On 27 November the Scottish Government announced it is postponing the next revaluation of non-domestic rates until 2017.  In addition it has announced a comprehensive review of the non-domestic rates system.

The Scottish Government consultation, “Supporting Business – Promoting Growth” can be found here.  The consultation ends 22 February 2013.

Let’s start with Gordon Brown’s comments and in particular his claim that devolving tax and fiscal powers to the Scottish Parliament automatically means a “race to the bottom” for tax rates and in particular business tax rates.  There are a number of problems with this statement.  I will simply point out two.  Tax competition already exists.  Not just within the European Union but throughout the world.  Then there is the fact that the underlying law, for example tax reliefs, are just as important as tax rates to business.  Creating a Scottish tax system is also a once in a generation chance to create a simpler and more progressive tax system.  This opportunity is not available to the UK.  Evidence that the present Scottish Government is already putting this opportunity into practice is shown by its excellent consultation on a Land and Buildings Transaction Tax.  My earlier blog on this can be found here. 

Again on tax powers for the Scottish Parliament.  I was disappointed, but sadly not surprised, to see another patronising picture accompanying an article in Tax Adviser on the subject of the tax powers being devolved to the Scottish Parliament.  First we had a man in a kilt holding a whisky bottle and this month a scene from the movie Braveheart.    

Now to some incredible news.  HM Treasury is going to employ someone in Scotland.  I wonder if this has anything to with a certain referendum.  Of course it does.  An article on this from the BBC news website can be found here.  I did find it amusing that the position ends shortly after the proposed referendum date.  I should not be so cynical.  It is good that HM Treasury is going to try and find someone to appease the natives.  I suspect they have run out of gunboats. 

Now to HMRC.  HMRC is clearly under strain.  In addition to having to deal with numerous devolution issues its budget is being reduced by 15% whilst having to increase tax revenues brought in by compliance activity by £7bn per year by 2014/15.  Not surprisingly HMRC staff have begun “working to rule” to highlight ‘problems caused by the job and budget cuts. 

I was also interested to see that HMRC has published a draft code of governance for resolving tax disputes.  This follows the controversy surrounding some corporate tax disputes of which it was accused of agreeing over-generous resolutions.  An article on this issue can be found here.  

Clearly the UK Government is keen to show it is clamping down on tax evasion.  HMRC has paid out more than £1m in rewards to tax evasion informants since the start of the financial crisis.  An article on this can be found here.  And just to reinforce the point HMRC has published its rogues gallery of tax evaders and fraudsters.  An article on this from the BBC news website can be found here.

Now to an issue I have blogged on recently.  The Office of the Scottish Charity Regulator is reportedly to investigate 50 private schools to see if they meet the “benefit to the public” criteria in order to maintain their charitable status.  An article on this from the Sunday Herald can be found here.  This is an issue that still needs to properly debated.     

Now to the strange world of caravans and an article from the Herald.  It seems that a little-known tax loophole is set to cost Scotland’s councils millions of pounds a year in revenue.  Each caravan in a caravan park can apply for rates relief, which in turn cuts the overall bill for the park considerably.  It seems that few people knew about this loophole until the owners of caravans in the Rosneath Castle Caravan Park, near Helensburgh, first began using it. The 300 caravan owners at the park have now bombarded the Clydebank business ratings assessors’ office with letters and phone calls, each seeking to save a few hundred pounds per year in council rates.  The article from the Herald can be found here. 

Now to the USA and news that the Democrats are split over estate tax reform.  Democratic Party members of the US Senate have rejected President Obama’s proposal for a 45% top rate of federal estate tax on individual estates worth more than $3.5m.  The tax will rise sharply at the end of this year if Congress fails to agree on reform.  An article on this from Bloomberg can be found here.

Tax is also an issue in the Presidential election.  The Democrats have succeeded in turning the finances of Republican presidential candidate Mitt Romney into a lead news story.  Pressure is growing on Romney to reveal tax returns.  There are accusations that he failed to disclose a Swiss bank account, and even that he participated in the US Internal Revenue Service’s 2009 offshore tax amnesty.  An article on this from Forbes can be found here.

Let’s finish with an old favourite.  It seems that there have been some financial transaction tax stirrings in both Korea and France.  In order to bring the taxation of derivatives in line with other earned income and introduce another revenue source, the Korean Government has announced plans to impose a transaction tax on index options and futures.  France has also partially implanted its own financial transaction tax.  Although a small start, covering only shares in larger companies, and at 0.2%, it’s still lower than UK stamp duty on which it is modelled. Articles on the Korean proposal can be found here and the French proposal here.

Have a good weekend.

Let’s start with “Land Reform”.  The First Minister has set up a group of experts to look at this issue.  The First Minister wants the group “to deliver radical change” for both rural and urban areas.  It will be chaired by former Moderator of the General Assembly of the Church of Scotland, Dr Alison Elliot.  More information on the review can be found here.  One factor that is noticeable by its absence is taxation.  This should also be a review of how we tax our land and property.  If not included this is an opportunity missed.

Who is to blame for the state of the economy?  You would have though bankers might be high up on any list.  However, it seems there is another favoured suspect, tradesmen.  David Gauke, Exchequer Secretary at the UK Treasury, called people who pay tradesmen in cash “morally wrong”.  He has also claimed that the UK Government has missed out on about £2bn on taxes on these “off the books” transactions.

In response the regularly excellent Ian Bell wrote an article titled “Plumbers dodging VAT aren’t to blame for economic mess”.  His article in the Herald article can be found here.  This is one of the best articles I have read recently.

Gauke was also not helped when it transpired that Boris Johnson, David Cameron and Nick Clegg have engaged in the practice of paying tradesmen cash.  Gauke’s full speech can be found here.

The tradesmen issue aside, there were many good things in Gauke’s speech.  This includes a new UK Treasury consultation paper on giving HMRC new powers to force tax firms to disclose clients who are using tax avoidance schemes.  A report on this from the BBC news website can be found here.  More information on this consultation can be found here.  It is though still surprising that the UK Treasury has taken so long to even consider measures such as this.

It is always worth putting figures in context.  A new study for the lobbying group Tax Justice Network claims that wealthy individuals worldwide are holding at least $21 trillion in bank accounts in low-tax jurisdictions.  This dwarfs the £2bn figure mentioned above.  A report on this from the STEP Journal can be found here.

Now to the Scottish Government’s consultation on its proposed Land and Buildings Transaction Tax.  The consultation can be found here.  The Land and Buildings Transaction Tax will replace the current UK Stamp Duty Land Tax from April 2015.  This is important as it is effectively the beginning of a Scottish tax system.  The consultation is also of a standard that we will now expect.   Previous papers on corporation tax and excise duty, although not consultations, were simply not good enough.  Lessons clearly have been learned.  The consultation ends on 30 August 2012.

Now to the North Sea.  George Osborne has pledged £500m in tax breaks for companies developing the Cygnus gas field in the North Sea.  In addition two Chinese firms announced major acquisitions worth over £10bn in North Sea oil firms.  More on these stories can be found on BBC news website here and the Press & Journal here.  It seems that there is a great deal of life left in the North Sea and not just in Scottish waters.

One of the most important art objects ever donated to Scotland’s national collection in lieu of inheritance tax has gone on display. The Hamilton-Rothschild Tazza, a Byzantine sardonyx bowl mounted on a 16th-century gold stand, came from the estate of Edmund de Rothschild, who died in 2009, under the “Acceptance in Lieu scheme”.  A report on this from the STV website can be found here.

Now to an issue I have blogged about before.  An investigation for the Sunday Herald has shown that due to the charitable status of fee-paying schools in Scotland, while local authority schools have to pay full non-domestic rates, because many fee-paying schools are charities they receive an 80 per cent discount on their rates.  The investigation suggests the discount has saved private schools in the six local authority areas investigated £10m over three years. An article on this issue from the Sunday Herald article can be found here.

This issue shows how complicated devolution can be.  Non-domestic rates and charitable status are devolved matters.  Tax relief for charities is a reserved matter even under the provisions of the 2012 Scotland Act. 

Interestingly in the same week Stephen Twigg, Shadow UK Education Secretary, has said that Labour may remove the charitable status of some private schools.  Twigg warned that a UK Labour Government could enact legislation so that private schools not serving the community would lose their charitable status.

The UK Government has finally confirmed that fuel duty, air passenger duty and road tax are not environmental taxes.  This means that they are “revenue raisers” pure and simple.  The UK Treasury now defines an environmental tax as a charge which is explicitly linked to Westminster’s environmental aims, aimed at promoting behaviour change and is structured so that people pay more based on the potential damage caused to the environment.  An article on this from Holyrood can be found here.

I think I will finish with China and its attempt to attract more foreign investment.  China has slashed from 10% to 5% the withholding taxes it levies on profits repatriated by foreign companies, and on dividends paid to foreign shareholders of Chinese-quoted shares. The concessions apply only to companies based in double tax treaty partner countries, excluding the US.  A FT China article on this can be found here.

Have a good weekend.

Let’s start with the recent local government election.  I was disappointed that none of the main parties, of which Scotland now only appears to have three, put forward any serious proposals for reforming how we pay for our local services.  There is though one body actively campaigning on this issue and that is the think tank, Reform Scotland.  An article in the Scotsman on this can be found here.  Reform Scotland want our local authorities to have the power to decide whether to adopt a property tax such as the Council Tax or a land value tax or instead opt for an income tax, a consumption tax or a number of different local taxes.

Now to fiscal powers and the fact that National Insurance turns 100 in July.  100 not out but for how much longer?  The idea of combining income tax and National Insurance was considered by a working party as long ago as 1993.  The main reason for this is the erosion of the link between National Insurance contributions and welfare benefits.  This issue is again being looked at.  Do I think we will see a complete merger?  No, unless both income tax and National Insurance are controlled by the Scottish Parliament.  This is an example of how a Scottish tax system could create a more simplified system.

Again on fiscal powers.  I was not surprised to see a number of Conservative MPs arguing for a “Devo Plus Bill” as part of an “alternative Queen’s Speech”.  This was published on the Conservative Home website.  Conservative Home support the Reform Scotland proposal which would devolve all taxes to Scotland except VAT and National Insurance.  More on this can be found here.

Now to a group of people termed “High Net Worth”.  HMRC has announced that its High Net Worth Unit’s tougher approach on wealthy taxpayers has resulted in an extra £200m of tax revenue.  David Gauke, Exchequer Secretary to HM Treasury, said: “The Unit’s approach ensures that HMRC is working as effectively as possible with the very wealthy and that they are contributing a fair share”.  This was reported in the Financial Times on 6 May.  The article also claims that the amount collected by this Unit has doubled since it began operations in 2009-10.  The aim is for £560m by 2014-15.  This does though beg the question: why was this Unit only set up in 2009?

Now to a claim that the UK Government Minister for Civil Society, Nick Hurd, was never consulted about the cap on charitable tax relief announced by HM Treasury in March.  More on this from the STEP journal can be found here.  The UK Government has been at sixes and sevens on this policy.  I will be surprised if it survives the summer.  Unless of course summer is already behind us.

Again from the STEP Journal.  1.6 million people should have received letters by now from HMRC warning them that they have been undercharged tax under the PAYE system and will have to pay extra.  Another 3.5 million people will be given a tax refund.  The STEP article can be found here.  An example of the sheer scale of the UK tax system and the problems it faces.

Good to see that the Scottish Government’s prosecution service has passed 20 cases of large scale tax avoidance to HMRC for investigation.  An article on this from the Scotsman can be found here.  The referencing of Al Capone must be compulsory when journalists write about this subject.

Sometimes an argument just makes you shake your head.  The Scottish Government has announced that the minimum price for alcohol will be 50p.  Although this proposal has received a huge amount of support, the leader of the CBI in Scotland has warned that supermarkets are likely to receive millions in extra revenue from drink sales.  That of course is true.  So why is this organisation against the devolving of control of alcohol duty to the Scottish Parliament and the Scottish Government’s Public Health Levy (also known as the “Tesco tax”)?  There is of course no need to answer that question.  An article from the Scotsman on this can be found here.

It seems that top rates of personal income tax across the Organisation for Economic Cooperation and Development (OECD) countries have begun to rise again in recent years after three decades of steady reductions.  The OECD press release can be found here.  Let’s not forget one of the main reasons for the reduction.  Politicians decided that “stealth taxes” were a better option.  For “better option” read “will help me get elected”.  The economic crisis put paid to that “cunning plan”.

“A serial killer is stalking the wealthy suburbs of Athens with an idiosyncratic choice of victims. They are all rich Greeks who have failed to pay their taxes, and their corpses have been left scattered among the ruins of the ancient city, dead of hemlock poisoning, the means of Socrates’ execution.”  This is the plot of the latest bestselling novel by Petros Markaris, who has combined the roles of thriller writer and social commentator in Greece to such an extent that he has become one of the most widely quoted voices in the crisis.  The article on this from Business insider can be found here.

Now to a story that combines sport, tax and the financial crisis.  Diego Maradona is suing the Italian government for £40m, despite owing it £32m in unpaid taxes.  Only in Italy!  The article from the Metro can be found here.

Lastly, an update on an issue I wrote about recently.  Co-founder of Facebook, Eduardo Saverin, is one of the thousands of wealthy Americans to have renounced his citizenship recently in order to avoid the country’s international taxation regime.  An issue for those planning a Scottish tax system to ponder.  An article on this from the STEP journal can be found here.

Have a good week.

Where to start?  Tax and morality seems as good a place as any.

Cardinal Keith O’Brien has accused David Cameron of acting immorally by favouring the rich ahead of ordinary citizens affected by the recession.  The cardinal also denounced David Cameron’s opposition to a “Robin Hood tax” on financial institutions.  Those arguing for a European financial transaction tax have gone a bit quiet recently.  The cardinal’s interview has though brought this proposal back into the news.  Whether a tax such as this is introduced is though only part of the debate.  As with most taxation debates the secondary debate involves how the revenue should be spent.  The cardinal would like it spent helping the poor and vulnerable at home and abroad.  Others want an emergency fund for the next banking crisis.  An article from the BBC new website on this can be found here.

Now to the London mayoral debate. Included in Boris Johnson’s manifesto for a second term is a proposal to set up a commission that would explore the possibility of a “Barnett” style formula for London.  Johnson wants to keep more of the tax raised in London to be spent in London.  An article on this from the Guardian can be found here.  This is further evidence of how quickly the fiscal powers debate is moving.

The Scotland Bill has received its Royal Assent.  An article on this from the BBC news website can be found here.  A missed opportunity?  I think so.  That said, even under the Scotland Act (2012) we are going to have a Scottish tax system.  I am of course looking forward to the Scottish Government’s consultations on the tax powers being devolved but why stop there?  It is surely now obvious that we need to start thinking about the type of tax system we want.  That must include a review of all government tax, law and registration services and the creation of a Scottish Exchequer.

Good to see an article in the Herald on something I have written about recently.  Businesses in new Scottish enterprise zones will be able to claim up to 100% business rates relief as part of new incentives to stimulate investment in the economy.  Other measures announced by the Scottish Government include more efficient planning procedures, improved broadband, targeted capital allowances and international marketing.  The article in the Herald can be found here.

Another article from the Herald, this time on an “unprecedented” number of business rates appeals.  The article reports that court cases have been launched by retailers in Edinburgh, Glasgow, Dundee and Kirkcaldy and elsewhere as firms contest the size of their rate bills.  The article from the Herald can be found here.  The main argument being used is that the current rates were calculated in 2008, before the extent of the downturn became apparent.

For those of you interested in tax statistics, the relevant HMRC page can be found here.  For those of you interested in tax consultations, current HMRC consultations can be found here and current HM Treasury consultations here.  There will be many more consultations added over the next few months as the UK Chancellor in his Budget made reference to approximately 45 consultations.

Approximately 12,000 people who had been told that they no longer needed to fill in self-assessment tax forms have been sent penalty notices in error.  To put this in context, 130,000 people were taken out of the self-assessment process for this tax year.  Some 850,000 people were sent penalty notices for failing to submit their tax returns on time this year.  This is 550,000 fewer than a year ago.  An article on this from the BBC news website can be found here.  As mentioned in this article it is likely that “HMRC’s resources” played a part in this latest error.

Nearly 60,000 more Scottish pensioners than first thought will be hit by the UK Government’s decision to freeze age related personal allowances according to new figures published by HM Treasury.  The figures show the so called “granny tax” will impact 423,000 pensioners in Scotland by 2015-2016.   The article from the Herald can be found here.

David Cameron has backed proposals for an “airline levy” to ease waiting times at London Heathrow Airport border control.  Airlines using London Heathrow would pay higher landing fees to pay for additional UK Border Force staff to help remedy the long queues currently occurring.  You would be forgiven for thinking there was an election in London this week.  The UK Government is not making many friends in the airline industry just now.  The spat over increases in Air Passenger Duty continues.  More information on this can be found in an article on the BBC news website found here.

Now to Europe and the “debt crisis” debate.  Financial Times journalist, Gideon Rachman continues to argue against European countries trying to spend their way out of their debt crisis.  This is a quote from his article:  “There is, of course, scope for argument about the pace of deficit reduction.  But in a highly-taxed, highly-regulated, highly-indebted continent like Europe, more state-funded public works would simply build another road to nowhere”.  The full article can be found in the Financial Times on 1 May.

I will finish on a matter I have blogged on before.  More than 2,000 public sector workers could be avoiding the full rate of income tax through special contracts, UK Government research has found.  An article on this from the BBC news website can be found here and my earlier blog here. This is an incredible figure as it does not include those in the NHS or local government.  Danny Alexander is seemingly “shocked”.  It seems that “shock” is becoming the default reaction for UK Government Ministers.  You may remember George Osborne’s was also recently “shocked” at the extent of tax avoidance.  Tax and morality it was ever thus.

Have a good weekend.  “Tax land” will be back in three weeks time.

The main story of the week has to be the fact that the UK Chancellor, yes the UK Chancellor, said:  “I was shocked to see that some of the very wealthiest people in the country have organised their tax affairs – and to be fair it’s within the tax laws – so that they were regularly paying virtually no income tax.  And I don’t think that’s right.”

Words almost fail me.  Then again maybe I should be glad that George Osborne has finally realised what was clearly obvious to everyone else.  HMRC provided the UK Chancellor with anonymised copies of the confidential tax returns submitted to them by some of the UK’s wealthiest people.  These returns showed that the 20 biggest tax avoiders had legally reduced their income tax bills by a total of £145m in a year.  According to the report, the very rich have managed to reduce their income tax rate to an average of 10%; less than half the amount paid by the average Briton.  A report on this from the BBC news website can be found here.  Helpfully the BBC news website has also outlined the most common tax avoidance schemes.  This can be found here.

I am not sure that the Prime Minister’s announcement that he will publish details of his taxes is going to help the UK Government out of the hole they are digging for themselves.  As the UK Chancellor noted, these people are acting within the law.  Take for example the proposed cap on income tax reliefs.  The cap will apply only to those reliefs that are currently unlimited, which will therefore exclude pension contributions and EIS investments, among others.  The proposals will cap tax relief to 25% of income or £50,000 whichever is greater.  It is expected the draft legislation will be published for consultation later this year.

HM Treasury has now published more information on this proposal.  The report, which confirms charitable gift relief will be included in the cap, can be found here.  The report notes that current unlimited relief policy allows individuals to pay no income tax at all, which is not permitted in, for example, the US tax system.

Is that the end of the matter?  Of course not.  The Scotsman reports that Sir Tom Hunter has criticised George Osborne’s plans to cap tax relief on charitable donations as “ill-thought-out and punitive”.  The Scotsman article can be found here.  It is quite clear that charities fear their funding is under threat.  This sums up nicely the problem facing George Osborne.  He wants to crack down on aggressive tax avoidance but that is easier said than done.  Almost any proposal to change the tax system results in a campaign to prevent or amend the proposal.

Now to another controversial issue, retrospective changes to tax law.  HM Treasury has published the process it will follow when making unexpected changes to tax law.  The statement gives an undertaking that retrospective measures will be “wholly exceptional”.  The statement from HM Treasury can be found here.  A recent of example of a retrospective change to tax legislation involved Barclays bank.  A BBC news website report on the Barclays bank matter can be found here.  If the UK Chancellor is serious about tackling aggressive anti-avoidance then I am sure we will see many more examples of retrospective changes to our tax law.

Finance Secretary, John Swinney, has announced incentives and actions to stimulate investment, in four enterprise sectors, for green energy, manufacturing and life science.  These incentives include business rate discounts worth up to £275,000 per business or enhanced capital allowances, new streamlined planning protocols across all sites, skills and training support and an international marketing campaign to promote the sites.  A press release from the Scottish Government on this can be found here.

Now to VAT and two issues I have blogged about before.  A great deal has been written about pasties and VAT since the UK Budget statement.  What though of another VAT anomaly.  Why is VAT levied on the renovation of old buildings but not on the sale of new houses?  Does this encourage energy saving?  Does this encourage the building of new homes?  Why not at least introduce a lower rate of VAT on residential renovations and repairs, as happens in the Isle of Man.  Sadly more questions than answers or signs of any change of policy.  A link to my earlier blog on this issue can be found here.

The Scottish Liberal Democrats have urged the Scottish Government to drop their plans for a single police force over concerns that the force will potentially face an annual £22m VAT bill. The eight existing forces are currently exempt from the tax due to their ties to local authorities.  A link to an earlier blog that covers this issue can be found here.  My earlier blog also includes my expectations as to how HM Treasury will view this matter.  Although I can understand the Scottish Liberal Democrats opposition to the single force policy, do they really think that the VAT should be levied?  If not, will they lobby their UK counterparts who, after all, are in charge of HM Treasury on this matter?  I suspect not.  The Liberal Democrats press release can be found here.

To Wales and the news that Welsh supermarkets have seen a massive drop in the use of plastic bags when they charge for them.  A 5p bag levy was introduced across Wales last year.  A report on this from the Daily Mail online can be found here.  Good to see the Daily Mail outlining the situation in the other parts of the UK.

The Spanish Government has announced a general tax amnesty offering taxpayers the chance to disclose irregularities in their past affairs without being prosecuted or penalised. The cost is a one-off payment of 10% of all undeclared assets and rights.  This follows similar measures in Greece and Italy.  More information on the Spanish amnesty can be found here.

Have a good weekend.

I will start with where to find one of the most comprehensive and detailed review’s of last week’s UK Budget statement.  The link is to the always impressive Institute of Fiscal Studies and can be found here.  In particular see the “Business tax, stamp duty and anti-avoidance slides”.  Slide 9 on “Forecast revenue from anti-avoidance measures” is particularly revealing.

Now to the fiscal powers debate.  I was disappointed to see that Peter de Vink has been deselected by the Scottish Conservatives.  Peter was hoping to be elected to Midlothian Council in May.  As far as the fiscal powers debate is concerned this shows that there are some on the centre right in Scotland who can see the opportunities that fiscal autonomy or independence could bring.  Peter’s article in the Herald can be found here.

The First Minister has announced the setting up of a “Fiscal Commission Working Group” to establish a fiscal framework for an independent Scotland.  The group will include former World Bank Chief Economist and Nobel Prize winner Jospeh Stiglitz of Columbia University.  My only slight concern relating to this group is that it comprises four economists, albeit eminent economists.  This group needs to ensure it has an understanding of the underlying law and legal framework that is crucial to creating a new fiscal framework for Scotland.  That includes the creation of a Scottish Exchequer.  I will once again reiterate my call for a review of all government tax, law and registration services in Scotland.  A Scottish Government press release on this can be found here.

I was also interested to read about a report by the David Hume Institute which claimed that an independent Scotland would be liable for around £100bn of debts and liabilities.  In particular I was interested to see one of the first references to the “other side of the balance sheet”.  The report says that the UK has approximately £821bn of “assets”. The £100bn figure comes from deducting £69bn of assets from approximately £152bn to £171bn of debts and liabilities.  A Scotland on Sunday article on this story can be found here.  This particular part of the fiscal powers debate has a long way to go.

In advance of May’s local government elections, Reform Scotland has called for non-domestic rates to be devolved in full to local authorities.  This would mean a variable business rate in different areas of Scotland.  The Reform Scotland paper can be found here.  Non-domestic rates is one of two tax powers presently devolved to the Scottish Parliament, the other being council tax.  Although these taxes are administered by the local authorities control rests with the Scottish Parliament.

The proposal would also mean that local authorities would keep the revenue they collect from business rates.  At the moment this revenue is handed back to the Scottish Government.  The Scottish Government then redistribute it as part of its grant to each local authority.  The Reform Scotland proposal could also be used as a framework for when control over the Crown Estate is devolved to the Scottish Parliament.

According to a study carried out by accountancy firm UHY Hacker Young, Edinburgh businesses contribute more to the UK economy per head of population than any other major city in the UK.  The main reason given is that Edinburgh wasn’t hit as hard by the financial crisis as London.  In addition, oil-rich Aberdeen was the only major UK city to see its economy grow during the recession.  This is excellent news for the Scottish economy.  An article from the Scotsman on this can be found here.

Now to corporation tax.  The Financial Times recently reported on how 15 multinational companies are considering locating substantial operations in Britain as a result of UK corporate tax reforms.  What I found most interesting about this report is when tax competition is discussed in a UK context it is a positive thing.  Contrast this with the tone of the debate over devolving control over corporation tax to the Scottish Parliament.

Continuing on the corporation tax theme.  It is not just the headline rate of tax that is important.  The underlying law which deals with, for example, reliefs is just as important.  Further evidence for this is shown by a recent statement by the European Commission.  The European Commission are claiming that the UK is breaking European law by imposing an immediate capital gains tax charge on companies that relocate to another EU member country.  The Commission has requested that the UK abolish this exit tax within two months, or be referred to the European Court of Justice.  I await the reaction to this by the UK Government with interest.  The statement from the European Commission can be found here.

The Unoccupied Properties Bill has been introduced at Holyrood.  At the moment empty and unfurnished residential properties are exempt from council tax for the first six months.  After that period, they qualify for a 10% discount.  Under this Bill local authorities will be given the power to charge up to twice as much council tax on residential properties that are empty and unfurnished.  It is hoped this will act as an incentive for home owners to bring their empty houses back into use.  The Scottish government has also announced a new loan fund which will be specifically targeted at projects bringing properties into use for affordable housing.

The new bill will also controversially reduce the non-domestic business rates discount for some empty commercial properties from 50% to 10%.  The argument put forward is that this will encourage owners to bring boarded-up shops back into use.  A report from the BBC news website on this can be found here.

Now to England.  Over 85% of local authorities have accepted the UK Government’s offer to freeze council tax rates.  This is contrast to the agreement reached between the Scottish Government and all of Scotland’s local authorities.  England’s local authorities were offered a one-off grant worth 2.5% of their budget if they agreed to the freeze.  More on this can be found here.

Let’s end with Wales and the news that the Welsh Government has started to consult on whether Wales should be a separate legal jurisdiction.  The Welsh government will ask the judiciary, lawyers and members of the public whether they want a jurisdiction along the lines of those found in Scotland and Northern Ireland.  An article from the Law Society Gazette on this matter can be found here.

Have a good weekend.