Local income tax

Local income tax

The Scottish Government plans to bring forward legislation to replace the council tax with a local income tax (LIT), as part of the funding for Scottish local authorities. [ [http://news.scotsman.com/politics.cfm?id=1312852007 Local income tax on way as early as 2010] , "The Scotsman", 19 August 2007]

Different proposals to abolish council tax formed part of the manifestos of the Scottish National Party and the Liberal Democrats during the Scottish Parliament general election of May 2007. The SNP version involves the centralised distribution of funds raised from the new tax throughout the Scottish local authorities whereas the Liberal Democrat's proposal devolves the distribution to individual authorities. The newly-reconvened Scottish Parliament narrowly backed the principle of some form of local income tax in June 2007 but left questions unanswered as to how the two proposals could be practically reconciled. Independent MSP Margo MacDonald also backs the proposal of a local income tax in principle, and her support could be important in a tight vote.

Des Browne, the Labour Secretary of State for Scotland, has said that the UK government is likely to withhold £400 million in Council Tax Benefit if the Scottish government implements the legislation. [ [http://news.scotsman.com/politics.cfm?id=1315612007 Scrapping council tax has £400m price tag - Browne] , "The Scotsman", 20 August 2007]

Timetable

A bill will be brought before parliament in 2008, with the aim of enacting the legislation by the summer of 2009, and changing over to the new system of local taxation by April 2010.

Previous proposals

A Scottish Service Tax was proposed as a replacement for the council tax by the Scottish Socialist Party, however the SSP lost all of its MSPs at the 2007 general election.

References

ee also

*Business rates in Scotland
*Tartan tax
*Taxation in the United Kingdom
*Income tax
*Local taxation
*Council Tax
*Land Value Tax


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