Yesterday saw John Swinney, Scotland’s Finance Secretary, give his first Spending Review (for Spending Review think Budget) of the first term of the new Scottish Parliament. John Swinney made a number of tax related announcements.
The announcement that made most of the headlines was the proposal for a new public health levy. A choice of words to be followed depending it seems on whether you agree with the proposal. This proposal is similar to the proposal in the last Scottish Parliament that was dubbed “tesco tax”. That proposal failed as the then Scottish Government did not have a majority. That is of course not an issue for the present Scottish Government. The levy will be a business rates supplement paid by large retailers of both tobacco and alcohol from April 2012.
Although not given as much publicity as the above levy, Mr Swinney also confirmed funding for the freezing of the Council Tax for the next 5 years. It will be interesting to see how Scotland’s local authorities react to this policy in the months leading up to next May’s local elections.
A proposal that has received less attention, but nonetheless and in its own way may be just as important as the other proposals, is the commitment to introduce legislation to reform “empty property relief” from April 2013. The aim is to support regeneration and introduce incentives to reduce empty shops in town centres.
The top rate of income tax debate continues with the first sign that the Liberal Democrats are not at one on this issue. David Laws, former Chief Secretary to the UK Treasury albeit a short lived one, said that he saw the 50p top rate as a temporary measure. That is the position being taken by most Conservatives on this issue.
Some good news for those proposing a fuel duty discount. On Wednesday the UK Government said that the European Commission had agreed that rates of taxation on petrol and diesel could be reduced as proposed. The scheme will cover the Inner and Outer Hebrides, the Northern Isles, islands in the Clyde and the Isles of Scilly. No date has yet been set for the commencement of this scheme. An interesting story from the BBC on reaction to this announcement can be found here.
I read with great interest of how the ex-boss of Marks and Spencer Sir Stuart Rose has said in an interview that he would be prepared to pay more than the current top rate of tax. This follows similar statements by business leaders in other countries including France, Italy and the USA and including billionaire investor Warren Buffett. Indeed a proposal by President Obama to increase taxes on America’s wealthiest have been dubbed the “Buffet Rule”. I wonder how many others will follow the position taken by Sir Stuart Rose.
