Tag: taxation

New law will prevent pursuit of hated tax

The Scottish Government plans a new law to stop councils pursuing people for historic Poll Tax debts, First Minister Alex Salmond has confirmed – but the First Minister’s unexpected announcement has not been met with universal joy … 

The Community Charge, to give it’s official name,was a system of taxation introduced to replace rates, using a head count instead of property values to calculate how much taxpayers should pay. The controversial tax was introduced in Scotland in 1989 – a year prior to its introduction in England and Wales – but was widely discredited, caused mass public protests and was finally abolished after only four years in 1993.

The Scottish Government’s move comes amid calls that the electoral register – currently at record levels because of the unprecedented engagement with the democratic process through last month’s referendum – should not be used to identify and pursue Poll Tax arrears.

Legislation will be introduced in the Scottish Government’s forthcoming legislation programme that will mean councils will no longer have the ability to collect Poll Tax arrears, but will be compensated for outstanding amounts in line with current collection rates.

The move comes as the collection rate for outstanding arrears has fallen steadily, to the point that it totalled less than £400,000 in Scotland last year.

Mr Salmond said yesterday: “The Poll Tax was a hated levy, which poured untold misery on communities across Scotland. It was a hugely discredited tax, even before it was brought in – and it was rightly consigned to history just four years after its introduction in Scotland.

“It is therefore not appropriate for councils to use current electoral records to chase arrears from decades ago. The electoral register should not be used to collect debts from a defunct tax – something which is even more important given the unprecedentedly high levels of democratic engagement we have seen recently.

“The amount of Poll Tax arrears which have been collected by councils across Scotland has fallen to near negligible levels in recent years, from around £1.3 million in 2009-10 to less than £400,000 in the most recent financial year.

“We will ensure that local authorities are properly compensated in line with current collection rates in respect of outstanding amounts and ensure that they are not out of pocket.

“It is, of course, quite proper for councils to use current information to assess current Council Tax liability. Unlike the long dead, discredited Poll Tax, the Council Tax is a live levy which forms a key part of local authorities’ finances.

“We have frozen the Council Tax since 2007 and our Council Tax Reduction scheme currently protects over 500,000 of our most vulnerable citizens from increased liabilities following the UK Government’s abolition of the Council Tax Benefit.

“This issue also highlights the need to seek the power from Westminster to control the electoral register, specifically to remove the ability of the register to be sold to private debt collectors.

“After 25 years it is high time that the Poll Tax is finally consigned to the dustbin of history.”

However unpopular the Poll Tax was, not everyone agrees with an ‘amnesty’ for non-payers. The Conservatives say the announcement is little more than a ‘Tax Dodger’s Charter’ and it’s fair to say that local authorites umbrella body COSLA is less than impressed.

COSLA President Councillor David O’Neill accused Mr Salmond of making ‘a very odd announcement’ in relation to the writing off of historical poll tax debt.

Councillor O’Neill said: “Whatever you think of the substantive issue, in my time as COSLA President this is one of the oddest decisions ever to have come out of the Scottish Government.

“Just look at the hard facts.  Up until two days ago the Policy of Local Government, fully backed up by Audit Scotland Reports and the Scottish Government, was crystal clear.  Scotland’s Councils were under a very strict obligation to collect every penny of outstanding debt owed to us.

Indeed, we have been told in the past that until we did this, we should not be asking for any additional money from Government.  In all of our negotiations with them, there has been a constant requirement from Government for Councils to get all collection rates on tax debt up to levels of the highest performing councils in Scotland.  The view being that if we did that we would go a long way to solving our financial difficulties.

“It seems very odd that now we have an improved tool at our disposal in the form of an expanded electoral register that may help us maximise collection rates, it is the self-same Government that tells us they are going to legislate immediately to prevent us from using it.

“There has been a complete absence of any consultation on this.  At the moment, the Scottish Government have no idea how many councils are making part or total use of the expanded electoral register, they don’t know how many individuals in the community would be affected by this, they don’t know whether these people now have the resources to pay the debt and they don’t know how much additional resource this might provide local government with.

‘Despite all that, they are rushing with obscene haste to new legislation.

“The one thing we do know is that from the government’s own figure it is around £425 million of public money which the government is intent on making it more difficult to collect.  It seems that that the Government saying that they are absolutely in favour of a policy only as long as there is absolutely no prospect of it being implemented.

“COSLA is very sensitive to the requirement to increase political engagement and electoral registration but everybody recognises that becoming involved in the political process demands responsibility as well as rights.  In COSLA’s view, you cannot have one without the other.  If that is not an accepted principle, we are very worried about the precedent that writing off this debt would create.”

A Tax dodgers charter?  Should Poll Tax debt be written off or should non-payers be pursued? Can we pick and choose what taxes we pay? Let us know!