Glasgow claims the LIT would cost it millions

26 Jun 08
Scotland's biggest council has dealt a blow to the Scottish Government's plans for a local income tax by warning that it could lose up to £133m a year.

27 June 2008

Scotland's biggest council has dealt a blow to the Scottish Government's plans for a local income tax by warning that it could lose up to £133m a year.

Responding to the consultation paper on replacing the council tax, Glasgow City Council says a centrally set LIT of 3p in the pound would leave it £60m short because of the difference in income from the taxes.

If the UK government withholds council tax benefit, that would leave a further gap of £73m, making a potential total loss of £133m, the Labour council estimates.

It has calculated that the tax would need to be set at 4.5p in the pound to pay for the services it provides.

Council leader Steven Purcell said: 'We've taken a long, hard look at this proposed new tax and I simply cannot see how it can be made to work without increasing taxation for a large number of people or drastically cutting council services.'

Glasgow's comments follow a number of other critical responses to the Scottish National Party administration's consultation document.

CBI Scotland said it would be bad for enterprise and for the economy. The business organisation voiced members' 'deep disquiet' over the proposals and listed problems such as the additional cost and administrative burden the tax would place on employers.

PFjun2008

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