The “No” side received 2,001,926 votes against 1,617,989 for the “Yes” side in Thursday’s referendum, meaning Scotland will remain part of the United Kingdom but will be granted a host of new devolved legislative powers.
While exact details of the devolved powers will not be published until October, tax partner at Withers, Chris Groves, said they are likely to include increased controls over taxation.
“There was a lot of talk about things happening on a large scale throughout the campaign,” he said. “This has definitely created a sense that people at the high end will be subjected to additional taxes and higher tax rates.”
He said that the land transaction tax, which has been proposed as a replacement for UK stamp duty in Scotland, was just one taxation likely to affect the wealthy: “While it is still subject to consultation, there are talks of a top tax band of £250,000 on property, with anything over this incurring a 9.5% tax.”
Lack of forthcoming
He added that, “on a lighter level”, the country’s wealthy are likely to see a host of measures that will affect them, despite a lack of “forthcoming” from the main political parties.
“I do not think that it would be that different regardless of the outcome; whether it was an increased devolution or complete independence, higher rate taxpayers have been left in a vulnerable position,” he added.
Thus far, the UK’s three main political parties have each outlined plans for Scotland’s new devolved tax powers.
Labour has said it will give Holyrood the power to vary income tax by 15p in the pound, the Conservatives have proposed to give Scotland complete control over income tax rates and bands, while the Liberal Democrats have pledged to give Scotland power over income tax, inheritance and capital gains tax.
Following the results of the referendum, Scotland’s first minister Alex Salmond, who led the independence campaign, urged the unionist parties to deliver on more devolved powers.
UK prime minister David Cameron said he was “delighted” that the Union will remain intact, and assured Scotland that its increased devolved powers will be honoured.
Tax specialist at leading law firm Thomas Eggar, Andrew Watters, said that, while the referendum saw a 55% vote against breaking up the UK, it also revealed a “100% no to maintaining the status quo”.
“A fairer society”
He added that tax policy will be central to Scotland’s future, asking whether tax should be low to encourage investment and grow wealth, or high to maximise distribution and create ‘a fairer society’.
“Would people be content to pay more tax if the state can guarantee certainty? How does this fit with the current debate on when acceptable tax planning drifts into unacceptable tax avoidance? Is the provision of tax incentives incompatible with a fair society?”
Guy Ellison, head of equities at Investec Wealth and Investment, said the general relief resulting from the “No” vote’s victory has been “tempered” by a lack of clarity on the real consequences of further devolution of powers to all UK regions.
“For now however, it is business as usual, and from an economic backdrop the outlook for the UK is relatively strong,” he added.
