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Proposals Put Forward To Replace Scottish Council Tax

by Robert Lee, Tax-News.com, London

16 December 2015


The cross-party Commission on Local Tax Reform has called for the abolition of the current Scottish council tax system and its replacement with a fairer, more progressive, and "locally empowering" regime.

The Commission was established jointly by the Scottish Government and Convention of Scottish Local Authorities. It was tasked with identifying and examining alternatives that could deliver a fairer system of local taxation. It examined three alternative tax systems – a tax on property, a tax n land, and a tax on income – and the impact each would have on the financial accountability of local government. The Commission did not however advocate any single alternative to the present council tax system. Council tax is paid by each household on a monthly basis.

The Commission concluded that existing council tax arrangements disregard a taxpayer's ability to pay. It also found that the council tax reduction system is highly complicated, does not provide sufficient support for those on low incomes, and has a low take-up rate.

The Commission said that any new system should "minimize the need for complex relief schemes for individuals or households." The Commission stressed that any reform of local tax "has to include recurrent tax on domestic property," and that the new system would need to be more progressive than council tax.

The Commission said that it expects its report to inform the development of policies that will be put to the electorate in the Scottish parliamentary election in May 2016. It added that legislation to establish a wholly new system of local tax could not be delivered before the 2017 local government elections, and that a transitional framework would be desirable.

TAGS: individuals | tax | property tax | government committee | United Kingdom | legislation | services | Scotland

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