The debate over a European financial transaction tax is gathering pace.  Let’s start with terminology.  The UK Government like to refer to this as a tax on London.  What they don’t understand, or maybe they do, is that this really annoys the European proposers of this tax.   Many European leaders and commentators blame London and New York for the banking crisis and cannot understand why the UK Government should be so protective of London.  I should add the continual reference to London also annoys me as Edinburgh is also a financial centre.  London is not the UK it is just part of the UK.

The UK Government say any such tax must be imposed world wide and not just confined to Europe.  The proposers point out that you have to start somewhere and if we wait for world wide agreement nothing will happen.  They also imply that this is what the UK Government secretly wants.  Do the European proposers understand the importance of London to the UK Government?  It seems not.  To complicate matters further Ireland has said that it will not introduce this tax if the UK does not.  I wonder what a fiscally autonomous or independent Scotland would do?

This debate cannot be separated from David Cameron’s newly found European scepticism.  I am sure the French will have laughed heartily when they heard David Cameron’s joke about a cheese tax!  I also suspect that commentators will soon catch on to the analogy between the UK Government’s desire for repatriation of powers from the European Union and the Scottish constitutional debate.  The analogy is an obvious one.

We also now know a bit more about the proposed tax:

• The European Commission says the tax would be levied at 0.1% on all transactions between financial institutions when at least one party is based in the EU
• Derivative contracts – bets on movements in currencies and other assets – would be taxed at 0.01%.
• The tax would be expected to raise about £50bn a year and would come into effect in 2014

Glad to see that the UK and Scottish governments have finally reached an agreement on allowing the Scottish Government to access its own fossil fuel levy funds.  This is a tax paid by suppliers of non-renewable energy sources.  The account holds approximately £206m.  Under the agreement, £103m will go towards Scottish renewable energy projects, including wave and tidal schemes.  The remaining £103m will be made available to support the capitalisation of the proposed Green Investment Bank.

Now to HMRC and its latest staff survey.   The conclusion is that its staff still have little faith in the abilities of their senior managers.   The latest staff survey showed only 13% felt changes were usually for the better; only 15% felt change was well managed; and only 17% had confidence in the decisions of senior managers.  Although these results were better than last year, 20% of staff still wanted to leave immediately or in the next year.  The 38,416 staff who responded represented a 52% response rate.  HMRC commented: “Since our last survey results there have been improvements that give rise to cautious optimism”.  The full story can be found here.

Every taxpayer may be given online access to their tax records.  This idea is part of a UK Government consultation on making the personal tax system easier to use and understand.  Other ideas include supplying pre-filled tax returns to people in the self-assessment system, using information from employers and banks, and sending each taxpayer an annual tax statement in addition to their normal P60 form and PAYE tax code notice.  Good to see a UK Government thinking about things from the point of view from the taxpayer.

Now to a claim from a Scottish accountant that HMRC is disproportionately targeting Scottish businesses.  HMRC said it would launch nine new task forces to investigate specific industry compliance in the 2011/12 year, seven of which are already running.

One for the first task forces to launch, targeting the restaurant trade, has so far launched investigations into 531 UK restaurants with 222 (42 per cent) of those in Scotland.  This compares with just 159 investigations for the whole of London and 150 in the North West of England.  The full story can be found here.

I will end with the Scotland Bill and whether it will become an Act.  What is interesting is how commentators have suddenly woken up to the fact of how much danger the Bill is in.  The Bill could be scuppered by either the Scottish or UK Governments.

One reason for this is the supposed supporters of this Bill seem unable to defend or even explain the contraversial income tax proposal.  As Malcolm Chisholm MSP pointed out last week at Holyrood’s Scotland Bill conference, the proposers of the Bill have failed to explain why the Bill is a positive move for either the Scottish Parliament or the Scottish people.

Have a good weekend.