hoped that there will be increased levels of inward investment following Brexit from entrepreneurs based outside of the UK despite the hesitation to invest felt by many currently. It is perceived that investors who are prepared to take a longer-term view of the UK economy, stand to benefit the most.
Despite all the speculation on Brexit, it’s also vital that other key issues are not ignored by contractors and SMEs at this point in time. It’s essential that companies and contractors don’t delay essential tax and accountancy decisions because of Brexit. The country’s supposedly imminent exit from the EU is far from the only issue on the minds of contractors and businesses, with topics such as IR35 also causing a great deal of worry.
Though working on a self-employed basis comes with a whole host of benefits including freedom and flexibility, it can also deliver frequent uncertainty – and this has been compounded for many contractors by the lack of clarity on Brexit. Contracting may be heavily associated with freedom and opportunity, but it also strongly linked with instability and insecurity. At the One Click Group we are acutely aware of this and we are here to guide our clients through the maze of uncertainty.
Greater resilience needed?
Chances are that you are currently faced with incredibly important decisions on accounting and budgeting as we speak. By failing to address these, you could be risking bigger problems further down the line. Contractors and SMEs are advised to work hard and to carry on as normal despite Brexit-related uncertainty. Many experts say the most determined contractors and SMEs will be resilient enough to weather the storm regardless of what happens further down the line.
There are several things contractors can do right now to prepare themselves for any eventuality. One of the biggest fears for contractors is the prospect of losing work. Here are some key tips on protecting yourself from even a ‘no-deal’ Brexit:
- Polish up your CV – The more impressive your CV is, the easier it will be to stand out from the crowd should competition for roles become fiercer. Make sure all your qualifications are included on your CV
- Read up on your clients – Are the clients you have been working for likely to scale down or cease their UK operations? Have they announced any changes to their current strategy due to Brexit? Could a no-deal Brexit actually benefit them? It’s important to do this whether you’re currently working for a client or are interested in doing so in future.
- Learn new skills – The more skills you have, the easier it will be to remain in gainful employment. If you can provide a wider range of services, you will be more appealing to employers, even if this means shifting the focus away from your main skill for a period of time.
- Talk to One Click Group – We can offer a wide range of tax planning services to help you maintain a clean financial bill of health. Whatever happens, we are confident we can help you weather the storm and help you avoid falling behind with tax.
Get the guidance you need
We offer a range of contractor accountancy services to meet various needs. Our clients include a wide variety of freelancers, contractors, consultants, locum doctors and other self-employed individuals. Our services are designed to give you the tax and accountancy guidance that you need and minimise the pitfalls of going it alone.
When you have the support of market-leading tax and accountancy specialists behind you, you can focus on what you do best, safe in the knowledge that everything is being handled by competent and highly knowledgeable professionals. This is the case not only when the economy is performing well but at times of great uncertainty too.
The Umbrella service
Our Umbrella service is the easiest way to get paid. When you become an employee of One Click Group, we will invoice your agency on your behalf, calculate your tax and National Insurance, and make net payments direct to your account each month or week. This means you don’t have to worry about paying too much or too little tax and always know where you stand financially.
Our services reduce your paperwork burden considerably and give you the benefits of working with a large company without losing the freedom of picking your own assignments. What’s more is that you’ll receive statutory payments including sick and maternity pay, and there’s a valuable rewards scheme available.
Limited companies and agencies
We can also come to your assistance if you’re operating as a limited company to take advantage of things like lower dividend tax rates, the Flat Rate VAT scheme and more. It’s well known that limited companies have considerably more paperwork to deal with than sole traders, but we can step in and complete the vast majority of this on your behalf.
We can give you access to online bookkeeping software and also have robust links with a range of reputable recruitment agencies, who are part of our lifeblood. Many recruitment agencies refer their candidates to us to ensure all liabilities are covered and they can focus on making placements whilst we reduce the admin burden in the background.
If you need advice and support regarding Brexit and want to know how to be fully prepared, we’re here to help. You can reach us right now by giving us a call on 0345 557 1287, sending an email to firstname.lastname@example.org or complete the form on our website.