What happens to ecommerce if Scotland leaves the UK?

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.