Setback for Scotland’s local income tax

Alex Salmond’s plans for a local income tax in Scotland has suffered a severe
setback after Yvette Cooper, chief secretary to the
Treasury, issued an
unprecedented formal warning of a £750m black hole in the
‘s plans.

The chief secretary has written to John Swinney, Scotland’s finance
secretary, stating Treasury officials believe there is a £750m gap between what
is raised now by council tax and what would be raised by the local income tax,
The Scotsman reports.

‘Although you don’t say what you expect a local income tax of 3p to raise, I
understand that it is around £1.35bn, which compares to around £2.1bn currently
raised by council tax, and that makes an annual shortfall in the region of
£750m,’ Cooper states. ‘This loss would have a serious impact on local council
services across Scotland.”

Cooper is scheduled to meet Swinney in London today.

Further reading:

SNP courts Lib Dems in bid to secure local tax

Salmond says don’t withhold our money

story in The Scotsman

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