Where to start? I think I will start with the Scottish Futures Trust. I remember well the negative reaction to the SFT when it was first proposed. The coverage the SFT has received this week shows how much things have changed. The fact that the long term costs of PFI are now widely known also shows how good an idea the SFT was. A report on this from the BBC news website can be found here.
This raises another issue. Notwithstanding the fiscal powers debate it is clear Scotland is increasingly doing things its own way. On areas such as health or education the differences are well documented. Now Scotland is to have its own food standards agency and a new governing body for the Scottish canals. This is not because of Calman or the Scotland Act but because of the actions of the UK Government. Add to this the Revenue Scotland announcement and you see the direction in which things are moving.
Now to a subject I have written about before, the Crown Estate. It is now difficult to find someone against devolving control over the Crown Estate in Scotland to the Scottish Parliament other than the present UK Government. If the UK Government is not even willing to cede control over this body to the Scottish Parliament then it is easy to accuse them of not seriously engaging in the fiscal powers debate. A report on the latest ploy by the UK Government to not devolve control of the Crown Estate to the Scottish Parliament can be found here.
Now to the UK Government’s so called “Heritage tax”. “The Heritage Alliance is disappointed that the UK Government has refused – despite widespread opposition and strong challenges to the rigour of its evidence base – to reconsider its Budget proposal to remove zero rating of VAT on approved alterations to listed buildings.” No sign yet of a u-turn on this proposal. More on this can be found here.
The Sunday Times recently reported that Scottish Government advisor Dr Andrew Cameron has advised that a tax break, which would allow wealthy landowners and investors to plant trees in exchange for tax offsets, would help Scotland meet its forest coverage goals. That would of course require further tax powers to be devolved if this was to be just a Scottish tax relief. Let’s also not forget that the last attempt at something like this was a complete shambles. Hopefully if this idea is revisited lessons will have been learned. A story on this issue from 2002 can be found here.
Now to the “shared services” debate. The House of Commons Public Accounts Committee has found that a Whitehall scheme to share resources across departments has cost hundreds of millions of pounds more than it saved. The scheme ran £500 million over budget, costing £1.4 billion, and of the five departments that took part, only one broke even. A report on this from the Telegraph can be found here. Sadly I am not surprised with this report.
Aggregates Levy is one of two other miscellaneous taxes recommended for devolving to the Scottish Parliament under the Calman Commission. The other being Air Passenger Duty. The UK Government has so far resisted devolving Aggregates Levy due to a European Court action by the British Aggregates Association. An update on this from HMRC can be found here. The UK Government are fast running out of excuses for not devolving Aggregates Levy.
I was not surprised to read that many elderly farmers are working long past retirement age because they fear losing agricultural property relief (APR). APR is likely to reduce their liability to inheritance tax. Their worries have been prompted by HMRC’s tactics of challenging APR on farmhouses at every opportunity. A report on this from the STEP journal can be found here.
Now to matters slightly further afield.
The European Commission’s Brussels IV proposal to simplify the settlement of international successions has received the final backing of the European Union’s Council of Justice Ministers. The regulation will come into force in 2015 and will apply directly in all member states, other than Denmark and the opting-out members UK and Ireland. Hopefully this is something that the UK and Ireland will consider again in the near future. A report on this from the European Commission can be found here.
Now to France. As expected, France’s new Socialist government has announced a series of increases in personal and business taxation. They include new wealth taxes and a tax on foreign owners of holiday homes. A similar idea was floated last year by the Sarkozy administration but it was dropped when the French Government was advised that such a tax would not survive a challenge under European Union anti-discrimination legislation. Hollande may believe he can avoid this by calling the levy a “social charge” rather than a tax. A report on this from the STEP journal can be found here.
The New York Times has published an article describing just how easy it is to set up a Delaware shell company without disclosing its beneficial ownership. This is something that the US Government has regularly pilloried many other countries for. Apparently Delaware has more corporate entities than people. The article from the New York Times can be found here.
A Berkshire man has been convicted of evading £430,000 inheritance tax on a Swiss bank account he held jointly with his mother. HMRC obtained Michael Shanly’s account details from the French authorities, who had bought them from a former employee of HSBC Geneva, who had stolen them from the bank. This is a good example of the increasing co-operation between European countries and the increasing effectiveness of HMRC. A report on this from the BBC news website can be found here.
Australia has introduced its highly controversial carbon tax, after years of bitter political wrangling. The law forces about 300 of the worst-polluting firms to pay a A$23 (£15; $24) levy for every tonne of greenhouse gases they produce. The Australian Government says the tax is needed to meet climate-change obligations of Australia – the highest emitter per-head in the developed world. A report on this from the BBC news website can be found here. The environmental taxation debate in the UK, in contrast, has slipped down the political agenda over the last few years.
I think I will end with Cyprus. The Cyprus government will not agree to cut its 10% corporation tax rate in order to secure a European rescue of its banking sector and public finances. Cyprus may though have to agree to a further VAT increase as part of these negotiations. Cyprus is taking a similar stance to the one taken by Ireland over the last couple of years. A report on this can be found here.
Have a good weekend.
