Local Income Tax (Collection Costs)

Question Time — Scottish Executive — General Questions – in the Scottish Parliament at 11:39 am on 2 October 2008.

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Photo of Wendy Alexander Wendy Alexander Labour 11:39, 2 October 2008

To ask the Scottish Executive what the estimated cost to business is of the collection of a local income tax that is set and levied by 32 individual local authorities. (S3O-4427)

Photo of John Swinney John Swinney Scottish National Party

It is clear that the estimated cost to business of collecting a local income tax will be greater if it is set and levied locally by individual local authorities than if it is collected, set and levied nationally. The Burt committee estimated that the difference would be around £10 million per annum. That is why we had proposed that the tax should be collected by Her Majesty's Revenue and Customs using the existing income tax system.

Photo of Wendy Alexander Wendy Alexander Labour

I was encouraged that, in this morning's debate on local income tax, the cabinet secretary promised to answer detailed questions on how that tax will work in his forthcoming response to the consultation responses. At this time of unprecedented economic turmoil, will his commitment extend to providing Scottish businesses with any estimates of what his proposed new local income tax might cost them?

Photo of John Swinney John Swinney Scottish National Party

Hundreds of thousands of small businesses the length and breadth of Scotland are grateful for the fact that, after securing parliamentary support for its budget in February this year, the Government has significantly reduced their business rates. Perhaps Wendy Alexander and her colleagues should explain why they were pathologically opposed to giving business that competitive advantage. In the current economic climate, we see the value of the changes that the Government made. That is felt throughout the business community in Scotland.

As I pledged this morning, we are engaged in responding to detailed questions on the local income tax. I am delighted that the Labour Party and the Conservatives have stopped opposing the tax in principle and are now engaged in the detail of its introduction. I am sure that the people of Scotland welcome such a tremendous conversion to such a good idea.