A taxing problem for George Osborne
James Forsyth 11:33am
Today’s FT reports that additional council tax bands are being considered as part
of the Budget process. But there are several problems with introducing new council tax bands. First, this would require a wider revaluation, something that the coalition has ruled out explicitly and that would almost certainly drive up council tax for most people.
A revaluation, as a parliamentary question from George Osborne’s former chief of staff Matt Hancock established, would cost around £200 million. It would also take two to three years to complete,
meaning revenues from any new band wouldn’t start accruing until either very close to, or even after, the next election.
Finally, higher council tax bands are — inevitably — going to hit Tory seats hardest. Politically, this would cause problems especially if the Budget is also going to limit the pension
tax relief that higher-rate payers can claim.
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Bob Dixon
February 22nd, 2012 11:48am Report this commentWe need less tax & less government spending.
MikeS
February 22nd, 2012 11:54am Report this commentI think Mr Forsyth has made a fundamental error when he says that a revaluation "...would almost certainly drive up council tax for most people". Regardless of any new bands, the same amount of money would be raised from the same number of properties, therefore the average bill would remain the same - with some winners and losers.
normanc
February 22nd, 2012 11:56am Report this commentWho cares about rich fat cats, there's a welfare state to run, tax 'em til they squeal, George.
You've been doing a good job so far, far better than Labour managed cause they were hamstrung by their past record and couldn't go near as far as this government has.
Don't take your boot off their throats now for goodness sake, hold your nerve.
Nick
February 22nd, 2012 12:25pm Report this commentWhy not use the valuations from last time (1991) and just split the top band into two; thus making a Band H for those above £320,000 and a Band H+ for those houses above, say, £500,000.
The fact that the actual valuations are 20 years out of date is neither here nor there. The most valuable 1% of houses in the country are easy to determine. That's all that is important.
TrevorsDen
February 22nd, 2012 12:38pm Report this commentYou could also introduce an A- . It would not win any new votes for the tories but be a counter-argument point.
Dan Grover
February 22nd, 2012 12:54pm Report this commentThat seems like a sticking plaster for a much larger problem. If the aim is to increase revenue, just raise the council tax. If the aim is to make it "fairer" (ie with the richer paying more, and in a more granular fashion) then do some real reform and make a de facto poll tax - charge people individually instead of in an arbitrary, household way. My flat has 4 bedrooms, and the one above us has 2
Dan Grover
February 22nd, 2012 12:55pm Report this commentThey're identical, only their rooms are double the size of ours. We almost certainly pay the same rate of council tax, despite my flat producing double the rubbish, double the strain on the sewerage system, double the use of parks and leisure centres, double the liklihood of using local health facilities and day care providing by the local council etc. It's a profoundly unfair system as it is. Adding more bands won't help that.
EC
February 22nd, 2012 1:20pm Report this commentTinkering with the NHS and Council tax?
Very courageous indeed!
TomTom
February 22nd, 2012 1:52pm Report this commentSimply call it a Mansion Tax and make it additional to Council Tax. That is all we are really talking about.
WIlliam Blakes Ghost
February 22nd, 2012 6:42pm Report this commentDoes Osborne remember what happened last time the Tories 'reformed' with council revenues (hint Poll Tax)?
Osborne can (putting it politely) go forth and multiply. It would be the final nail in the Coalition's coffin (given it is already effectively a dead government).
Let's get rid of this Coalition before they legislate to make us suffer them until 2015....
THOMAS KNIGHT
February 22nd, 2012 11:06pm Report this commentRevaluation is long, long overdue and it should be taken out of the hands of politicians. It's a simple revenue question. Actually they'd be better to do it now, if the wait for another housing boom the politics of it would be even worse.
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