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Unravelling the UK tax system

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The survey results suggest the Scottish business community welcomes the corporate tax debate, and the wider issue of how to make Scotland a better place to build economic prosperity. However, there is also discussion around the cost, and how many benefits will be eroded by cost and administrative burdens.

Such concerns reflect the difficulty in unpicking 300 years of integration. Many of the UK’s businesses are run on a highly integrated basis, with no differentiation between a customer in the Western Isles or one in Kent. The cost of a business administratively pulling itself apart – or at least being able to report results as if it had – could be enormous in terms of systems, management time, reconfiguring distribution systems, and regulatory environment.

Evidence that the independence debate has created uncertainty can be seen in the recent statements by Scottish & Southern Energy, Scotland's second biggest company, which warned that uncertainty over the independence referendum will increase the risk it attaches to investment projects.

It is likely some of this has affected thinking on the cost to business of dealing with an independent tax system for Scotland.