TREASURY LOOKS AT 'SUPER COUNCIL TAX' TO FORCE MULTI-MILLIONAIRES PAY MORE FOR THEIR PROPERTIES

FIRST PUBLISHED BY: THIS IS MONEY  

THE CHANCELLOR COULD IMPOSE SUPER COUNCIL TAX BANDS ABOVE BAND H TO FORCE THE WEALTHIEST TO PAY MORE FOR THEIR PROPERTIES.

The Chancellor could impose super Council Tax bands

The Chancellor is considering slapping taxes on expensive houses in a deal with Lib Dems that would also relax employment laws for small business. George Osborne is examining proposals to impose super Council Tax bands above the current band H in order to force the wealthiest to pay more for their properties. The plans, which are being discussed by the Quad of ministers drawing up the Budget, would be a victory for the Liberal Democrats, who have campaigned for a mansion tax on properties worth more than £2million.

But in return, Nick Clegg and his party have indicated they are prepared to sanction Tory plans to tear up some employment rights in order to encourage firms to hire staff. Senior Lib Dem sources say the Deputy Prime Minister will back proposals in the Beecroft Report on regulation which would give greater freedoms to micro-firms employing fewer than ten people. Under the plans, small companies employing people under the age of 25 would not have to give them full employment rights for a fixed period of time.

Tories, including Local Government Secretary Eric Pickles, have opposed any change in Council Tax bands because they feared it would lead to an expensive and controversial revaluation of all homes in Britain. But some Conservatives now believe that would not be necessary and that bands I and J – designed to hit multi-millionaires in London – could be imposed on homes based on the last valuation in April 1991.

Mr Clegg argued last month that it is wrong that someone with a house in Band H – which kicks in at properties worth £320,000 in 1991 – pays the same as someone with a home worth several million pounds. A Government source said: ‘Treasury orthodoxy favours taxing assets that cannot be hidden or moved. Even the best accountant in the world cannot hide a house from the tax man.’

Deputy Prime Minister Nick Clegg has argued that new tax bands I and J would hit multi-millionaires in London. The Beecroft Report, drawn up by venture capitalist Adrian Beecroft last autumn, has never been published after the Lib Dems condemned its call for ‘fire at will’ legislation that would have allowed bosses to sack staff without an industrial tribunal. Mr Clegg’s party is prepared to help get its way on property taxes after Mr Osborne came under pressure from backbenchers to back supply side reforms to boost business and jobs.

Former Cabinet minister Liam Fox yesterday stepped up that campaign, saying: ‘Political objections must be put aside. ‘It is too difficult to hire and fire and too expensive to take on new employees.’ Asked if the Lib Dems would support plans to suspend some workplace rights for under 25s – to encourage the hiring young unemployed people – a source said: ‘The devil is in the detail but it’s not something where the starting point of view is hostile.’

Lib Dems point out Business Secretary Vince Cable has doubled to two years the length of time someone must work before they are entitled to basic rights. A Treasury spokesman said the issue of mansion tax ‘comes up every year and it is speculation’.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX.

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