Law firms react as Scotland votes 'no' to independence
Leading law firms have urged clients to be wary of future tax and property law changes after Scotland voted decisively against independence this morning.
September 19, 2014 at 07:04 AM
3 minute read
Leading law firms have urged clients to be wary of future tax and property law changes after Scotland voted decisively against independence this morning.
Scotland elected to stay part of the United Kingdom by a margin of 55% to 45%, but has been promised more devolved powers by Westminster, including more control over tax, spending and welfare.
"Independence would have thrust us into an unprecedented era of tax complexity, with companies that operate cross-border finding themselves effectively split in two." Dan Neidle, tax partner at Clifford Chance, said.
"We have dodged huge expense and uncertainty for businesses, and a vast distraction for HMRC – a rare event that's good news for taxman and taxpayers alike."
In the event of a 'yes' vote, Scotland would likely have altered its tax system significantly and in a short space of time, but with today's result falling to the 'no' camp, a more gradual ceding of powers is expected.
New powers to the Scottish Parliament are set to be announced in November, with January set as a date for draft legislation.
Penelope Warne, senior partner at CMS, which sealed a merger deal with Scotland's Dundas last year said: "I am absolutely sure there will be new regulation as a result of this. Because I'm so familiar with our Scottish business I was absolutely sure that whatever happened we were going to be extremely busy helping our clients."
"[But] it's not the same as if we had had the yes vote. We would have been into the most enormous amount of regulation that needed to be changed, new regulation on top of that too, in every conceivable area….We would have instantly had to do a lot of hand holding to navigate clients through it."
Firms remain optimistic, however, that Scotland's legal sector will stay buoyant, or even attract greater investment, on the back of today's 'no' vote.
"We are confident inbound work will continue," says Kirk Murdoch, Scotland and Northern Ireland chairman at Pinsent Masons. "The Scottish legal market has picked up primarily because there was an economic recovery on the way. Now we have certainty on the independence issue I don't see any impediment to that."
"There are still structural things to bear in mind in the market; clients with an attitude of 'more for less', panels cutting their rosters. We will be watching and waiting, but we remain confident that Scotland remains entirely relevant for us."
For firms and lawyers advising individuals, there are likely to be additional uncertainties around changes to tax and property legislation.
"Whilst we should be glad that the immense potential upheaval of Scottish independence has been averted, individuals with assets in Scotland would be well advised to keep a close watch on changes to property and tax rules," said Withers private client partner Chris Groves.
"We expect that the Scottish authorities will seek to introduce a mansion tax of some sort and also secure more direct powers over properties. Scotland is also likely to keep pursuing an agenda against landowners and sporting estates, and we expect that further legislation on this will be forthcoming."
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