Laura Sharman 22 January 2015

New council tax bands could generate £4.75bn a year, says report

Council tax reform could raise £25.6bn of income by 2019-20 for local authorities and the Treasury, a new report has claimed.

The report, published by the Centre for Business Research (CEBR) on behalf of FairHome Tax UK, argues that the creation of three new council tax bands above H could contribute £4.7bn additional revenue to tax receipts in 2015-16, treble the amount of Labour’s proposed Mansion Tax.

Research published by the group last year argued that a mansion tax was ‘unworkable and unsustainable’, and would not deliver the promised £1.2bn for the NHS.

It says a ‘fairer’ system of council taxation would inject significant funds into the NHS and would eliminate or reduce the council tax burden for those in the bottom three bands.

Howard Cox, founder of FairHomeTax.uk said: ‘This fairer, more progressive approach to property taxation compared with the proposed Mansion Tax would provide a shot in the arm to local services and the NHS through existing channels, rather than adding more red tape.

‘FairHomeTax's report reveals that Labour's proposed Mansion Tax on the top 0.2% of houses, which could cost tens of millions to administer and would be difficult to enforce, is a far less effective revenue raiser compared with a sensible reassessment of the council tax bands.’

A survey last week revealed that the majority of MPs would prefer council tax reform other a new mansion tax.

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