Daily Bulletin

Men's Weekly

.

  • Written by The Conversation
imagebiketrouble/Flickr, CC BY-NC-SA

When the council tax was first introduced in 1993, it was viewed as a politically clever fix after the catastrophe of the poll tax. It combined the palatable parts of a tax on property with personal discounts and limited exemptions for certain groups, such as students. Unlike the poll tax, there was a comprehensive system which ensured that low income households qualifying for social security could receive 100% rebates.

Council tax – along with business rates, grant support, fees and charges, and the occasional dip into reserves – pays for the total current spending of local councils across the UK. This mainly covers exhaustive spending like wages, the costs of delivering a range of local services and council administration.

But any credible property tax requires regular revaluation to reflect the changes in property values, whereas council tax across the UK (apart from Wales) is based on property values from 1991. As such, it is at serious risk of falling into disrepute and is essentially disconnected from current house prices.

What went wrong?

To understand where it all went wrong, we need to look at how council tax works. Essentially, properties are allocated to a band from A to H, based on their value (that is, their value in 1991). In each council area, band A properties have the lowest value (and therefore the lowest tax bill), while band H properties have the highest value (and the highest council tax liability).

But properties are not evenly distributed across the bands – rather, they are disproportionately found in the lower bands. The benchmark band D tax rate is set by each local government, with every other band a fixed proportion of D. Residents of the lowest value properties pay two thirds of the band D rate, while the band H rate is twice as much (even though property values in band H will be at least eight times as much as band A).

Already, we can see a problem: this is an arbitrary weighting, which directly benefits the residents of higher value properties, who will pay a lower proportion of the property’s value than those in cheaper properties. There is also evidence that people living in regions with relatively expensive house prices pay lower average council tax, compared with those in cheaper regions.

Cuts and freezes

Another issue is that governments across the UK have imposed freezes on council tax rates, meaning that local authorities are no longer at liberty to set the band D rate. In Scotland, the freeze is now entering its eighth year. The coalition government also implemented a freeze, and the new conservative government is looking to do the same. The freeze in Scotland has cumulatively cost the Scottish Parliament more than £2.5 billion so far.

imageThe big freeze.bambe1964/Flickr, CC BY-NC

In 2013, the coalition government also cut its funding for council tax rebates by 10%, and devolved control over the rebates to local authorities. This created a patchwork of local schemes, wherein only 20% of authorities found the funds to maintain previous levels of support. Scotland chose to pay for the cut out of its national budget (known as the Block programme), and essentially retained the previous system.

Which fix?

In view of these issues, it is clear that the council tax needs to be reformed. But how? The Scottish government has launched a broad based Commission on Local Tax Reform to consider the options for council funding. Here are some of the ideas that might come up.

Oxford professor John Muellbauer has proposed a package that would reform council tax, and includes exempting the first £40,000 of property value, a general revaluation, adding a new high-value band. Muellbauer’s solution would also offer a deferred payment system, for those who are asset-rich but cash-poor. This is effectively a form of equity sharing with government, so that if you cannot or choose not to pay annually, the government builds up a claim, which is realised on the sale of the property.

Then there’s Northern Ireland’s “rates” system: a tax on assessed properties' capital values. Like the council tax, this has a rebate system, but it also allows for deferred payment. A different, more radical approach would be a land value tax – which is based on the value of the land only, rather than the property that stands on it. This approach is widely favoured by economists, because it would have no impact on development decisions and would widen the tax base.

Previously, the SNP government favoured a local income tax. Generally viewed as a fair and progressive approach, the Burt Review suggested that a revenue-neutral local income tax might need to be between 5.7% to 7.9% on top of existing income tax rates. Many worry that such additional income tax could lead to fiscal flight to places with lower tax rates. The income tax proposal would be a tough sell – but then, so is a property tax.

My own preference would be multiple taxes raising the same total revenue. Most countries widen their tax base and spread risk by using more than one local tax. The UK could well use some form of revenue-neutral property or land tax, supplemented with a modest income tax. This would need to be phased in and buttressed by regular revaluation, transitional support for those who lose out, and a serious commitment to communicating the reform proposals. But whatever tax option is chosen, that system must end the freezing of tax rates.

Kenneth Gibb carried out an independent evidence review for the Commission on Local Tax Reform and is a member of Scottish PropertyTax Reform.

Authors: The Conversation

Read more http://theconversation.com/council-tax-reform-is-long-overdue-so-how-do-we-do-it-45534

Business News

Robot Trading and Automation: Does Automated Trading Really Work?

In today’s fast-moving financial markets, many new and experienced traders wonder whether automated trading systems — often called trading robots, expert advisors (EAs), or algorithmic bots — can real...

Daily Bulletin - avatar Daily Bulletin

Physical retail roars back: Christmas 2025 expected to be the biggest in years

Physical retail is back and it’s booming. Shopping centres across Australia are preparing for one of the biggest Christmas and Boxing Day sale seasons on record, driven by strong consumer confidence...

Daily Bulletin - avatar Daily Bulletin

Groundbreaking investment positions Agile Energy to slash power costs for Australian businesses and accelerate Australia’s rise as a green economic powerhouse

Agile Energy is now positioned to play a defining role in reducing energy costs for Australian businesses and fast-tracking the nation’s transformation into a globally competitive green economic pow...

Daily Bulletin - avatar Daily Bulletin

Speed Dating For Business
hacklink hack forum hacklink film izle hacklink หวยออนไลน์jojobetสล็อตเว็บตรงgamdom girişpadişahbetMostbetpradabetkavbetcarros usadospin updizipalStreameastholiganbettrendbetcocktail glassessetrabetjojobetDeneme Bonusu Veren Sitelerpusulabet girişbetnanotürk ifşaBets10jojobetjojobetjojobetholiganbet色情casibomnakitbahisholiganbetPusulabet girişpusulabet girişholiganbet girişyakabet1xbet girişjojobetgrandpashabetbetofficeenjoybetpradabetkingroyalholiganbetgiftcardmall/mygiftcasibomholiganbetfixbetbets10paribahismeritkingcasibommeritkingcasibomcasibommeritkingcasibom girişJojobettrgoalsselcuksportsPorno İzlecasibom girişkolaybetTaraftariumgalabetcasibomcasibom girişjokerbetjokerbetyakabetCasibombetpuantaraftarium24artemisbet girişdinamobetbetnanovdcasinoSekabet girişmarsbahisbetkolikultrabetprimebahisselçuksportsprimebahistaraftarium24betcioyakabetyakabetyakabetjojobetkulisbetbetnanoSahabetaertyercasibomcolor pickerkonya escortvbetcolor pickerkavbetkralbet girişmavibetmavibetmavibetmavibetcratosslot girişคลิปหลุดไทยCasibomCasibomholiganbetdeneme bonusu veren siteleronwinonwin girişkonya escortimajbetantalya escortjojobet girişjojobet girişmarsbahisbahsegeltimebetjojobetjojobetholiganbetbahiscasinojojobetbets10matbetcasibomRoyal Reelsroyal reelskolaybetKayseri Escortjojobet girişjojobetbetasus girişNişantaşı EscortelexbetelexbetbettiltStreameastcasibom güncel girişKalebetpadişahbetfixbetaviator gamesetrabettimebettimebettimebetbahisoistanbul escort telegramcasibombetparkcasibomcrown155hb88super96betsmovecasibomstreameast한국야동av한글자막jojobet girişสล็อตpornopadişahbetBetigmabetparkBetigmaBetlora girişgiftcardmall/mygiftgaziantep escortspin2uneoaus96padişahbetholiganbetmarsbahisjojobetcasibombets10ffpokiesjojobetbest australia online casino 2026best payid casino australiaholiganbetjojobetdeneme bonusu veren siteler rehnerixslotmostbetdaftar situs judi slot gacor hb88 indonesiaJojobet 1112mostbetmostbetkingroyalorisbetbahis siteleri 2025matadorbetMalware downloadcasinowon girişmatbetjojobetwww.giftcardmall.com/mygiftmarsbahisgrandpashabetcasibomcasibomgiftcardmall/mygiftasdsadasdasdasdasfdasfasfsadfasdfsdfasdasdasdasdkingroyal girişjojobetbahiscasinobetasus girişpin up uzbekistanSlot Heart Casinocasinomedklarna.seholiganbetcasibomwww.mcgift.giftcardmall.com balancewww.mcgift.giftcardmall.com balancegiftcardmall/mygiftwww.giftcardmall.com/mygift activatetm menards loginsweet bonanzabetasusparibahisjojobetstake payid casino australiabest payid casino in australiajojobetcanlı maç izleklasbahishttps://vozolturkiyedistributoru.com/casibomcasibomcratosroyalbetci girişjojobet girişcasibomwolf winnerWolf Winnercasibomdeneme bonusu veren sitelerjokerbetjojobetjojobetrokubetmeritkingssitus slot gacorJojobetjojobetcasibom