Scotland to introduce a “carrier bag charge”

“By 2014 Scottish retailers will charge a minimum of 5p per bag in a bid to reduce carrier bag use.

Environment Secretary Richard Lochhead announced the move today which follows a consultation that was held last year to gauge public opinion. He said shoppers would be encouraged to reuse carrier bags to cut down on the 750 million bags used in Scotland each year.”

The Republic of Ireland, Northern Ireland and Wales have already introduced such a charge.

More on this can be found here.

 

 

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Another week in “tax land”

Time for another “tax land”.

Where to start?  Jersey seems as good a place as any.  Jersey is also considering its constitutional options.  This is not new news.  I was in Jersey a couple of years ago and independence was also being discussed amongst the lawyers I was meeting.  Jersey is in a different position to Scotland as it is for all intents and purposes already fiscally autonomous and is a British Crown dependency.  An article on this from the Guardian can be found here.  This is from the Guardian article:

“A barrage of regulatory clampdowns and political attacks on the Channel Islands’ controversial financial industry has prompted one of Jersey’s most senior politicians to call for preparations to be made to break the “thrall of Whitehall” and declare independence from the UK.  Sir Philip Bailhache, the island’s assistant chief minister, said: “I feel that we get a raw deal. I feel it’s not fair.  I think that the duty of Jersey politicians now is to try to explain what the island is doing and not to take things lying down.  The island should be prepared to stand up for itself and should be ready to become independent if it were necessary in Jersey’s interest to do so.”

It seems that the constitutional genie is well and truly out: Scotland, Falkland Islands, Jersey and now it seems on UK membership of the European Union.

Now to the announcement by the Scottish Government of its intention to create its own tax administration and collection agency, to be called Revenue Scotland.  Its main job initially will be to administer the two new Scottish taxes devolved under the Scotland Act.  The fact that it is to work closely with Registers of Scotland and the Scottish Environment Protection Agency, also makes sense.  These new taxes, a Scottish Stamp Duty Land Tax and a Landfill Tax, will be directly linked to the work done by these organisations.  A press release from the Scottish Government on this can be found here.

As regular readers of this blog will know I have been writing about this issue for many years now.  Whilst I welcome this announcement I still think we need to be more radical.  We need to review all government tax, law and registration services.

I was not surprised to see some negative comments about the Revenue Scotland announcement. However, if Scotland has its own tax system it needs its own tax administration and collection agency.  That applies just as much under the Scotland Act as independence.  That though is not the only reason.

Let’s not forget the fact that UK tax law is based on English legal principles, or how HMRC and HM Treasury dealt with the introduction of Stamp Duty Land Tax in Scotland, or the inheritance tax changes to trusts, or the proposed planning-gain supplement, or the Scottish Government’s local income tax proposal or VAT and the new Scottish police and fire services.  All good reasons for welcoming Revenue Scotland.

The Scottish Government is in no doubt that Revenue Scotland will be able to administer the new Scottish taxes at a lower cost than HMRC.  I agree with that.  I have also noticed that no-one seems to remember one of the more ridiculous claims made when the Calman Commission proposals were being debated.  The Scotland Office claimed that the cost of administering a separate Scottish tax system would be the same as the present UK system.   Complete and utter nonsense.  The Scotland Office paper can be found here.

One last point on Revenue Scotland.  I met with a number of Scottish Government officials just before the 2011 Scottish election on this issue.  It was quite clear that they wanted nothing to do with this idea and only met with me at the insistence of a Scottish Minister.  Thank you Jim Mather.  I wonder if their attitude has changed in any way?  Let’s hope so as this is just the start.

The Scottish Government has also published its consultation on a Land and Buildings Transaction Tax.  This will replace Stamp Duty Land Tax.  The consultation for Scotland’s replacement to Landfill tax will follow later this year.  I use the word “summer” advisedly.  The consultation can be found here.

And there’s more.  The Scottish Government has finally published its consultation in a “plastic bag tax”.  The consultation can be found here and a press release from the Scottish Government here.

Even the UK Government is playing its part.  The UK Government is consulting on whether to allow the Scottish Government the power to issue its own bonds.  The move would potentially allow Scottish Ministers to raise hundreds of millions of pounds.  A provision in the Scotland Act 2012 has already enabled the UK government to amend the way in which Scottish Ministers can borrow from 2015-16.  An article on this from the BBC news website can be found here.  The consultation can be found here.

One last point on fiscal powers.  The UK government is reportedly considering proposals to devolve complete control of income tax if Scotland votes ‘no’ in the independence referendum.  This sums up nicely what is wrong with the UK Government’s approach to this debate.  If the UK Government has a serious proposal to make, make it.  If not be quiet.

Now to tax and morality.  David Cameron branded comedian Jimmy Carr “morally wrong” for seeking to avoid paying his fair share of tax.  Mr Carr is understood to use an aggressive, though legal, tax avoidance scheme which enables members to pay income tax as low as 1%.  This is dangerous territory for David Cameron.  Already the press have published the names of many others who are involved in similar schemes.  If David Cameron seriously wants to tackle this issue he must act against all those who seek to evade tax.  Has he considered the public disclosure of all tax returns or a minimum percentage of tax that must be paid?  I suspect not.

This is not just a UK Government issue.  The Herald discovered that Transport Initiatives Edinburgh used tax loopholes to allow directors to avoid paying income tax rates on £1 million in fees and bonuses. The company, which closed last year due to its handling of the trams project, paid directors and consultants through their firms.  As a result, they were subject to 20% corporation tax rather than 40% income tax.  The article from the Herald can be found here.

The evidence that the “rules” do not apply to everyone is growing.  Whether it is the 3,000 UK civil servants being paid through a company, or the payments made to those who were partially responsible for the trams fiasco in Edinburgh or the celebrities avoiding tax.  I am resisting the urge to say it was ever thus but in times such as this it does seem even more reprehensible.

One last point.  I often am quite critical of HMRC.  I would argue for good reason.  That said, is it really time to cut 10,000 jobs?  An article on this and the proposed strike by HMRC staff can be found on the BBC news website here.

Have a good week.

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Another week in “tax land”

Given it is local election time I think the level of funding for council tax benefit is an appropriate place to start.  The Scottish Government and the Convention of Scottish Local Authorities have decided to provide £40m to make up a shortfall of council tax benefit funding.  An article on this from the Scotsman can be found here.  The figure that stands out is the 558,000 people in Scotland who receive this benefit.

The Confederation of British Industry has denied that big companies are benefiting from “sweetheart deals” with the taxman.  HMRC has faced criticism over alleged secret deals with the likes of Vodafone and Goldman Sachs over unpaid tax.  The CBI briefing note is well worth reading and can be found here.

The campaign trying to make the UK Chancellor think again over the latest increase in air passenger duty continues.  The latest claim from this group of aviation and business organizations can be found here in an article on the Herald.  Part of this claim is that overseas tourists have been put off coming to the UK during the Olympics because of punitive air taxes.   The group says bookings from Australia and New Zealand are down by 25% compared to the same period in 2011.

The furore surrounding the UK Chancellor’s tax relief cap and how it might impact on charities continues.  I liked this opinion piece found on the website of the Scottish Council of Voluntary Organisations.  The piece can be found here.  Although I see the need for tax caps and/or investment limits in certain circumstances, for example under the Enterprise Investment Scheme or Venture Capital Trust relief, I would be surprised if this policy in its present form survives the summer.

It seems that mortgage lending rose sharply in March as buyers rushed to complete sales.  The stamp duty land tax exemption for first-time buyers who bought homes valued at between £125,000 and £250,000 came to an end after two years on 24 March.  The UK Government do not think that this relief has been effective in increasing first-time buyer numbers.  A report on this from the BBC news website can be found here.  I continue to be surprised that our politicians fail to campaign for a change to the 1% and 3% stamp duty land tax rates and bands.

A study by the Taxpayers’ Alliance has revealed that 3,000 council employees across the UK were paid six-figure sums in 2010-11, a rise of 13 per cent on the previous year.  The highest paid was in Glasgow where Ian Drummond, formerly executive director of special projects who has since left the post, received a £450,628 package.  Reports like this confirm the view held by some in the private sector that our local authorities completely lost the plot over senior salaries.  An article on this from the Scotsman can be found here.

Scotland appears to be moving towards charging shoppers around 5p every time they use a plastic bag.  This if often referred to as a “plastic bag tax”.  Scottish ministers have again indicated that it will consult on the matter in the near future.  Wales, Northern Ireland and the Republic of Ireland already have such a charge.  It does seem that the Scottish Government is dragging its feet on this.  A plastic bag tax was thrown out by MSPs during the last parliament when Liberal Democrat Mike Pringle tried to push through a 10p levy.  An article on this from the Daily Express can be found here.

A tax fraudster, who fled the UK four years ago after telling a judge in a note that he was unprepared to go to jail and found the idea frightening and upsetting, has been extradited from France and is beginning a six year prison term.  Mark McGovern had pled guilty to laundering £278,340.87 of criminal proceeds in April 2008, following a wider HMRC investigation into VAT fraud.  More on this can be found here.  I would have thought that most people would find the thought of being locked up frightening and/or upsetting.  Not surprisingly that is not a good enough reason to avoid being sent to prison.

New figures from the Office for National Statistics have shown that the UK Government has met its borrowing target for the year, despite borrowing more than expected in March.  An article on this from the BBC news website can be found here.  Worryingly these figures also show that most of the cuts to public spending have yet to be made.

Now to the USA and the announcement of a dramatic increase in citizenship renunciations.  According to Internal Revenue Service figures, at least 1,800 Americans renounced their USA citizenship in 2011, an all-time record at eight times the 2008 number.  The main reasons given are the USA’s worldwide taxation system, the Foreign Bank and Financial Accounts rules and  the Foreign Accounts Tax Compliance Act regime.  An article on this from the Daily Mail online can be found here.  The USA is one of a handful of countries to tax its citizens on income earned while abroad.

Then there were two.  Francois Hollande defeated Nicolas Sarkozy in the first round of France’s presidential elections.  The tax and fiscal policies of the final two candidates, in particular Hollande’s, have received a great deal of international press coverage.  An example of this coverage, from Bloomberg’s Paris correspondent, can be found here

Now to a Budget statement from 1940.  “New British budget announced: higher income tax, increased duty on alcohol, tobacco & matches, to raise an unprecedented £2bn for war costs.”  Thanks to @RealTimeWWII.  Notwithstanding duty on matches interesting to see how little has changed.

Finally I was very sad to hear of the death of Stephen Maxwell.  I got to know Stephen very well over the last few years and he is a great loss to those arguing for greater fiscal powers and the wider independence movement.  A real gentleman at all times.

Have a great weekend.

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