24 July 2009

Rule change won't up council tax

The public sector accounting body CIPFA has spoken out to allay fears that changes to councils financial reporting rules will result in increased council tax.

Many media outlets reported that the rule change, which involves how authorities calculate holiday pay, would see a 3% hike in council tax across the country.

But CIPFA has issued a statement saying it does not expect to see any rise, as discussions with the DCLG have made 'substantial progress'.

CIPFA did say government could need to step in to prevent the rise, but added it was confident this would happen following the discussions.

THe statement reads: 'CIPFA can clarify that it does not expect to see an increase in the council tax as a result to the move to International Financial Reporting Standards (IFRS).

The move to IFRS will result in changes to the way councils account for holiday pay.  On its own, this could have lead to rises in Council Tax. 

However, CIPFA is confident that the Government will act to stop this happening.  Indeed, the consultation that CIPFA issued on 24 June included details of our discussions with the Government, and shows that substantial progress has already been made in this area.'

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