Resellers fear the sting in Scottish tax-raising tale

The Scottish industry is bracing itself for a rise in costs following last week?s decision by voters to back a separate parliament with tax-raising powers.

The ?Yes Yes? vote set the scene for Scotland to be given the responsibility for generating much of its own finances.

But if the Scots legislature decided to increase the rate of direct or indirect taxation, it would create a twofold problem for the UK reseller community.

In the event of an increase in the rate of Scottish corporation tax, dealers could find firms based north of the border becoming reluctant to invest in IT. Some could even choose to relocate to England if such increases were too high.

Much of the big business in Scotland is based on banking and finance, and some companies in this sector are already reportedly looking to base themselves in London.

The question of cross-border trading and VAT would also prove a sticking point. Harry Thuillier, chairman of Fraser Associates, said: ?If overseas companies are VAT registered we don?t charge them VAT ? it?s up to the company concerned to declare what they should have been charged at their local rate. If the Scottish parliament was able to change its rate of VAT, it could potentially cause a lot of problems.?