Where Hunt’s Brexit claims won’t stack up to Brits longing to work abroad

A project manager’s disdain at chancellor Jeremy Hunt’s speech to Bloomberg's city HQ – ‘the UK will soon probably need to start offering its own nomad visa just to get people to come here,’ probably resonated with many IT contractors.

As someone who can advise on (the currently available) nomad visas, the reaction resonated with me too, writes Kevin Austin, boss at contracting overseas firm Access Financial.

Five claims from the chancellor that do at least sound good

But theoretically, Mr Hunt’s speech should resonate with me even more, given the many positive things he told us about Brexit, and how the deal has apparently benefitted Britain or will benefit Britain.

In relation to the December 2020 agreement which was alluded to a few times by the chancellor, I will look at those five or so mentions, and suggest how Britons who may or may not have a limited company but want to work abroad might be affected, in wake of the hurdles they currently face whether employed or self-employed.

1. “Since the Brexit referendum, we have grown at about the same rate as Germany.”

Uttered by Mr Hunt to position the UK in a good light (I think), this statement is valid for GDP and GDP per head, as this OECD graph makes clear.

Of course, past growth since the referendum is no predictor of growth to come, and for Britain to be among the wealthiest countries in Europe, its GDP per head must match that of its competitors.

Yet as of December 2021 according to Trading Economics, the UK had a GDP per head of USD 44,979 versus 53,180 for Germany. Even the Eurozone average was 46,314, so the UK was already below par.

Overall, the UK ranked 14th in GDP per head, behind all of our principal competitors.

The lesson from this is obvious. Unless UK growth rates are significantly higher than those countries, we will not rank among the wealthiest of them, just as we are lagging now.

2. “That plan, our plan for growth, is necessitated, energised and made possible by Brexit.”

Any growth plan is complicated by the terms of the Brexit deal currently making it more difficult and expensive to trade with our closest and most significant trading partners.

It is unclear how Brexit energises and makes this possible. Our business specialises in contracting overseas and so we have longed for anyone, especially Brexit cheerleader Jacob Rees-Mogg, to identify the economic benefits of alienating ourselves from our nearest market, which also happens to be the world's largest. If he’s reading this, I’d welcome his input.

3. “We need to make Brexit a catalyst for the bold choices that we'll take advantage of the nimbleness and flexibilities that it makes possible.”

Nobody has demonstrated this ‘catalytic effect’ of Brexit. The act of Brexit has not advanced our nimbleness and flexibilities. If nimbleness and flexibility are our current strengths, relative to others, it is hard to see how flexibility, in particular, has been aided by the government's animosity towards independent workers.  

Indeed, as I have outlined before, the end of ‘free movement’ which is surely the definition of nimbleness, applies to all structures of contracting -- self-employment, employment and using a limited company.

4. “Brexit is an opportunity not just to change the regulation but also to work with our experienced, effective and independent regulators to create an economic environment that is more innovation friendly and growth focussed.”

Innovation and regulation seem to be bedfellows in the mind of this chancellor. Most of us in business, particularly those whose day-to-day activities try to oil the wheels of work mobility, find this coupling to be contrary to experience.

Innovation requires freedom to develop new ideas and commercialise them. From John Logie Baird and Frank Whittle onwards, the British mind has been wondrous in coming up with exciting ideas that revolutionised the world. Remember, it was us who launched the Industrial Revolution!

But almost everyone in business who I talk to in 2023 insists that the UK needs to catch up on commercialising new ideas. This slowness to monetise has been a monumental failure of the government; showing its lack of entrepreneurial zeal and ability, a sort of overcautiousness and sometimes a plain lack of money and funding. It’s not too little regulation which has held us back.

5. “I am supporting important changes to the pensions regulatory charge cap and I have used the regulatory flexibility provided by Brexit to change the Solvency 11 regulations which will begin to be implemented in the coming months.”

The chancellor’s first point is of so little material impact to the typical IT contractor it is not worth considering here. But personally-speaking, I cannot believe that Brexit hampered our ability to ensure that banks were financially sound!

Contracting overseas since the Brexit deal: nimbleness and flexibility remain elusive...

The other area to take issue with is the continued misdirection that there is “flexibility provided by Brexit.” Just a quick glance at the sort of questions from (and issues facing) individual professionals in the UK since the Brexit deal loudly convey them to be frustrated at suffering from the total opposite of flexibility. They want to know where’s easiest to work overseas; whether weird and wonderful ways to obtain an EU passport can apply to them, and if limited company directors are able to use Spain’s Digital Nomad visa.

But sticking with the chancellor’s words in his speech, the first idea that occurs to me is that people listening to his claims but experiencing the polar opposite may use their ‘nimbleness and flexibility’ to take their skills elsewhere.

We’d go further actually. If you are in a position to up sticks and your skills are in demand overseas, you are likely looking at this already, particularly if you freelanced overseas pre-December 31st 2020.

We believe that continued remote working and a growing number of nomad visa schemes enticing the most adaptable and entrepreneurial to locations that are not as unsupportive of self-employed people and small companies as Britain is, will work their spell. Remember though, unless there is the sort of scheme like the one which the project manager I mentioned at the top who was ribbing Hunt to resort to, all 27 EU countries now require Britons to apply for the legal right to reside and work in the EU. They are, therefore, in terms of immigration for Brits, no more accessible than anywhere else in the world.

Final (positive) thought

But just as the chancellor did in his speech, let’s try to end on a positive. If you have a limited company, and can obtain a nomad visa, you can still use your UK-registered ‘PSC’ to work abroad. The extra good news is that IR35 shouldn’t apply to you, as you and your clients will likely be outside the jurisdiction of HMRC. That’s not say that a UK-registered incorporated business will be the best structure -- indeed it may end up being more complex than you can justify. Another example, perhaps, of ‘regulatory flexibility’ to not get excited about.