With Theresa May’s recent recommitment to a hard Brexit, now seems a good a time as any to talk about the impact the UK leaving the single market might have for contractors in the UK and Ireland. While the uncertainty generated by Brexit’s announcement did produce a small British contracting boom (which seems to have now begun to die down), the long-term effects of Brexit for contracting in the UK will be negative for several reasons, one of the most significant of these being that multinationals will be choosing EU countries over the UK for projects and even relocating UK bases in order to retain access to the single market. To put a number on this loss in multinational activity for the UK, the May 2016 British National Institute Economic Review predicted that a hard-Brexit scenario could ultimately result in as much as a 26.9% decline in foreign direct investment to the UK.
A significant amount of FDI inflows that would have gone to a UK that remained part of the EU are now likely to instead go to its English-speaking, business friendly and reliably pro-EU neighbour Ireland. In 2016, the ESRI predicted that Ireland would be likely to receive a 6.9% increase in FDI inflows following Brexit, which would otherwise have gone to the UK. Signs of this shift in investment from the UK to Ireland have been visible from the onset of Brexit, with 100,000 UK firms reportedly registering in Ireland within one year of the announcement of the leave side’s victory, including the Northern Irish pharmaceutical company Almac Group, which choose to locate a new factory south of the border within two weeks of the vote. This movement of FDI from the UK to Ireland will undoubtedly bring many contracting jobs with it, and through supply and demand, increase rates for contractor’s in Ireland.
However, the effects of Brexit need not be a bad thing for UK contractors, as there has never been a better or easier time to start contracting in Ireland. The Irish contracting market is undersupplied, and many Irish agencies have already begun making significant efforts to bring in contractors from the UK, many of whom are likely put off by the differences between contracting in the UK and Ireland (the most significant being that Ireland lacks the dividend system in place in the UK). However, if you’re a contractor from the UK (or elsewhere) who would like to take advantage of the huge opportunity presented by Brexit for contracting in Ireland, Icon Accounting would be more than happy to guide you through these differences and provide you with all the information you could possibly need to start contracting in Ireland with minimal delay, just get in touch with us.
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