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Brexit, Covid-19 and Overseas Contracting: Act Fast to Guarantee Your Future Income

Updated: Oct 16, 2020

As economies around the world gradually recover from Coronavirus, workers and businesses alike begin to wonder how normality will be restored. To add to this uncertainty, UK overseas contractors could be majorly affected by changes to the usual

tax and compliance frameworks as Brexit comes into being in 2021.

At Ace Pay Me, we are committed to ensuring the financial security of our contractors. To help serve you, we have put together the information in this article to shed light on the economic and business related consequences of both Covid-19 and Brexit, as we believe we can provide expert guidance to ensure overseas contractors get through these times as smoothly as possible.

Looking forward from lockdown

As expected, the volume of available contract roles fell sharply in March with the announcement of a global lockdown due to the Coronavirus pandemic. Fear over the future state of the economy led to a decision-making paralysis from businesses as they began to prioritise survival over growth.

As both intra- and inter-nation travel was greatly restricted, the logistical and practical difficulties of running business projects have had negative consequences for contractors seeking temporary employment overseas, with some companies shutting down operations entirely.

Although it may have seemed like it, it’s not all doom and gloom with regard to Coronavirus economic recovery. As lockdown restrictions are gradually lifted, many businesses are planning to launch a range of new projects to ensure a full financial recovery. This could represent good news for contractors, as this could mean that a significant number of contract roles will be opened up as a result.

Brexit, contracting and compliance

In addition to Covid-19 creating new obstacles for the business world to overcome, the UK’s exit from the European Union looms on the horizon. Brexit will certainly bring significant changes for UK businesses when looking to undertake new projects overseas, even if there are currently no policy alterations that have been confirmed by any government. To help plan ahead, we’ve listed 5 likely ways in which Brexit could affect contracting by the time it comes into effect:

1. UK limited company contractors may no longer be able to list their employment with a UK company while working overseas, as this will likely not be recognised as a legitimate operating structure to EU governments.

2. The 183-day rule will continue to complicate tax and compliance for UK limited company contractors. It’s of critical importance that overseas contractors seek expert help to clarify and comply with this rule so they can avoid facing legal action.

3. Most EU countries will no longer recognise A1 forms post-Brexit. Germany, France and Belgium have already stated their intention to make A1 forms illegitimate, and it is expected that many of the remaining countries in the EU will follow suit.

4. Unless employed on very short-term contracts, UK ‘umbrella’ workers should not be working outside the UK. It is expected that this restriction will be tightened further post-Brexit.

5. Overseas contractors not registered to their work location for a Right to Work (RTW) letter will likely be required to apply for another form of official authorisation in order to gain employment legitimacy. The details for how this will work are yet to be confirmed, but this may come in the form of a work permit, visa, or another form of RTW.

New overseas projects for UK businesses

As well as seeking to restore financial stability post-Coronavirus, UK businesses will be looking to establish new overseas partnerships to exploit foreign markets as post-Brexit policy changes come into being. The expected increase in overseas projects is likely to create a considerable number of job opportunities – with contractors in particular expected to be among the greatest benefactors.

Guarantee your financial protection

For businesses, compliance will be a pre-requisite to undertaking any new overseas project. Despite this, it’s entirely possible that some may seek to cut corners as they look to restore financial stability post-COVID and post-Brexit. Our concern is that such businesses would endanger their contractors and their clients, as well as their own business, if they failed to satisfy all the legal requirements of undertaking foreign business projects. Here at Ace Pay Me, we can provide expert guidance to contractors to ensure compliance regulations are met by their employers and agencies, to ensure our clients' income and livelihood are securely protected moving through these tumultuous times.

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