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Accounting bodies come out in favour of Scottish council tax

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8th Sep 2008
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Alex Salmond’s struggle to scrap council tax has run into an unlikely enemy. The first minister of Scotland has been politicking to replace the council tax north of the border with an income-based alternative, deducted at source. A recent deal with the Liberal Democrats might see him sneak it through parliament, but ICAS and ACCA Scotland have different ideas.

The Association has issued a document heavily critical of the proposals, highlighting that removal of the tax will most likely see a significant funding gap and bottlenecks in collection. Other drawbacks include an increased regulatory burden on business, and a migration of the workforce as employees dodged the replacement tax by simply working outside the catchment area. The report says Salmond’s collection criteria lack “robustness” and the resulting complexity and uncertainty will result in a low level of compliance.

“The concerns highlighted in the many responses to the Scottish Government’s consultation in the summer still need to be addressed before we can have confidence that this will be a fair tax that will benefit Scotland,” said Andrew Leck, head of ACCA Scotland. “We believe that the proposal will place significant burdens on employers and may not raise the revenue currently raised by the Council Tax.”

The ICAS was even more damning, describing the Holyrood plan as unworkable. As well as complaining about the added burden on business it raised doubts over the ability of HMRC to collect the tax and suggested the measure would raise cross-border tensions. Also, the better-off, who may have second residences outside Scotland, could easily avoid the tax, the Institute said.

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