Let’s start with the Scottish Budget.

The Scottish Government’s Budget was passed by the Scottish Parliament yesterday with the support of the Liberal Democrats.  The Budget outlines the Scottish Government’s £30 billion spending plan for the next financial year.

The amendment that stood out concerned the public health levy also known as the  “Tesco tax”.  The change will mean that instead of collecting £30m, £40m and £40m over the next three years it will bring in £5m less in each of these three years.  The Scottish Government claims that only 240 retail premises, around 0.1% of all business premises in Scotland, would pay more.  It will be interesting to see the reaction to this amendment.

Now to the news that over one million taxpayers face a penalty of £100 for failing to submit their self-assessment tax returns on time.  The figure of 1.1 million is the lowest since online filing first started and compares with 1.4 million last year and 1.6 million the year before.  These taxpayers will have to pay the £100 fine unless they have a reasonable excuse.  Valid reasons include serious illness, a bereavement, or a loss of documents because of theft, fire or flood.  After three months, additional fines of £10 a day start to accrue and could eventually amount to a maximum of £1,600.  More on this can be found in an article from the BBC news website which can be found here.

Two non football tax avoidance stories this week.  HMRC announced that its next planned crackdown will target construction workers.  Traders who carry out roofing, joinery bricklaying, window fitting and carpentry will be targeted.  The clampdown  follows other campaigns with doctors, dentists and tutors in the spotlight.  Interested but not surprised to see HMRC making it clear that they will use web searches to target those dodging tax.

The second story was extremely embarrassing for the UK Government and in particular Danny Alexander the Chief Secretary to HM Treasury.  This story concerned an arrangement reported to have allowed the Student Loans Company’s chief executive, Ed Lister, to avoid thousands of pounds in income tax and national insurance.  HMRC had authorised the SLC to make gross payments to Lester’s personal services company.

How could anyone at HMRC or HM Treasury think this was a good idea or could be justified? Am I surprised? No.  It seems that there is a section in these any other government organisations who just don’t get it.  The UK Government’s handling of the Network Rail bonuses is just another example of this attitude and I suspect, sadly, won’t be the last.  Thanks due to the BBC’s Newsnight programme for bringing the SLC issue to a wider audience.

BBC Newsnight journalist Richard Watson summed this issue up very well:  “In the current climate of national austerity and financial hardship, it’s hard to imagine a more politically charged story.  One of the most senior public servants in the land, paid by the taxpayer, granted special concessions to be paid gross through his private service company based at his home address.”

Now to an example of the carrot and stick approach to taxation and behavioural change.  I blogged about this issue last week.   The Scotsman reported this week that Scots who do not insulate their homes should be forced to pay higher council tax or face increased stamp duty land tax on their property.  Not sure about the stamp duty land tax point as it is the purchaser who pays that tax.  Nonetheless Alex McLeod, chairman of the Association for the Conservation of Energy told the Scotsman:  “… sticks as well as carrots are needed to encourage people to conserve energy in their homes.”

Interestingly the idea was attacked by a diverse range of bodies.  The TaxPayers Alliance branded the idea as “outrageous” and Friends of the Earth Scotland said that the Scottish Government should pay for everyone to have free insulation.  The article from the Scotsman can be found here.

Now to Westminster.  The jostling for position prior to the UK Budget in March continues.  This week it was Nick Clegg saying that Conservative plans to give married couples a tax break must take second place behind a proposed tax cut for low earners.  The UK Deputy Prime Minister, it has also been reported, wants his party’s plans to increase the threshold for income tax to £10,000 to take precedence over any move to recognise marriage in the tax system.

The House of Commons Public Accounts Committee has criticised HM  Treasury for the way it monitors government spending.  It seems that almost £11bn in unpaid tax has been written off without HM Treasury knowledge.   A report on the first set of “Whole of Government Accounts” by the Committee said that HM Treasury’s ability to identify financial risks needed to improve.  An article from the BBC News website on this can be found here.

Now to a worrying trend.  An increasing number of businesses are struggling to pay their tax bills after new figures show a growing number are using credit cards to make their payments.  During 2005/06 businesses made just over 6,000 credit card payments to HMRC for PAYE, corporation and personal tax bills.  This had increased to 365,000 for 2009/10.  The credit card payments in 2005/06 totalled more than £2m.  In 2009/10 it had increased to just under £486m.  Thanks to the Ashworth Law firm which conducted a Freedom of Information request to collate the data.

Now to Englandshire and a matter I have covered before.  Eighteen local authorities in England have rejected an offer of UK Government money that would allow them to freeze council tax.  You may remember Eric Pickles,  the UK Government’s Secretary of State for Communities and Local Government, recent comment that councils in England had a “moral duty” to freeze the council tax.  Clearly some councils in England beg to differ on this point.  I was going to say “let battle commence” but battle clearly has commenced.

So to Europe and an old favourite.  The Ernst & Young Item Club has calculated that the UK would be liable to pay 75 per cent of the revenues from the European Commission’s Financial Transactions Tax because of the size and scale of Britain’s financial services sector relative to the rest of Europe.  Even if the UK opts out it seems that the UK’s financial sector would still have to contribute about 60 per cent of total revenues if a “reverse charge mechanism” was applied.  Something for our politicians to think about.  They might also want to consider abolishing charging stamp duty and SDRT on shares transactions if a deal was done on FTT.  I suspect there is plenty of mileage left in this particular debate.

An interesting week for football north and south of the border.  The more interesting sport stories of the week also seemed to involve tax.  This should not come as a surprise given the amount of money that exists at the top end of this particular sport.  In simple terms it was ever thus.

Have a good weekend.