As the Scots head to the polls for a decision with wide-ranging ramifications, our UK MD, Michael Adams looks at the practical business decisions and steps that may be needed in the event of a vote in favour of Scottish independence.
Much has been written and said in recent months about the effect Scottish independence may or may not have on the UK economy.
Whether it is banks moving their registered offices out of Scotland, retailers threatening higher prices if the cost of doing business increases, or public figures making their views known (Richard Branson backed the No vote last week while backing further devolution, adding that "keeping the status quo is no longer an option"), the Scottish referendum is already making its mark on UK financial markets.
Indeed, the BBC reported on 8 September that of the 11 fastest fallers in the FTSE 100 that day, five were based in Scotland – Standard Life, RBS, Lloyds, SSE and Weir Group. The top faller that day, Babcock, has major defence interests in Scotland, as does BAE Systems, which was the 10th fastest faller.
There was also a letter published in August and signed by 133 businesses with interests around the globe claiming that the uncertainty of a Yes vote is "bad for business".
Now may not be the time to express an opinion or take sides, as decisions have probably already been made.
The question is, what happens if tomorrow Scotland announces that it will become an independent country?
Practicalities of the Yes vote
Tomorrow morning, investors and business leaders around the world will need to consider their options. If the vote is for Yes, there will be around 18 months of uncertainty while the logistics are sorted out. That gives UK businesses some time to decide their fate.
The currency debate is the key here: businesses need to know which currency they will be conducting their main transactions in to allow for forecasting. Equally, financial regulation needs continuity too, which currently the Bank of England provides. Without continuity of currency and regulation, access to credit comes into question.
There are other questions: what will the corporate tax rate be in Scotland? Will there be a VAT? How about insurance? (Certainly, Aviva has recently raised concerns about the insurance market in an independent Scotland.) What accounting standards will reporting be held to? And, of course, what of a timetable for Scottish EU membership?
If businesses decide that the uncertainty is too much, and incorporation in Scotland is not worth the risk, the obvious next domicile is England. Just over the border, England offers an established and stable economy which is growing in both size and confidence. It's the perfect gateway to Europe, has an attractive corporate tax rate, a good quality of life and a world leading talent base.
London's status as an international financial centre is rivalled by few (could Edinburgh compete?). Moreover, English law is an international standard and there are mature and operationally efficient processes for companies setting up in the UK.
Only one thing is certain in the event of a Yes vote: the UK's lawyers and accountants would be very busy indeed.
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