UK recruiters join Trans-Pacific partnership: what could it mean for Britain’s freelancers?

Britain’s recent entry into a major international partnership has flung open the doors to a global talent pool, potentially reshaping the prospects for UK recruiters and the contractors they place. While this move promises exciting new opportunities, it also raises questions about the potential impact on British contractors.

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What is the CPTPP?

In December 2024, the UK formally joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). CPTPP is an Asia-Pacific trade bloc made up of 11 countries plus the UK. The 11 original members are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam

The UK is the first new member since the bloc was established in 2018 and the first European country to join. Other countries (including China) have applied to join CPTPP or expressed an interest in doing so.

From 15 December 2024, the UK will be able to trade with eight CPTPP members under the terms of the agreement. These eight members are: Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, and Vietnam. The agreement will enter into force for UK trade with Australia on 24 December and for trade with Canada and Mexico 60 days after they ratify.

Is this good news for staffing companies?

As the UK officially becomes part of the CPTPP, the Association of Professional Staffing Companies has called the move ‘highly positive’ for recruitment businesses. According to APSCo, this move means staffing companies will now be able to capitalise on the economic growth in the Asia Pacific region.

The partnership grants UK recruiters access to a vast network of skilled professionals across borders. This means they can now source talent from the Asia Pacific region, offering clients a wider range of expertise and potentially driving down costs.

Tania Bowers, Global Public Policy Director at APSCo explains:

 The CPTPP improves the provision of services between 12 countries, which means that UK recruiters can now more easily work across APAC destinations including Japan, Singapore, Australia and New Zealand. In many of these locations, local regulation has previously meant that domestic businesses were given preferential treatment, so expansion into Singapore, for example, would have required having a physical presence on the ground. Under the new partnership agreement, the red tape that many firms have faced is eased, from access to temporary work visas to get consultants on the ground for work, to the removal of historic requirements for a contract or prior experience in the country to bid for work.

Is this good news for UK freelancers?

For UK freelancers, this could be a double-edged sword. On the one hand, it could open up exciting new possibilities to work with international clients on a wider variety of projects. However, the increased competition from overseas freelancers could also put downward pressure on rates and make it harder to secure coveted contracts. Will UK freelancers be able to compete effectively with those in countries with lower costs of living?

This is a significant development that could have a profound impact on the UK’s freelance and contractor market. While it presents exciting opportunities for those willing to embrace globalisation, it also highlights the need for UK freelancers to differentiate themselves to remain competitive.

The UK government said of the partnership:

Some groups have raised concerns over Investor-State Dispute Settlement (ISDS) provisions. These are highly controversial with some arguing that they allow foreign investors to challenge government policies in areas such as the environment, workers’ rights and health. ISDS provisions have been excluded between the UK and Australia and New Zealand under CPTPP, in line with the UK’s bilateral free trade agreements with these countries. The Conservative government said its right to regulate in the public interest will be preserved.

The move could also include many questions for UK contractors should they have an opportunity to work for an overseas project or client when it comes to IR35 legislation. Ensuring contractors understand the complexities of international tax laws and employment regulations will be crucial for both recruiters and freelancers.

According to contractor insurer Kingsbridge, the following is a basic rule of thumb for contractors working on non-UK assignments:  

IR35 and non-UK residents

If you’re a contractor living outside the UK but working for a UK client, IR35 usually doesn’t apply if you’re not liable for UK taxes. However, you should check the tax laws in your home country, as they may have similar regulations.

IR35 and overseas clients

Even if your client is based overseas, they may still fall under IR35. If the company has any UK presence (like an office or branch) and pays UK taxes, they are responsible for determining your IR35 status and handling any related tax obligations. It’s important to remember that most countries have similar rules in place, so overseas clients should be aware of these potential obligations.

Example: A UK-based IT contractor working for Microsoft in France would still be subject to IR35 because Microsoft has a UK presence and pays UK taxes.

Exception: If your client is based entirely overseas with no UK connections, then you are responsible for determining your own IR35 status.

Brain drain of UK talent?

With Brexit still fresh in the minds of many, some are questioning whether this new global outlook could lead to a brain drain of top UK talent seeking better opportunities abroad.

As it stands, the partnership is good news for UK recruiters. We have yet to see if Great Britain’s independent talent will equally benefit from the partnership.

What do you think?

Share your professional thoughts in our comments section.