An end to Poll Tax debts

4th December 2014

Proposal to end collections on February 1.

A proposal to end the collection of Poll Tax debts from February 1 next year is contained within the Community Charge Debt (Scotland) Bill, which is published today.

The Scottish Government has brought forward the bill to bring an end to collection of debts under the discredited tax, which was abolished in 1993 after only four years in operation in Scotland.

The issue was brought to the fore following the independence referendum, amid reports that the expanded electoral registers could be used to identify and pursue Poll Tax debts at a time of record democratic engagement.

The amount of Poll Tax arrears collected by local authorities across Scotland has fallen in recent years to less than £350,000 in 2013-14, and some local authorities have ceased recovery of debts altogether. Nonetheless, the Scottish Government will cover the cost to local authorities of the Poll Tax debt that they would have expected to recover under existing arrangements.

The Community Charge Debt (Scotland) Bill is available to view at http://www.scottish.parliament.uk/parliamentarybusiness/Bills/84355.aspx

The Community Charge was introduced in Scotland in 1989 and superseded by the introduction of the current Council Tax system in 1993.

On October 2 former First Minister Alex Salmond announced the Scottish Government's intention to bring forward legislation to ensure that councils could take no further action to recover ancient Community Charge or ‘Poll Tax’ debts. Last week, in the Programme for Government announcement, First Minister Nicola Sturgeon confirmed the Bill will finally end collection of debts from non-payment of the Poll Tax.

As of 31 March 2014, Scottish local authorities reported a total of £425.3 million uncollected Community Charge for the years 1989-90 to 1992-93 inclusive, with much of that expected now to be uncollectable due to practical considerations and also to the operation of the law of prescription.

The amount of Community Charge arrears collected by local authorities across Scotland has fallen in recent years from £1,312,000 in 2009-10 to £327,000 in 2013-14, according to local authority data returns to the Scottish Government. Some local authorities have ceased recovery of Community Charge debts altogether.
These debts are collected under payment arrangements set up with taxpayers as well as through deductions from social security benefits.

COSLA has consulted local authorities to ascertain how much Community Charge debt is still subject to ongoing repayment and how much is expected to be collected under these arrangements. This consultation produced a projected cost to local government of £869,000, which will be met by the Scottish Government as an additional allocation through the local government finance settlement. This will be included in the relevant Local Government Finance (Scotland) Order, which is presented to Parliament for approval.

Welcoming the introduction of the bill, Deputy First Minister John Swinney said:"The Poll Tax was a hated levy which caused misery in hard-working communities across Scotland and which was widely discredited as an unworkable tax, opposed across all sections of Scottish society.

"It is therefore entirely correct that at a time of record democratic engagement in Scotland, we legislate to ensure that people aren't dissuaded from registering to vote because they fear being chased for decades-old debts.

"The Community Charge Debt (Scotland) Bill proposes that from February 1, collections will cease and the Poll Tax will be consigned to history for once and for all. And while it is not contained as part of the Bill, the Scottish Government has committed to covering the cost of debts that councils would have expected to recover in the lifetime of existing recovery arrangements.

"It should be made absolutely clear that this bill relates only to the Poll Tax and does not affect Council Tax, which forms a key part of local authorities' finances. It is quite proper for councils to use current information to assess current Council Tax liability, however we object to the use of the electoral registers to pursue historic debts from a defunct and discredited tax.

“Scottish Ministers have called on the UK Government to transfer responsibility for elections, including the electoral registers, to the Scottish Parliament, allowing decisions on the purpose of the registers and who should have access to it to be made here. We welcome the recommendation of the Smith Commission for the transfer of all remaining responsibilities in relation to Scottish Parliament and local government elections to Scotland."