22 February 2017

Shades of the poll tax ...

Rates revaluations cause trouble.  It was the threat of a rates revaluation in Scotland (with the losers screaming blue murder and the winners sitting tight) that led to the introduction back in the 1980s of the poll tax to replace domestic rates.  And we all know how that resulted.

So now we have another revaluation, this time for the purposes of  business rates.  And it is looking ominous.  The Guardian reports:
It’s a bit rich for the chancellor, now reportedly in “listening mode” on business rates, to signal that he is aware of the challenges the digital economy presents to a property-based tax. That fundamental problem has been voiced for more than a decade and has simply been ignored by government. Amazon and the other big online retailers are no longer modern creations.
Philip Hammond, one suspects, will end up inventing various reliefs to try to quell the anger of those small businesses in London facing increases of up to 400%. But something more than a sticking-plaster is required. If not, this toxic row will return every time potential rents – the basis for establishing rateable values – are recalculated.
Aye, but what is the answer - nobody seems to know.

(Incidentally, the valuation bands for council tax bands in Scotland are still based on property valuations made in the 1990s.  This inevitably embeds unfairness in the system as the increase in property values varies according to location.  But successive Scottish governments have done nothing, preferring to let sleeping dogs lie.  Sooner or later, those dogs will come back to bite them.)

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