IFS/Mirrlees Review calls for LVT

24 Nov 2010

The independent Insitutute for Fiscal Studies (IFS) has published its findings on the reform of UK taxation. It includes the replacement of business rates and Stamp Duty Land Tax by "a land value tax for business and agricultural land" - but only "if practicable".

In the body of the Chapter (16) on Taxation of Land & Property, which runs to 39 pages, there is much more whole-hearted and rigorous analysis. However the practical difficulties are certainly not under-stated - but the authors describe their "radical set of proposals" for this area as having to deal with "current practice which is a long way from an economically rational and efficient system".

In particular, while not recommending council tax be replaced immediately, Mirrlees says it is "indefensibly regressive", thanks to "spineless government refusal to undertake a revaluation" and "will come to be seen as more and more untenable...some government will have to grasp the challenge".

ALTER has offered the Coalition for Economic Justice, which is in dialogue with HM Treasury on how to implement LVT, its own Ten Point Plan (updated since offered to the Party's Tax Commission in 2006) for reform that includes replacement of council tax. Meanwhile Mirrlees pretty well mirrirs what Lib Dems foungt the recent election on.

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