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11.04.16

Devolved nations taking lead on positive council tax reforms – Resolution Foundation

Proposed council tax reforms in Scotland show the need to reform the council tax system in England, the Resolution Foundation have said.

A new report from the Foundation says that the Scottish reforms, which involve lifting the council tax freeze and increasing council tax for properties in bands E to H, will lead to the richest tenth of households paying £125 more on average, compared to £11 for the poorest half, who will also lose three times less money than the richest as a share of their income.

The report says that the current system is based on evaluations from 25 years ago, which are now out-of-date and mean lower-income families are paying disproportionately more.

Adam Corlett, economic analyst at the Resolution Foundation, said: “Britain’s council tax system is out-dated, unfair and in urgent need of reform. While the issue has largely been ducked in England, Scotland now looks set to embark on significant improvements.

“The upcoming Scottish election looks set to be a key battleground for progressive taxation of properties – as well as incomes. It’s a debate that will likely benefit lower income households in the round, whichever party prevails, and one which parties across the UK should look to.”

The report also says that England is behind the other countries in the UK in updating its council reforms, with Wales having introduced an additional band at the top and undertaken a revaluation and Northern Ireland using a proportional rates system. The countries are able to implement these reforms because of increased financial devolution.

The council tax system was also criticised today by a new report which found that the local council tax support scheme, introduced in 2013 to replace the council tax benefit scheme, has led to increased cost for councils and more residents in arrears, as well as increased expenses for poorer families.

In contrast, the Resolution Foundation report says that low-income families in Scotland may be better off as a result of a more generous council tax reduction scheme.

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