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Scottish independence: The accountant’s perspective

4th Sep 2014
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With the Scottish independence vote looming in just two weeks, AccountingWEB takes a look at some of the key considerations and reactions from the accounting profession.

On 18 September Scotland will hold a referendum to decide whether or not to separate from the United Kingdom.

It’s worth noting that whichever way the vote goes later this month, Scotland has committed to the establishment of Revenue Scotland - the tax authority responsible for collecting devolved taxes from April 2015.

The Revenue Scotland and Tax Powers Bill was recently passed and will now be submitted for Royal Assent in due course.

Much of the independence debate so far has centred around currency, North Sea oil and share of national debt.

From an accountant’s perspective, in the event of a “yes” vote next month, it will most likely be issues around tax, business and auto enrolment dominating discussion on AccountingWEB in the years ahead.


Most would agree that tax is one area of policy which would be ripe for reform.

As a starting point, an independent Scotland should decide on the basic, overarching principles of its new tax system, but it’s unlikely it would stray too far from UK principles.

The ‘Nordic Model’ would most likely be on the table involving the transition to a high-tax economy. However, this model hinges on equality, high trust in government and social cohesion - qualities an independent Scotland would arguably lack. In addition moving from a relatively low-tax system would take a huge amount of time, effort and money.

Targeted tax reforms are more likely to be manageable in the short-term than a complete overhaul of the entire Scottish economy.

But Phillip Fisher said in his column that if he was John Whiting, and should the Scots go for broke, he would immediately be offering his services to create a perfect tax system from scratch.

“Who knows, within a couple of years those lucky devils from the Borders to the Shetlands might have a single income tax rate, no social security contributions, capital gains tax or inheritance tax and a difficult decision on whether to plump for a sales tax similar to VAT.”

But the greatest challenge is likely to be administering the tax system, as well as the costs and time associated with developing it.

ICAS has also noted that most of the Revenue’s policy-making takes place in London, with their Scottish staff holding far less experience.


Small businesses in Scotland and the rest of the UK will have to adjust to clients and customers now being in another country, and possibly with a separate currency.

The Highlander, an AccountingWEB user, said it would be a massively expensive mistake to separate from the UK.

“With Salmonds current plans to remain using the £ we wouldn't be achieving true independence anyway as he who controls the currency controls the country.”

If Scotland leaves the EU, Holyrood and Westminster could negotiate a free trade zone, but if not it’s likely that import and export tax would be charged on any goods crossing the border.

AccountingWEB member ireallyshouldknowthisbut said: “I am English but have several Scottish clients… Once the countries are separate I will not be able to act for a foreign tax system”

On the idea of "portfolio splitting", he asked: “So anyone want a few Scottish BTL clients and a Scottish registered limited company in exchange for some English or Welsh ones?”

Auto enrolment

Any change to the tax and pensions system would create significant issues for the auto enrolment programme, particularly for companies operating in both countries.

For those companies with employees north and south of the border, you would have to get into who is resident in each country and the definition of that residency.

If Scotland does go for independence then the legislation will still stand in Scotland that employers will have to enrol their eligible staff into a workplace pension.

One potential problem is that NEST won’t be there to support these businesses as it won’t be available to non-UK businesses.

Karen Thomson of the CIPP said in a recent article that with auto enrolment continuing its long and painful process we have to consider what Revenue Scotland’s approach will be.

"One concern for payroll would be tax relief at source for occupational pensions because this will be especially complex if the employer has a mixed workforce of Scottish and non-Scottish taxpayers," she added.
AccountingWEB has launched the No-one gets left behind campaign to alert as many accountants as possible to the obligations implied by auto enrolment. Read our simple eight-point statement which sets out the auto enrolment facts you need to know.

Further reading:

What kind of a Scotland would you like to see? (NB: We know it's an emotive issue, but one on which accountants have a particularly relevant perspective. Please bear that in mind and keep the discussion on a professional rather than personal/political level).


Replies (17)

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By jeremy28
05th Sep 2014 12:21

On another issue...

Which Government will pay the billions of pounds necessary to relocate Trident? Why should rUK pay for what Scotland decides? It's the Scots who benefited from the local employment etc, so why should rUK have to pay for a location shift?

There will be loads of similar issues where rUK have to shell out for this ridiculous (I now take cover under my desk) idea.

Thanks (2)
Replying to FirstTab:
By irbrbbas
05th Sep 2014 13:01

Other issues

hey, Jeremy28,

No offence intended (definitely tongue in cheek time) but who needs to pay to relocate Trident? Big Eck could just fire off the missiles in the general direction of various Islamic states, Moscow, Jerusalem, London and Washington. Soon see who's multi billion defence systems are up to scratch - and hiding under your desk wouldn't be an option!!

(just joking....I'm not a terrorist) but condemning rUK to a possible perpetual Tory government? Simples - revenge at last for Culloden!! 

If we're going to be so much Better Together, as the unholy alliance pleads, then why aren't we Better Already? Does anyone really think we are?

Of course there is a down side too - we'd need to be less xenophobic about the English.

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By johnporter
05th Sep 2014 12:59

On another Issue

We also benefited from the threat as of Now that if  Mr Putin gets upset he can wipe out central Scotland at a stroke (this does include the population)

The problem with moving Trident to the Thames would be severe risk of flooding plus all be on Next Train heading North



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By jiatbanus
05th Sep 2014 13:33

USSR has split assunder!

When the USSR spit up did anyone debate and bully the individual countries about the consequences of independence from Russia? Or did the West only suggest how good it would be to be independent. How can we help you?

Only today the debate is "How much money and help can the EU give to Ukraine."

What about the dissemination of other countries from The British Empirea?

Who else used or still uses the £ (pound) without all this fuss? And who "invented" the Pound, anyway?

Dare I mention the Irish Punt and the "tiger economy", which we bailed out separately from the EC bailout.

Who needs Trident. Did such a threat Venezuela?

The decision is only economic at the fringe - the fence sitters. It is totally emotional otherwise.

I was at high - school Scotland when I first became aware of how Westminster insulted and rode rough-shod over Scotland.

In the end - the current Scottish Government cannot lose - irrespective of who ends up with the majority.

Finally - it has never been a UNITED KINGDOM. Separate flags, football teams, language and certainly attitude

I think that if Scotland didn't hold a referendum, the English public might have done soon, anyway..

Jock. (alias the venerable Wee Sonny McGregor) 



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By tiercel55
05th Sep 2014 13:37

I am a Scottish CA and as far as I am concerned it would be a financial disaster for Scotland if we vote yes. If you wish to read a good fairy story read the SNP's White Paper - I have never read so much rubbish in my life - nothing can go wrong in Salmond land - trust me he says and everything will come up smelling of roses - no mention of the massive costs which would be incurred. For a so called trained economist Salmond conveniently forgets and ignores all the normal rules and laws of economics. I hope common sense prevails and that people will see through all the bluff and bluster. I will definately be recommending to all my clients to move their savings should the yes vote prevail. We Scots need to get rid of this huge chip on our shoulder. We all have the same aspirations whether we be Scots, English, Welsh ,or Irish.


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By jiatbanus
05th Sep 2014 14:24

Scottish CA

Hi there,

I guess you don't work in England, then.

Oh - and neither do I now. Spain has been OK for me for the last ten years. (see name)

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Donald MacKenzie
By Donald MacKenzie
05th Sep 2014 15:23

If we vote to leave it will be because the Scottish government has shamelessly lied about the "opportunities" without admitting any of the threats. We do not know what currency would replace the pound, we do not know how much it would cost to create new bodies to run things like passports or vehicle licencing. Estimates vary from £200 million to £2 billlion. Guess which was from Mr Salmond and which from an expert.

We would see tens of thousands of finance sector jobs head south.

Once systems were different it is unlikely that I could continue to act for clients based in England.

If laws (tax etc) were out of step our ease of moving to or from rUk to Scotland would be reduced

Thanks (3)
Replying to Tax Dragon:
By jiatbanus
06th Sep 2014 15:17


Since when did members of any Party/Government not lie?

I doubt tens of thousands of finance jobs will "head south". England could not afford Aberdeen levels of salary. It's a fantasy world there.


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Replying to Wilson Philips:
Donald MacKenzie
By Donald MacKenzie
07th Sep 2014 09:52



It is pretty low standard to expect, or allow, politicians to lie, because it is all you expect. It is a very weak reason to split a country based on who tells the most attractive lies.

Aberdeen salaries are oil related.

The jobs and companies that would move out are in the financial sector in Edinburgh, Glasgow and elsewhere. The EU requirement to have your headquarters where you have most customers would require many to move. Others, with many of their clients outside Scotland, would move to avoid having to operate under two regulatory systems. 

I have clients in England and Scotland. If we looked a few years out it is unlikely that I could operate in both if they were separate states. I would be unable to keep up to date with diverging systems. How many UK based professionals can also operate in Ireland for example?

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By redboam
06th Sep 2014 07:42

Good News for Some

A yes vote looks like it would produce a bonanza for insolvency practitioners.

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By carnmores
07th Sep 2014 11:37

i think the Yes team have peaked

10 days too early

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By jiatbanus
07th Sep 2014 14:12


Can't agree. I've done work in Aberdeen over the past few years and I've worked in London for many years. Aberdeen salaries are fantasy based with no one to compare with.

Also; it is a fact that MPs lie. That's why you need to ignore them all.

The latest analysis. I'm a Scotsman and I do not have a vote because I do not currently live in Scotland. It seems the YES swing might be at the margin caused by 100,000 European immigrants to SCotland who HAVE the vote and choose to remain in Europe - as does the Scottish government. GB doesn't!

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By The Highlander
08th Sep 2014 12:27

Missing the point

Jiatbanus I think you missed Donald Mackenzie's point.  The Scottish financial sector is based in Edinburgh (Insurance & Banking) which accounts for well over 10,000 jobs.  A number of them have already stated that if Scotland gets independence they will be forced to move their headquarters to England, hence the loss of a large number of jobs.

Aberdeen jobs are mainly oil based work and although the money there is exceptional it is a relatively small number of people employed within the sector and by no way makes up for or is capable of absorbing the job losses that would occur in Edinburgh and Glasgow.

If Scotland based EU immigrant employees are voting YES because they wish to stay in the EU they obviously don't understand that an independent Scotland would not automatically be a part of the EU and are unlikely to get in either due to Spain already stating they would block any attempts.

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Donald MacKenzie
By Donald MacKenzie
09th Sep 2014 09:02

EU membership

to jiatbanus

GB does not expect to move out of EU. Some people do but it is not policy for any major party. The conservatives wish to renegotiate some aspects of the EU and repatriate some powers. They would then hold a referendum and recommend STAYING IN.

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By jeremy28
09th Sep 2014 09:36

and more stupidity

silly people on radio 4 this morning discussing further devolution and giving tax raising powers to regions in the UK. Doesn't anyone think what the effects would be of having different income tax or VAT rates in different parts of the country? It would be great for consumers, with a race to the bottom in tax rates, with different regions lowering their tax rates to attract investment, but how would it practically work?

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By johnporter
09th Sep 2014 14:37

Scottish Independence

It's a sad fact that instead of bickering a couple of years ago the No parties had a agreed a Devo max solution as was basically outlined this morning with the option of an Independence referendum in say 5 years time.(if it's all lies) They probably would have won hands down.

Instead I had a Better together pamphlet through the door with their main supporter being JK Rowling who writes fantasy tales! Mnd yoy thats maybe better than Gordon i stole your pension Brown.


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By jeremy28
09th Sep 2014 15:33

Andy Murray

Even the ATP are divesting, Murray moving out of the top ten...

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