Well off Scots face a huge council tax increase of 22.5 per cent as part of a bid to boost town hall finances, a leaked document has revealed which could affect over one in four households.
Plans for the tax hike are being discussed by local authority chiefs and the Scottish Government. STUC General Secretary Roz Foyer said the cash raised would be a “mere sticking plaster” on the “deep cuts inflicted” on councils.
A leaked paper by umbrella group COSLA reveals the discussions of a joint group chaired by ministers and council figures on tax reform, the Daily Record reports.
Technical changes to the calculations behind council tax - called ‘multipliers’ - led to big rises for people in band E, F, G and H properties in 2017.
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A similar plan is being examined again, even though Glaswegians are struggling with the cost of living crisis.
The paper states: “Repeating the 2017 changes would mean Council Tax would increase by 7.5%, 12.5%, 17.5% and 22.5% for properties valuation bands E, F, G and H respectively if council tax rates remained unchanged.
“The average increases, at 2023-24 council tax rates, would be around £127, £281, £464 and £741 per dwelling in these bands respectively.”
In 2021, there were 349,550 dwellings in Band E, 207,107 in F, 133,223 in G and 13,861 in H.
The paper continues: “Changing multipliers is a quick means to shift the burden of Council Tax toward those who can afford to pay their fair share.
“This would result in additional revenue to councils, as was the case in 2017 when similar changes were made. An estimate based on a similar change this time could see Councils being able to raise an additional £177m.”
The joint working group is proposing a consultation by the Government and COSLA on the tax change. A draft contains a range of questions, such as whether there should be increases for properties in the top four bands.
People are also asked if the hikes should range from 7.5 per cent to 22.5 per cent.
Respondents are also given the opportunity to say that rises should be smaller or greater than the ones listed, or even that there should be no increases.
Any change to the multiplier system would be separate to any annual rise that could be imposed by councils. Council tax bands are based on how much a property was worth in 1991 and calls have been made over the years for a revaluation.
The COSLA paper noted that the joint working group has also looked at revaluation as a longer term option. But it cautioned that this approach would require “significant work and resource”, as well as “political appetite”.
In a bid to raise extra revenue, the Government is also looking at creating another income tax rate for earnings between £75,000 and £125,140.
Labour MSP Mark Griffin said: "The party that promised to scrap the council tax over 15 years ago is once more forcing councils to increase council tax rates in order to fill the financial black hole that the SNP created.
"In the middle of a cost of living crisis, SNP economic illiteracy is forcing bills higher for thousands of Scots while the government obsesses over independence.
"This eye watering proposed hike in council tax is the result of the SNP’s economic incompetence - it is Humza Yousaf's Liz Truss moment."
Foyer said: “Property values have increased substantially therefore it’s the correct course of action that the Scottish Government and COSLA are looking at increasing fairness with respect to property bands F G and H.
“Whilst any further resource spending for local government is welcome, this would be a mere sticking plaster on the deep cuts inflicted on councils across Scotland.
“The Scottish Government and COSLA should be acting immediately to introduce rates review as a means of ridding us of an unfair council tax system in addition to wider property and wealth taxes.
“A tinkering of the system won’t cut it. The STUC tax proposals launched last year demonstrated that within a few years, the Scottish Government could have raised £3.3billion of extra revenue. Wholesale change and ambition is required; we just need a government who is prepared to show it.”
A Scottish Government spokesperson said: “The Scottish Government is committed to fairer, more inclusive and fiscally sustainable forms of local taxation.
“We have worked in partnership with COSLA through the Joint Working Group on Sources of Local government Funding and Council Tax Reform, to explore proposals for meaningful changes to be introduced to Council Tax. The group is considering a broad range of potential measures, which taken together will seek to provide fairness to the system.
“The Council Tax Reductions scheme continues to protect the most financially vulnerable, and regardless of the property band, nobody in Scotland will have to meet a council tax liability they cannot be expected to afford.”
