What happens to ecommerce if Scotland leaves the UK?

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Scotland hmThere’s just a week left until people living in Scotland get to vote on whether Scotland should leave the UK. (Yes that doesn’t include Scottish people currently residing in England but does include English, Welsh, Irish and in fact any EU citizen resident in Scotland).

By all accounts the vote is too close to call, with the “Yes” campaign having closed the gap. Leaders from all three parties have rushed up to Scotland to try and sway undecided votors to vote “No”, but the big question for many Tamebay readers is if the “Yes” vote wins what does it mean for ecommerce?

When will it happen?

Firstly nothing much will happen until the 24th of March 2016, apart from a lot of politicians hashing out how to divorce the country relatively amicably. The 1707 Act Of Union would be dissolved and a new constitution created for Scotland. The Queen would according to the Yes campaign remain Queen of Scotland too, the Union of the Crowns dates back to 1603 when King James VI of Scotland inherited the English throne so predates the 1707 Act of Union.

So far as the politics go Scottish residents could still vote in the next General Election, but then come March 2016 Scottish MPs would be kicked out of parliament potentially creating a power swing leaving a sitting Prime Minister with a substantial minority of MPs.

Finances

Scotland would undoubtedly walk off with a chunk of the National Debt, but while the “Yes” campaign are convinced they could keep the pound, the “No” campaign are adamant that that just wouldn’t work. Scotland could have to adopt the Euro or even form it’s own fiat currency. Which ever solution if Scotland can’t use Sterling that will create a nightmare for online traders regardless whether they’re North or South of the border.

Borders

Talking of borders no one is quite sure what happens if Scotland is no longer part of the UK, will they apply to join the EU, will they be welcome as part of NATO? What happens to the armed forces?

The latest from the “Yes” campaign is that they envision open borders, but politicians are already saying if Scotland adopt different migration policies that border posts with passport or identity checks could be put in place.

Of course you’d also need to apply for a Scottish ID card or Scottish passport, although a UK passport would suffice until it expired. However British citizens living in Scotland would automatically be considered Scottish citizens when they came to renew passports.

Couriers

Regardless if there are border patrols or a different currency, the chances are high that couriers will charge a premium for delivering “outside the UK”. With a bit of luck it’ll be limited to Europe delivery rates, but if Scotland isn’t within the UK there’s an outside chance they could apply “Rest of the World” tariffs. It’s yet to be seen what proposals for the Royal Mail would be, again it’s likely a “Scottish Royal Mail” would have to be formed to put in place a Universal service for Scottish residents.

Taxation

An independent Scotland would be able to set their own rates of tax, benefits, working family tax credits and even VAT could be set at different rates. This would mean someone in Scotland could have to charge different VAT rates to someone running a business in the rest of the UK and for buyers this would definitely be confusing.

Also, once your sales exceed the VAT registration threshold in any EU country you will need to VAT register there. This could seen Scottish sellers having to register for both Scottish and UK VAT and likewise many UK sellers who sell to Scotland could have to register for Scottish VAT.

Marketplaces

No one seems to have talked about eBay.scotland or Amazon.scotland. It’s likely that the marketplaces themselves would prefer to avoid any distinction between their .co.uk domains and new Scottish marketplace. In reality however it may be just too complicated with different currencies, taxation and domestic courier rates (for the UK and for Scotland) for them to avoid opening up new Scotland only sites.

Is Scottish independence a good thing?

Not being a Scot, it’s a difficult question for me to answer and any divorce, as with marriage, will inevitably be messy. However when looked at dispassionately from an ecommerce perspective it’s hard to see advantages and easy to see disadvantages.

Different currency, different taxation, higher courier rates and potentially even separate marketplaces from the likes of eBay and Amazon all suggest that businesses both in Scotland and in the remainder of the UK would be better with a United Kingdom than an independent Scotland.

59 Responses

  1. Small mail/ecommerce businesses north of the border must be bricking it right now.

    Faced with all sorts of unknowns in the event of a yes vote, anyone dealing at the sharp end in a competitive market will most likely lose any slight edge that they might currently have.

    With a small thinly spread dispersed population both postal and courier rates just within Scotland would have to rise.

    And a question – how would Royal Mail be compensated if they lost Scotland? Surely much more likely is for them to stick a Saltire on the vans and depots and carry on?

  2. we live and our Business is based north of the border if its yes we move our business to England
    we quite fancy the Donnington area lol [we often stay at the golf resort there]

  3. We live in, and trade from, Edinburgh. I am not Scottish.

    I am not at all worried about Scotland going independent. It will be just business as usual for us, I am sure.
    Everybody is going to keep doing their job the same as always and enabling commerce, both sides of the border: governments, couriers, banks, eBay, Amazon, etc, etc.

  4. The biggest advantage of Scotland leaving the UK is that it will be less likely Labour will get back into power.

    Labour are probably a bigger threat to the growth of my business than a few extra regulations here and there for Scotland. Do I want higher taxes, more regulation, more interference, higher labour costs, more paperwork? More likely I’ll get all that with a Labour party in power and the Scots are a major contribution to that problem.

  5. regardless of if its yes or no its costing a lot of money that could be better spent
    and an awful amount of needless unrest and friction just so Alex Salmond can get his statue next to Robbie Burns

  6. A book seller did phone into BBC Scotland this morning to ask John Swinney about the impact on eCommerce marketplaces. The clip is probably online somewhere.

  7. It’s undoubtedly a difficult question, specially for me not being either British neither Scot citizen but looking at business perspective it is something interesting to see and think about of what it can happen about the position voters will take if goes yes.
    As Chris Dawson placed in this article is just like a marriage separation and as all separation it can be messy.

  8. I just wanted to make a couple of points on the issue:

    1 – I run a fairly large mail order business (over 1 million a year) from Glasgow and I welcome Independence with open arms, I’m not worried about it affecting my business as I’ve spent close to a year analysing every side of the argument and am fully conversant with the ups and downs, something that the majority of the people leaving comments here cannot say for themselves judging by what’s been said

    2 – Although there are a VERY small minority of Nationalists who are anti-English, this is not about the people of England, it’s about the government of Westminster – thats what we are trying to get away from. If you want to talk about money well spent (or wasted), how about cancelling the Trident replacement and saving us 100 Billion that could go to taking down a portion of that Structural Deficit that George Osborne has stubbornly failed to reduce?

  9. Independence? Stupid idea. Scotland takes billions from England each year, so can they actually be self sufficiant? If so why have we been subsidising them for so long? For a nation of “financially astute tightwads” it does seem odd that they require southern subsidy – or maybe its simply been a case of “if its free, take it all”.

    Passports? Never mind them requiring ID on entry, what about England protecting itself against an influx of economic migrants that will surely happen after Scotland can’t balance its books and falls into financial decline and recession. We will probably need a BIG fence!

    Postage? Royal mail will treat Scotland as Airmail and couriers will consider it overseas like Europe. Massive price increases will ensue. But this probably won’t matter much once the country economically self destructs as there will be few orders anyway.

    Happy days ahead! 🙂

  10. “Differences create opportunity”

    I am unclear as to what opportunities will be created if this comes into effect?

  11. A Friday fact that hit my inbox this morning:

    If Scotland votes ‘yes’ next week, the UK’s average annual rainfall will go down by 20cm

    Lee

  12. I’m Scottish, live in England. So I can’t vote which is good because I would be torn, make no mistake this is no easy decision for your average Scot.

    IMHO, Alex Salmond cannot lose.

    If the vote is Yes he gets an independent Scotland.

    If the vote is No he gets more devolved power from Westminster.

    He might not be the most likeable guy in the world but stupid he aint.

  13. if scotland votes yes royal mail is going to jump on the chance to stop the universal delivery service unless it receives a hefty subsidy from the Scottish government

  14. What a great opportunity for us to rebuild Hadrians Wall with a manned gatepost and toll road into England

  15. Who owns the oil? The Scots seem to think they own it? The companies who take the gamble and have the exploration, drilling and extraction rights seem to think they own it? Is a future Scottish government going to use Scottish taxpayers money to set up a publically owned Scottish oil company? Are they planning to nationalise all existing oil assets within Scottish borders owned by private companies? Who pays?

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