The SNP's radical plans to replace council tax with a new local income tax has been challenged by constitutional experts. Whitehall officials at the Treasury have claimed that only the UK Parliament in Westminster has the authority to change the tax system. Scotland's first minister, Alex Salmond, has pledged to create a local income tax, which would be set at 3p in the pound to replace council tax. The Treasury believes that, under the terms of the devolution settlement, Edinburgh can only make changes to taxes which are levied locally. But, because a local income tax would be collected nationally by HM Revenue and Customs, officials claim Mr Salmond is stepping beyond his powers. Many in Westminster have been watching the plan closely to see if local income tax could be rolled out for the rest of the UK. But experts say the Treasury has a strong case to halt the biggest change. The Law Society of Scotland's tax committee is currently considering its response to the executive's consultation. Committee member, James Aitken, said: ‘We all agree this has to be looked at properly. ‘One can see where the Treasury is going. If the tax is being set nationally and collected nationally, then the majority view is that this is a national tax.' Nicola Sturgeon, SNP deputy first minister, went on the attack. She said: ‘The Treasury is talking arrant nonsense. ‘Scrapping the unfair council tax and introducing a fair local income tax, based on ability to pay, is a matter for the Scottish Parliament to determine – through the proper procedures which apply to every Bill – not for the Treasury to dictate from London. The Treasury's intervention is constitutionally confused and politically inept.'
