How will Brexit affect entrepreneurs and freelancers?

Brexit has created a feeling of uncertainty over the UK economy since the vote to leave the European Union (E.U.) in June 2016.

For the self-employed, this lack of clarity only adds to the level of uncertainty in our day-to-day business activities.

In this guide, we’re hoping to dispel a few myths around the upcoming E.U. exit and what entrepreneurs and freelancers can expect:

Self-employment will continue to rise

In a 2018 survey of over 1,000 self-employed workers, 63% said they think Brexit will have no direct impact on their business. This optimism has been been acted upon too: new figures revealed by the Office for National Statistics (ONS) show the self-employed sector has grown by 76,000 compared to the same time last year.

Despite Brexit being on the cards for March, these statistics show that the leap into self-employment is no-less attractive.

Ryan Barnett, Economic Policy Adviser for IPSE (the Association of Independent Professionals and the Self-Employed) issued a statement saying: “This data shows this sector is going from strength to strength because the freedom and flexibility of this way of working are still very attractive to people across the UK.”

The number of women in full-time self-employment has also continued to rise. 

Investments will change

When it comes to financial effects, one thing is certain: Brexit has been one of the leading causes of the pound’s fall in value over these last few months.

Despite this negative assessment, it is predicted that there will be more investment in small businesses by private equity firms. The fall in the pounds’ worth is encouraging international investors to make investments in British businesses now, with the hope that it will recover and make even higher returns in the future.

The falling value of the pound may also encourage outward investment into international markets, but the long-term fall could negatively affect business savings and overall value.

Digital tax reporting may be delayed

On a more technical note, Brexit appears to have taken priority over certain projects at HRMC.

“The government has initially planned for income tax reporting to be carried out under the scheme by April 2020 … This has been put on hold so HMRC can focus on the UK’s Brexit preparations.” said

If you work with an accountant, it may be worth reviewing their rates when digital tax reporting does launch: the system is designed to making filing tax reports easier and therefore could cost less in the future.

Brexit anxiety continues

One of the big effects of Brexit that is clear is its toll on mental health. After the announcement of the 2016 vote, the Mental Health Foundation wrote:

“Shame, anger, regret, fear – these are some of the most powerful emotions we can experience. They are the big drivers for anxiety and stress … Managing those feelings proactively and responding sensitively to others could make a huge difference to how you adjust to whatever the post-Brexit reality brings.”

Brexit is one of the biggest upheavals our economy has seen since the 2008 crash. While it may be difficult to predict what a post-Brexit economy looks like, it is clear that the stress caused by its uncertainty is real.

For the self-employed and employed alike, it may be worth finding ways to strengthen your mental resilience around the precarious next few months.

Here are our suggestions to help you strengthen your resilience:

It appears that Brexit will continue to be unpredictable, but in these volatile times, we do have the opportunity to nurture our wellbeing and create business success.