14 September 2014    |    Taxation

Scottish referendum

With the referendum at the forefront of many peoples minds, we have been asked by a large number of Scottish clients what they should be doing and how they can mitigate any risks, in the event of the Yes campaign being successful.

Our initial advice is that taxpayers should not panic, as in this event there is likely to be a long period of transition during which matters such as currency, banking, mortgages, taxation and Scottish economic policy will become clearer.Scottish referendum

It is during any transition phase that specific client groups may need to take action and we will keep you fully informed of any relevant steps that we think you might consider.

It is likely that those most affected are likely to be exporters and service providers with significant sales outside Scotland, who need to reassure customers that service will continue as normal.

Likely courses of action include such things as possibly setting up a branch in England or Wales; opening a bank account in an English branch of their bank; and, for e-commerce, to make it clear the currencies that can be used.

Nicolson Accountancy already have companies in Scotland and England for this very reason.

As all of these steps can be done quickly if necessary, we strongly recommend that you adopt a “wait and see” approach to this for the time being.

We would, however, strongly suggest you review your website to ensure that any ambiguities in language are removed: the use of the words “export” and “foreign” are two examples of words which could be misconstrued and which could encourage potential customers to leave your site.

There are some other possible impacts where we are evaluating mitigation strategies for clients, and more information will be available in due course

Client funds

We hold substantial funds on behalf of clients through the UK and beyond.  Although we do not believe there is any actual risk, we have deposited an appropriate proportion of these funds on deposit with the Bank of Scotland in a London branch as a further (unnecessary) safeguard for our non-Scottish clients.

This is a secure client account service we have used for many years to keep designated client funds segregated and earning some interest even at today’s low rates, and is simply an extension of the prudent approach we follow.

Disclaimer

The information provided is for general information purposes only.

Legislation and details may have changed since this was written.  The text may not include all matters that are relevant to your individual situation.

You should not make decisions, or refrain from making decisions, without taking further professional advice about your specific circumstances.

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