SCOTLAND’S decision to remain part of the UK has been welcomed by the business community, includiing financial institutions, industry bodies and professional services firms.
Standard Life, the Edinburgh-based pensions and insurance giant that had threatened to move south in the event of Scottish independence, said it “respected” the decision of the Scottish people but recognised that further constitutional change is very likely following the clear result of the referendum.
“We will consider the implications of any changes for our customers and other stakeholders in our business to ensure their interests are represented and protected. As a large company based in Scotland, Standard Life is ready to contribute to this process,” it said in a statement.
In February, Standard Life said it had drawn up contingency, which included preparations to shift operations and personnel from its Edinburgh headquarters – where it has been for 189 years – as a “precautionary measure to ensure continuity of our businesses’ competitive position”.
The firm warned that unless issues around currency, Scotland’s membership of the EU, the shape and role of the monetary system, arrangements for financial services regulation and consumer protection, the approach to individual taxation – especially around savings and pensions – were left unresolved, it could force a relocation south of the border in the event of Scotland’s independence.
And while many of those issues will no longer be a problem, advisers are warning it does not mean it’s a case of as-you-were. Following the ‘no’ vote Britain’s small and medium sized businesses are still likely to be faced with changes to the business landscape. The increased devolution of powers to Scotland, promised in the last weeks of the campaign will give the Scottish Parliament control over certain aspects of the Scottish tax system.
“For the first time individuals living in Scotland and Scottish businesses could pay taxes at different rates to those in force within the rest of Great Britain. These potentially differing rates are likely to have the largest impact in the borders, where small and medium-sized businesses could be faced with an uneven playing field when competing commercially or vying to recruit and retain top talent,” said Richard Rose, tax partner at accountants BDO.
Mike Kennedy, partner at actuarial, administration and consultancy services provider Barnett Waddingham said the promise of additional powers for Edinburgh made by David Cameron means sectors such as pensions “should not rest easy”.
“The Scottish Parliament was promised additional powers from Westminster in the run-up to the vote and it is likely that they will seek to use them. If differences arise in legislation and taxation between Scotland and the rest of the UK, this will lead to complications for administering schemes with members in both regions, and therefore increased costs,” he said.