Swinney hints at SNP compromise on local income tax

Published on Sunday 9 March 2008 21:13

SNP ministers will have talks with senior Liberal Democrats later today in an attempt to secure the support they need to have a local income tax introduced in Scotland.

John Swinney, the finance secretary, will meet Tavish Scott, the Lib Dems' finance spokesman, to find out if the parties can reach an agreement on scrapping the council tax.

Both want to introduce a local income tax, but the Lib Dems want the rate set locally by councils, while the SNP wants a single rate set nationally.

Last night, Mr Swinney indicated he was prepared to compromise and revealed that the consultation paper on the issue, due to be published by the Scottish Government this week, will include the option of setting the rate nationally to start with and then letting councils set the rate after a few years.

However, the Scottish Government's hopes of bringing in the scheme have been hit by further setbacks from the UK government.

Yesterday, Her Majesty's Revenue and Customs (HMRC) issued a statement making it clear that it would not take part in any local income tax scheme devised by the Scottish Government.

Scottish ministers would need the help of HMRC to access the salary records of all those who would have to pay the new tax. Without this, they would find it very difficult to implement the new tax.

Mr Swinney said he expected to hold talks with HMRC after his detailed plans were published later this week.

He added: "We are working on the assumption we can establish a co-operative arrangement with HMRC. I hope they are willing to assist us because it would be an efficient way to go about the collection of the local income tax."