What does Scottish independence mean for small businesses?

Voting for independence takes place tomorrow but there is uncertainty surrounding the impacts on small businesses.

Several of the big businesses including BP, Standard Life, and John Lewis have expressed their favour of the ‘No’ vote. However, it is still unclear what a ‘Yes’ vote would exactly mean for Scottish businesses.

A recent poll by the Federation of Small Businesses (FSB) found that two-thirds of businesses believe independence would impact on the day-to-day activities.

A survey on the forthcoming referendum also saw around 1 in 5 saying the vote had already played a part in the decisions by their company.

One of the key concerns among companies stems from the fact that they aren’t entirely Scottish.

The FSB research highlighted that 43% of small businesses had the majority of customers situated locally, and a 12% had no customers located in the rest of the UK. In terms of suppliers, 33% were local to companies, while 8% had none outside of their Scottish region.

The potential strain on the relationship between businesses and their customers and suppliers is a major concern. Even those falling into the ‘Yes’ camp maintain the relationships across the border will need to stay positive for independence to be a success.

There are many issues that need to be considered before the vote tomorrow, such as currency, EU membership, tax and regulation.

Tax is a big issue. Independence means that the Scottish parliament adopts the responsibility for all tax rates on Scotland – both directly and indirectly such as VAT.

The doubts over whether duty would be payable on sales in England or how easily workers, customer or suppliers will be able to cross the border have yet to be questioned by those in favour of a ‘Yes’ vote. However, what isn’t in doubt is how independence could affect SMEs.

While many agree that economic policies created in London is unlikely to always be appropriate for the small businesses located hundreds of miles away in Scotland, the uncertainty of independence is an undeniable worry.

Kara Copple
An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.