Council tax revaluation 'delay'

[T_i_B]

http://news.bbc.co.uk/1/hi/uk_politics/4254972.stm

Ministers are considering postponing the revaluation of homes for council tax in England - a move which could delay big rises for many households.

It is understood the Cabinet is to discuss a possible delay until after an inquiry into local government funding, due to finish by the end of 2005.

Senior ministers fear revaluation would prove politically damaging for Labour.

Every home in Wales was revalued last year, with a third moving up at least one valuation band and 8% moving down.

[fedsron2us]

1. I hear the screech of wheels and smell the burning of rubber

as New Labour executes a handbrake U turn on this issue. My contacts in the IT business tell me that the government has completed part of the computer project to implement the new Council Tax even though the final band changes were not going to be notified to the public until 2007. It seems that the politicians may have had sight of the likely increases in the ratings and decided that to impose them on an increasingly sceptical public was electoral suicide. Although the civil servants are using the words 'delayed' and 'postponed' this is purely a damage limitation exercise. You can be certain that the new property valuations are never going to be used. I wonder how much taxpayers money the government has wasted on this exercise.

On edit - This item is running on the BBC, ITN, Channel 4 News, Teletext, Ceefax, Teletext, the Daily Mail, the Times, the Daily Telegraph etc. When a story like this gets run across all the media you can be sure that it is being released under government control and that the 'considering' of the issue has already taken place. The news has also come out on a Saturday which is another sure sign that they are trying to minimise the political fall out.

[non sociopath skin]

2. Would it be too much to hope that the scare could frighten the Blairites .

.. into some creative re-thinking about Local Government finance?

After all, the only thing the Council Tax ever had going for it was that it wasn't the Poll Tax.

The Skin

[T_i_B]

5. The only way of doing this properly if you ask me...

...is a local income tax, that way you would have a tax based on actual ability to pay. Basing a tax on house prices is at best no more then a educated guess at ability to pay.

[fedsron2us]

6. I expect some sort of property tax to survive

since they are cheap to administer and hard to avoid. The problem is that the Council tax has imposed an immense burden on many pensioners who possess just enough savings to deny them access to benefits but not enough income really to cover the cost of this levy. Part of the problem is caused by the weird and wacky world of government means testing that assumes any capital owned by the elderly is earning 10 % interest per annum. In reality that sort of return is not available on any sort of investment apart from the most risky of junk bonds. As a consequence of this policy you have people with income of not much more than £5000-£10000 a year getting stuck with Council Tax bills of over £1000. Given this situation it is not surprising the old buggers are getting stroppy. Of particular concern to the government will be the fact that some pensioners may decide that a period spent incarcerated at Her Majesty's pleasure in a warm prison with three meals a day is better than struggling to meet the Council Tax, heat their homes and feed themselves. It seems that this day may have arrived when the ex vicar, Alfred Ridley decided he preferred 28 days in the slammer at a cost to the tax payer of £3000 than forking out the money for the tax arrears he owed.

http://www.thisismoney.co.uk/tax-advice/council-tax/article.html?in_article_id=403576&in_page_id=82

Ridley was particularly clever in withholding only that element of the Council tax levied over and above the increase in the base rate of inflation. This sort of claim to equitable liability combined with civil disobedience gives the Treasury the vapors since they end up creating a martyr and paying out vastly more money than they ever recover. In view of this situation I do not think that they have any alternative but to reconsider the whole basis of local government funding. If they have any sense they will retain some form of reduced Council tax but back it up with a local income tax. It might also be a good idea for the Chancellor to ditch his assumption that modest investors are going to get a 10 % return on capital and instead base the threshold on something more meaningful like the miserable interest rates that the government offers on its own pensioners bonds.

[Nihil]

9. A local income tax is not automatically fair either

The problem with a local income tax is that the rich people (who are
allegedly the ones being targetted) could buy another property in a
cheaper area and pay the LIT there.

How would a LIT handle indirect income? (i.e., not PAYE)

Would it mean mandatory tax forms every year and one big lump sum to
be found? Or somehow figuring it into your tax code?

I suspect I would be objectively better off with a local income tax than
with the current system but by the time the various Anderson's have had
their cut, the actual figures will be higher, simply to pay for the
*change*, not the the relative merits of either scheme.

[dcfirefighter]

3. Council Tax - a great opportunity for a LVT

a great opportunity to shift to a land value tax

http://www.landvaluetax.org.uk/whatis.htm
http://www.scottishgreens.org.uk/site/id/4133
http://www.newcolonist.com/tworate.html

[fedsron2us]

7. The Treasury is always 'considering' a land tax

but never implements it. Britain did have a Development Land Tax in the 1970's but it failed to raise much money as the charge was only levied when the development 'event' took place. It was finally axed by the Thatcher government. The idea has been re-floated again recently but I expect the vested interests among the house builders, the major landowners and the city will ensure that it is throttled in its cradle. Ivana Trump only spoke the truth when she said that taxes were for the 'little people'. Whether the levies are on income, turnover or property the bulk of the paying is done by ordinary working people of modest means.

http://society.guardian.co.uk/housingdemand/story/0,14488,1438100,00.html
http://www.newstatesman.co.uk/landreform/lr200409200007.htm

[ben_packard]

4. This really pisses me offf...

all throught the election campaign we were told that the net income from council tax would remain the same, and that the reevaluation was needed to make the system fairer (though most house prices have risen, the plan was that those that have risen by more than the average would get a CT increase while those with slower growth would receive a decrease). So either this was a blatant LIE, or the government is refraining from doing what is RIGHT and FAIR purely because of the poilitcal fall out.

[Mr Creosote]

12. We were told it during the election campaign?

OF COURSE it was blatant lie, that's what election campaigns are for.

[Guy_Montag]

8. What about a %age of the value paid

my parents' situation highlights the stupidity of the current situation. They sold their house in Edinburgh & moved to a brand-new, smaller house in the country.

Their old house was sold for 30% more than their new house, but since it was valued in 1990 or something, is in band D, their new house (valued when built) is in band G.

Makes no sense does it.

Simple result, pay 1% of what you paid for your house in council tax.

[fedsron2us]

10. Council tax revaluing is 'shelved'

until after the next General Election

http://news.bbc.co.uk/1/hi/uk_politics/4262590.stm

I love the way Whitehall has moved the language from 'delay' to 'postpone' to 'shelved'. Of course in political terms the next General Election is an eternity away so we can pretty much be sure that the revaluation as currently envisaged will never see the light of day. This is not the first time a British goverment has bottled this issue. Both Tory and Labour governments failed to update the original rateable values of properties in the period from the 1970s to the early 1990s. As a result local taxation came to bear no relation to reality. It looks as though history is about to repeat itself.

[muriel_volestrangler]

11. Previous Labour description: "desperate opportunism"

But that was when it was the Tories' idea, of course.

Speaking earlier today on GMTV, Mr Blair said: "From the Conservatives this really is the most desperate opportunism because a week ago they said they were going to proceed with the revaluation. The only reason we have got the council tax is because of the poll tax Michael Howard introduced."

http://money.guardian.co.uk/tax/story/0,1456,1464014,00.html

PM on Radio 4 just reminded the Labour minister of this.

[fedsron2us]

13. Millibrand admits £50 million already spent on Council Tax

revaluation by the time the government pulled the plug

http://politics.guardian.co.uk/localgovernment/story/0,9061,1574751,00.html

Meanwhile more pensioners prepare to go to jail for non payment

http://politics.guardian.co.uk/localgovernment/story/0,9061,1574991,00.html