Scottish LIT doomed to fail

The most damaging criticism yet of the Scottish government’s plans to replace
the council tax with a local income tax (LIT) has come from a report released by
the Chartered Institute of
Public Finance and Accountancy
(CIPFA) and
Society of Local Authority
Chief Executives

Their report says the figures do not add up and warns that, besides a funding
shortfall there are questions over the policy’s legality. Removing local control
over taxation, they warn, could ‘compromise’ the existing agreement between
councils and government on spending and be in breach of European legislation,
The Times reports.

They urge ministers to extend the four-month consultation on LIT, which
officially closed on Friday and recommend a fairer council tax with more bands,
possibly supplemented by a limited LIT.

Moreover, Bob Ainsworth, the UK armed forces minister, last night said LIT
would punish about 5000 service personnel in Scotland whose council tax was
largely paid by the Ministry of Defence.

Further reading:

Law expert warns MSPs of ‘poll tax’ scenario

Darling attacks SNP’s local income tax plan

The Times story

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