The uncertain impact of Scottish independence on small businesses

As voting on whether Scotland should gain independence from the UK takes place tomorrow, what would independence mean for small businesses?

Many larger businesses, such as BP, Standard Life and John Lewis have come out in favour of the ‘No’ campaign, but it is still unclear what a ‘Yes’ vote would exactly mean for Scottish businesses.

It is clear, however, that at a time when companies are still recovering from a deep recession, the risks they may face are a source of concern.

A poll by the Federation of Small Businesses (FSB) found that two-thirds of businesses believe independence would have an effect on the practical day-to-day running.

The survey into the views of small businesses on the forthcoming referendum also saw nearly one in five saying the vote had already played a part in decisions taken or postponed by their company.

A key cause of anxiety among companies may stem from the fact that they aren’t entirely Scottish. The FSB research highlighted that 43 per cent of small businesses had the majority of customers situated locally, and a mere 12 per cent had no customers located in the rest of the UK. In terms of suppliers, 33 per cent were local to companies, while eight per cent had none outside of their region.

This potential for strained ties between businesses and their customers and suppliers is weighing heavy on their minds. Even those falling into the ‘Yes’ camp maintain that relationships across the border will need to stay positive for independence to be a success.

The many problematic issues that will need to be considered if Scotland gains independence include currency, EU membership, tax and regulation.

Even the standard day-to-day running of a business is in question. Doubts over whether duty would be payable on sales in England or how easily workers, customers or suppliers will be able to cross the border have yet to be quelled by those campaigning for a ‘Yes’ vote. What isn’t in doubt is how fundamentally these and other issues could affect SMEs.

While it may be easy to agree that an economic policy created by 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.

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