UK: A ship that is sinking or floating off to better lands?

This is a question many are asking.

What a rollercoaster the last 7 weeks have been; UK voted to leave the EU, David Cameron resigned, Theresa May became the new Prime Minister, George Osbourne was replaced by Philip Hammond as Chancellor and Boris Johnson was made Foreign Secretary. No one can describe UK politics as boring at the moment.

Uncertainty still surrounds as to when Article 50 will be invoked. Many are saying it won’t be until 2017. What we need now is reassurance and clarity. It is an unchartered territory for all; MP’s, residents and businesses. And it seems like as more news reports are released the more confusing the whole Brexit thing becomes.

What effect could Brexit have on the contractor and freelance market?

Well, the truthful answer is nobody really knows. What we can hope for in the long term is a positive outcome for contractors and freelancers. Cogent spoke exclusively to industry leaders and contractors to find out their hopes for the post Brexit-future. And great news, it was mostly positive.

Julia Kermode, FCSA, shared her view on Brexit “contracting remains a positive career choice for many, with increasing numbers opting to work in this way. According to ONS figures, the self-employed currently make up 15% of the workforce, a figure that has been increasing in recent years. I anticipate that there will be increased demand for contractors in the near future, not least as a consequence of the UK exiting the EU. It seems inevitable that there will be uncertainty, so businesses might be reluctant to hire permanent staff, therefore increasing the need for contractors. Plus firms may need specialist skills on a temporary basis to help them prepare. We know that the flexible workforce has enabled the UK's economic recovery so far, and I expect that once again they will be integral in ensuring our ongoing stability”.

This view is also backed up by Chris Williams, from Network Freelance who shared his hopes for the future: “Brexit, in two years time, will be very much a non-event. It will be remembered more about the turmoil it caused in British politics than it did to the financial markets.

7 weeks on from the vote and we have a new leader, a strong pound, Soft Bank have just bid ￡24 Billion for ARM holdings, British Land announce there is an investment boom in the London property market and record their share price rise from 500p to 624p.

Australia reveals they want a free trade deal with Post Brexit UK and many other countries are lining up to see the result of the negotiations.

In two years the UK will be a stronger economic power house than it ever would have been as part of the EU. The bigger story will be how the EU recovers after Brexit, not how the UK does”.

Ian Digby, Contractor, discusses the negative and positive impact Brexit could have on the finance industry. Ian comments that there “are a number of negative uncertainties that can be expected to impact significantly on the market for contractors, including: the duration and outcome of exit negotiations (whether there will actually be an exit from the EU and if so in what form), the outlook for banking share values (these cut directly across executive remuneration and thus will focus minds sharply on business costs and hiring) and any restrictions on free movement that the EU may itself bring into effect for remaining member countries, as a response to Brexit”.

Ian goes to state that there are a number of potential positives as well, though, “increased freedom of working in other non-EU countries, an economic boost from less bureaucratic trade and compliance rules for UK firms, a possible lower corporation tax rate of 15% (suggested by George Osbourne). If the CT rate cut were to go ahead, contractors who work through a limited company could expect to see a significant reduction in tax”. 

Make or break?

Make, hopefully! Our hopes are for a stable stronger economy that supports the self-employed and creates opportunities for the next generation of freelancers and contractors.