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SNP consults on Stamp Duty reductions

13th Jun 2012
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Since John Swinney, the Scottish government’s finance secretary announced plans for a new tax collecting agency, Revenue Scotland and plans for separate Stamp Duty and landfill tax regimes have provoked furious debates north of the border. Gail Purvis reports.

A consultation document launched last week set out plans to raise the threshold at which 1% stamp duty land tax is applied from the current £125,000 to a figure as high as £180,000. There would also be a lower rate for properties costing less than £325,000.

Swinney said the reductions would benefits around 95% of the property market, equivalent to 66,500 residential sales a year.

Labour spokesman Ken Macintosh countered that the government’s “rushed announcement” failed to answer basic questions.

“The SNP tell us very little about how much tax they want Scots to pay but expound at length on why we need a separate tartan taxman,” Macintosh said.

But for all of Labour’s complaints, the proposals were welcomed by estate agents.

CBI Scotland director Iain McMillan said there was no reason why the tax should not be collected by Revenue Scotland if it resulted in lower costs. Colin Borland, of the Federation of Small Businesses, said it must not create additional paperwork for businesses.

Revenue Scotland will be set up this year and become  fully operational by 2015 to administer the Scottish versions of stamp duty and landfill tax devolved through the Scotland Act.  The new agency will “deliver a better system more in line with Scotlands needs”, the minister said.

Although Scotland will gain new income tax powers in 2016, this tax will continue to be collected by HMRC.

According to The Herald Swinney told MSPs the cost for HMRC to administer the new Scottish land and buildings transaction tax and landfill tax would be around £22.2m up to the end of March 2020. The new agency would be able to do so for just over £16.7m.

“It is a sign of the costliness of HMRC that we will both establish Revenue Scotland and implement and collect both of the replacement taxes for less than HMRC would charge us, to deliver what they term a like-for-like system with the UK,” Swinney said.

"I estimate that over the period to 2020, start-up and operational costs in pursuing this approach will be at least 25% lower than if I ask HMRC to deliver the status quo.”

HMRC’s warning that it could veto requests to collect the new landfill and property taxes if they differed too greatly from the UK system posed an added threat to the the Scottish parliament’s ability to take forward its tax responsibilities, he added.

The Registers of Scotland and the Scottish Environmental Protection Agency already have hands in property and land fill taxes, and will work with Revenue Scotland to collect the new charges.

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