Friday, August 08, 2008

Local Income Tax May be Coming to a Council Near You

Well the SNP are talking of maneuvering on their position on Local Income Tax after objections from Westminster that setting the rate centrally may well be illegal. They are to open discussions with the Lib Dems about moving the policy forward with the local authorities in Scotland setting the rate for their area rather than Holyrood.

All three Lib Dem leadership candidates have stated correctly that replacing the Council Tax with a fairer tax based on ability to pay is still party policy. So a real question for them at the hustings tomorrow will be in light of the SNP looking to negotiate will they enter negotiations in order to get one of our key election pledges from last year through? If we are truly looking to ensure a liberal democratic Scotland we must not be afraid of working with a party with a similar policy to our own (especially if it looked like it was lifted lock, stock and barrel originally with a few key elements changed) and I would welcome any move to get this through.

One worrying sign of the SNPs willingness to move to get this through against and antagonistic Labour controlled Westminster is there still is some assertion to maintain a national rate for at least a couple of years.
"The source added that ministers might be prepared to accept a locally-set tax
after the national tax has been allowed to "bed in" for a few years.accept a
locally-set tax after the national tax has been allowed to "bed in" for a few
years."

Be done with that if Labour in London are objecting to that remove the obstacle. Also I notice that Colin Borland, from the Federation of Small Businesses in Scotland, is making the most non-sensical argument against LIT as opposed to council tax:
"The big fear is over the cost of bureaucracy. It will be bad enough with one
rate for the entire country, but there could be 32 different rates.

"If you have a business in Glasgow you could have three employees, one from
Glasgow, one from Renfrewshire and one from East Renfrewshire. That's three
different sets of paperwork."

Well for starters there are currently 8 council tax bands per Authority so that is 256 rates across the entire country. Also as far as employees wage packets are concerned I've had all sorts of additional extras taken out (sports association membership, union fees etc) of my pay, or overtime added on at an individual level through the years, different month on month. Most employees will only have to set up the LIT payments at the start of the tax year when the new rates are announced and only adjust should the employee stay employed but move council area. Hardly the most strenuous additional amount of over time for any employer in a small business or payroll officer in a larger concern. Sounds like just an excuse for the sake of keeping up making excuses as the tide shifts and not very well thought through.

Of course there are concerns that Vince Cable may make LIT a policy of the past at federal level for the Lib Dems. However, our MSPs and MPs are all currently elected seeking to implement LIT and if a change cmae to implement it our MSPs should jump at it and get rid of the unfair Council Tax system we have at present.

So locally set rates for a Local Income Tax may well be coming to a local authority near you (apologies to Welsh and English readers of this blog) soon. I for one hope discussion is entered into and both parties can get this sorted out and passed into law.

2 comments:

Rab o'Ruglen said...

I agree with you that the SNP and the Lib/Dems should get together and whack out a solution to the LIT imapsse. There seems to be so relatively little difference between them on the issue I don't see the problem.

The issues with Westminster still might not go away though but could perhaps be resolved if a more united front from the SP was presented.

It always seemed to me that the real (if unspoken) reason for the Tory's objection to the "rates" was that it was the only tax that they could not find a way of creatively accounting their way out of.

Along the same lines, if a cast iron commitment was to be given that "unearned income" would not be included (as seems to be the case currently for administrative reasons) you might even get them on board too.

What a thought!

Poly Muthumbi said...

No oneINCOME TAX can afford to be cheated into income tax frauds, because serious consequences will be awaiting them on the other end.

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