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Well in the end it was a comfortable majority of 55% to 45% for the No voters, with the turnout at a record level of 84%. Some people might think that is the end of the matter, however those businesses trading close to the Scotland / England border may have to put plans in place soon, given the significantly increased devolved powers already enacted and the further powers promised by the politicians.
A key example of this is the ability for the Scottish Government to vary income tax rates from the main UK rate by 3% either way now and by up to 10% from April 2016. Even if the full possible variance is not brought in to Scottish statute, a 1% variance means that businesses who trade near, or on both sides of, the border (Armstrong Watson included!) could now face the prospect of running two different payroll systems for Scottish resident and English resident employees. We could also have many examples of employees in the same business doing exactly the same job in the same office or factory but with tax deductions differing by a few percent with the resulting impact on take home pay.
Another possible impact is the potential migration of people to live on the other side of the border depending on where tax rates are lowest, especially if they can easily commute to their place of work or business. This would have an obvious impact on property prices or rental yields in the whole border area, so there could be remaining uncertainty in towns like Dumfries, Annan, Langholm, Longtown and Berwick.
Of course we do not know yet, how soon or by how much these tax rates will be varied, but those with business interests must consider their planning and consultation with your local Armstrong Watson team is advisable. Otherwise, please watch this space!
Douglas Russell, Partner
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