31 October 2008
By David Scott
The Scottish Government has indicated a major shift in its controversial plans for a local income tax by confirming it is investigating taxing unearned income and allowing individual councils to vary the tax rate.
Finance Secretary John Swinney said 'We're a government that has to listen to the views of other parties because we operate in Parliament without a majority, so we've got to find a way of building consensus.'
In its consultation on the levy, ministers had proposed a nationally set LIT of 3p in the pound and said it would apply only to earned income. But e-mails released to the BBC Politics Show under freedom of information legislation showed that officials wrote to Revenue and Customs on September 23, saying: 'We are now trying to assess how much money could be raised from investment income if a local income tax was applied to this.'
Confirming the approach, Swinney said: 'We're certainly considering that as an option, and if we decide to do this in due course and we all want to call it a U-turn, I'll call it a U-turn.'
For the first time the minister also conceded that the LIT could be varied locally, though with a cap of 3p. He also said he was looking at exempting students from paying the tax.
PFoct2008
