Osborne to offer tax powers to big cities - BDO comment
22nd May 2015
Terry Jones, Tax Partner at accountants and business advisors BDO LLP in Yorkshire comments: -Devolution of taxing powers to big cities will not be as broad ranging as Scottish devolution and the taxes likely to be devolved are stamp duty land tax and council tax rather than income tax, corporation tax or VAT.
Giving big cities more power over local property based taxes would allow them to react to local economic conditions and, in the case of stamp duty land tax, local property prices. In Manchester for example property prices differ considerably to London where the stamp duty land tax rates and bandings have historically been set. As more cities obtain these taxing and spending powers it will be interesting to see whether cities begin to compete with each other on setting tax rates and whether they will direct the funds they raise to attract businesses and encourage start-ups or focus on local residents - who will of course vote for the next mayor!