Boring for Scotland...

I appreciate that the general population out there is utterly fascinated by the ins and outs of a local income tax, so I am prepared to indulge you one more time. But do not expect me to do this more regularly. Anyway, The Telegraph reports:

Mr Salmond dismissed the suggestion that HM Revenue and Customs - which would be expected to collect the new tax - might choose not to co-operate with a unique system north of the border.
He said: "The decision on local taxation was devolved to the Scottish Parliament. You cannot possibly suggest that HM Revenue and Customs are not wanting to co-operate with the Scottish Parliament on a devolved matter."

It is - of course - not simply a question of the willingness to co-operate. I rather doubt if the HMRC's systems are geared up to cope with the concept of allocating certain amounts of income tax revenue to local authority areas according to either the residential address of the payee or the location of his place of employment. I will go further and boldly suggest that employers' payroll systems (which will of course need to make the necessary deductions from pay packets) are certainly utter strangers to the concept of local authority areas. Accordingly, a substantial amount of expensive systems modification will be required. Who, do you suppose, will be asked to meet the cost?

The acceptance by the SNP that HMRC should collect the local income tax raises two other issues. The first is that all of those council officials engaged in collecting council tax (preparing and issuing council tax demands, receiving the money, pursuing non-payers, and so on) will be redundant. I do not know how many officials this is but it must amount to thousands.

But arguably there is a more important point. The local authorities will not be involved in assessing liability for local income tax; they will not be involved in setting the rate of this tax (as the SNP have announced it will be set at an across the board rate of 3p in the £); and they will not be involved in collecting the tax. Their only role is to accept their share along with their government grant at the end of the day. In what sense is it a local income tax? To all intents and purposes it has become part of the central government support system for local authorities. Would it make any practical difference if this proposal were abandoned and replaced by a system whereby local taxation was totally abolished, the Parliament exercised its existing powers under the Scotland Act to increase income tax by 3 pence in the £ and the Executive agreed to give the product of that 3p increase to local authorities? I cannot see any effective distinction, although of course there would be a philosophical and legislative one. But to the taxpayers and the local authorities it would make no difference.