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Council tax reform gathers steam in Scotland

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9th Jul 2015
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The Commission on Local Tax Reform, set up by the Scottish government this year tasked with examining alternatives to council tax, is on schedule to produce its report in Autumn.

Since beginning in May, the commission has heard a variety of testimonies, ranging from the Scottish Association of Landlords to Charlotte Barbour of ICAS. In her testimony to the commission, Barbour presented ICAS’s position that a review of local taxation should form part of a more holistic exercise that considers the wider context of strategic change, local government funding and tax to give a clearer perspective of current and projected priorities, needs and challenges.

As in England, the valuation bands which determine the amount of council tax paid are the big source of consternation in Scotland. “Council tax is based on valuation bands that were put in place in 1991,” Barbour explained to AccountingWEB. “Many people have questioned whether it’s fair that you’re valuation band has been set in stone since 1991”.

Stuart Adam of the Institute for Fiscal Studies labelled the situation “patently absurd”. “Bringing property valuations up to date need not imply higher taxes on average,” wrote Adam. “Council tax rates and thresholds could be set to yield the same average household bill and therefore the same revenue, as if there were no revaluation”. Broadly speaking, properties whose value has increased more than the average since 1991 will pay more. “This is as it should be,” counters Adam.

Previous Scottish tax reform around stamp duty, to make it more akin to income tax, spurred George Osborne to do the same in England and Wales – albeit only for residential properties. “If Scotland is very brave and manages to think up a very good council tax system (and it works), the chances are better than even that rest of the UK will adopt it,” explained Rebecca Cave.

And reform in Scotland does look likely. The mood seems to be that as it is now, the system is unfair. “Indeed it is probably the only current tax that is deliberately regressive in its design,” said Adam.

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By carnmores
11th Jul 2015 16:54

bring back the community charge

and band it 

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Sarah Douglas - HouseTree Business Ltd
By sarah douglas
12th Jul 2015 14:35

It should not matter what your property is

Tax it through the PAYE system and be done with or set a charge for everyone.  I don,t see why you should pay more because of your house.   I have friends who chose to and who are on similar income invest in their property.   We chose to spend our money on holidays and not on our house, why should they pay more.

 I am not sure I am that interested in ICAS view anyway,  They are only interested in their own business circle in Scotland.

 

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