The UK has a thriving freelance workforce that contributed £217 billion to the economy in 2017 – and mothers working for themselves now account for one in seven of all self-employed people in the UK. So, what will Brexit mean for these freelance mothers?
While there is currently no definitive deal or direction in terms of Brexit, the current plan is that the UK will leave the European Union (EU) on Friday, 29 March 2019. And this separation will have certain consequences for freelance mothers in the UK.
Firstly, it’s important to recognise the impact EU membership has had on women and work since the UK joined in 1973. EU law has expanded the right to equal pay, created stronger laws around sexual discrimination and improved support for women who have been unfairly treated.
In terms of part-timers and freelance mothers, pay and working conditions have improved – and they have been given access to rights at work that they were previously disqualified from. So, on the whole, EU laws have been beneficial for women.
Leaving the EU will mean that workers’ rights, currently guaranteed by EU law, will be at risk. Equal pay, sex discrimination and maternity rights are unlikely to disappear, according to a Trades Union Congress (TUC) report – ‘Women workers’ rights and the risks of Brexit’ – but they could be eroded over time.
We’ve seen a 79% increase in freelancing mothers over the past decade and 69% of these women cite flexibility as the main reason for setting up as a freelancer. It enables women to work around childcare and use less conventional hours – evenings, nap-times, weekends – instead.
But this flexibility comes at a price, as self-employed mothers have fewer rights than employed mothers – in terms of maternity pay, maternity leave and pensions, for instance. And so the prediction by the TUC that the rights of women part-time workers and temporary workers ‘are under particular threat of repeal’ creates yet more unease.
However Stephanie Dominy – single mother of two boys and commercial lawyer for The Legal Pod – explains that there are “non-regression proposals that are likely to come into effect, which means that no worker or employee will end up with fewer rights after Brexit.” There will also be a transitional period lasting until 31 December 2020 during which most current EU regulations would continue to apply to the UK.
Beyond that period, it will be for the UK Government to decide which EU laws they will keep in place and drop. Sam Smethers, chief executive of leading gender equality charity Fawcett Society, is calling for an exception to be written into the bill to assure that workers’ rights will remain intact.
‘No one is arguing that on exit day all of our existing rights disappear,’ she wrote in an article for UK in a Changing Europe. ‘Much of EU equalities legislation, for example, is already incorporated into domestic law via the Equality Act 2010.’ But she fears this protection could be removed at a later date ‘without further parliamentary scrutiny.’
In terms of Brexit’s potential impact on freelance mothers, there are the blanket changes that will affect all UK freelancers – trading with Europe, changes to VAT, intellectual property rights and currency – but women with children are also affected by their rights of their children’s father.
The EU Parental Leave Directive (PLD) and Flexible Working Regulation, which grant fathers time off to look after their children and to request flexible working, could also be under threat. Shared Parental Leave uptake is already pitifully low, at just 2%, but any changes to parental rights could mean this drops even lower.
Women currently do the bulk of the childcare and housework. If the Government doesn’t continue to legislate for flexible working rights for both parents once the EU regulation is stripped away, fathers will be less likely to contribute at home and mothers will be forced to pull back from their careers to compensate.
On a more positive note, Brexit may present new opportunities for freelancers. “Bearing in mind the right to work will be harder to gain for non UK nationals, creating challenges for companies hiring,” says Sophie Clifford – a specialist employment lawyer with The Legal Pod, co-founder of The Resolution Pod and mum-of-two – “companies may resort to more freelance arrangements to fill the gap.”
Dominy agrees. “Brexit equals uncertainty,” she says. “Businesses hate uncertainty because they can’t plan and won’t make longterm decisions. But work still needs to go on, so they will avoid any longterm commitments and engage more freelancers to do the work. In fact, some employees may find that they have no choice but to go freelance because they can’t find jobs.”
How can freelance mothers in the UK protect themselves pre and post-Brexit?
Dominy notes the importance of contracts. For short term work – completed over a matter of weeks, or a few months – she doesn’t think much will change, as “most of our contracts are governed by English law, which has been around a lot longer than EU law.”
But for anyone who does longer contracts which may have a cross-border angle, she recommends: (a) definitely having a written contract and (b) looking into whether or not to include Brexit clauses. This being a clause that triggers some change in the contract when a defined event happens.
“The types of Brexit clause will depend on what the freelancer does,” she says. “For example, if she makes goods and exports them, there may be an impact on duties and tariffs when she tries to export those goods. The cost that she agrees at the outset may well change over the course of the contract if there are new tariffs or export regulations.”
“This also applies if she is importing something e.g. a raw material to make her goods,” says Dominy. “She may want to include a Brexit clause to say that if there are changes in tariffs and duties, she has the right to cancel the contract or change the price. If she is importing or exporting, there may be delays at customs which may impact her ability to meet deadlines that have been promised in the contract.”
Freelance mothers who offer services won’t be affected so much by tariffs and duties, “but she may be affected by currency changes,” says Dominy. “So again, she may want to consider the currency in which she is invoicing, and what happens in case of large fluctuations. It is quite common to see a currency clause in a contract, but it is often difficult to attribute something like that directly to Brexit.”
If the freelance mother holds specific professional licences to practise her trade or profession, these might be impacted, e.g. a lawyer, nurse, doctor, architect. “Usually the European licence would allow them to practise in the UK without further formality,” says Dominy. “There have been announcements to say that if a European practising licence has been registered in the UK, the holder will be able to continue practising. But if they have not applied to register their EU licence, they may not be able to continue practising their trade.”
4. Intellectual property
Like for anyone running any kind of business, there is the question of intellectual property rights, e.g. copyright, trade marks, design rights. “This is a very large area that is impacted by Brexit and there have been recent announcements on the portability of EU trade marks,” says Dominy.
“However, I have been advising businesses to ensure that they register UK trade marks in case they have not already done so. There is also a regime for EC design rights. Copyright, which is probably the most relevant for freelancers, is unaffected because it arises automatically with no need to register.”
5. Import and export
If your business is product-based, customs declarations at both the EU and UK sides might make it more difficult to sell to your existing EU customers. The Institute of Chartered Accountants in England and Wales (ICAEW) recommends applying for authorised economic operator (AEO) status, to enable simplified customs procedures. But it is best to apply early, as the process is complex and might take up to a year.
Scotland’s Prepare for Brexit website says that it might be worth considering growing into new export markets. ‘The UK Government aims to agree a free trade agreement with the EU and other priority markets globally. Do these offer alternatives for your business? Carry out market research to explore new global opportunities for your products and services.’
They also recommend assessing how many changes to trade arrangements, costs and delays may affect your business. ‘The potential introduction of customs duties (tariffs) as well as new documentation requirements and customs clearance checks could add cost and complexity to export activities.’
The UK Government has said that it aims to keep VAT rates and procedures as close as possible to what they are now and in the event of a ‘no deal’ outcome, HMRC have pledged to reintroduce postponed accounting for VAT.
However, current EU rules would mean that EU member states will treat goods entering the EU from the UK in the same way as goods entering from other non-EU countries, with associated import VAT and customs duties due when the goods arrive into the EU. Likewise, sales to EU businesses will become subject to EU import VAT (currently zero-rated within the EU).
Dominy advises freelance mothers involved in any cross-border work for longer-term contracts to consider getting advice on the way they operate with their customers and suppliers. But says that freelancers working on short term contracts with only UK-based clients “are unlikely to be affected specifically by Brexit due to her status as a freelance mother.”