London Loses Over £900m In Uncollected Taxes Since 1996

12.00.00am GMT Fri 7th Nov 2003

London's economy has lost £908 million in uncollected Council Tax since 1996, Liberal Democrat London Mayoral candidate Simon Hughes MP revealed today.

In his speech to the Liberal Democrat London Regional Conference on Saturday, Mr Hughes will outline plans for the unfair Council Tax to be scrapped in favour of a fairer local income tax based on ability to pay.

Inaccurate council records, tax dodging, and the complicated bureaucracy of collecting Council Tax have left many inner and outer London boroughs out of pocket. Those who pay have been subsidising those who avoid the tax. The move would also improve collection rates and reduce administration costs.

Mr Hughes said:-

"Council Tax is unfair, and inefficient. Millions of pounds do not get collected, often leaving the poorest households and poorest boroughs to foot the bill. Those who pay, pay more, or have their services cut instead.

"Four percent of the Council Tax take is spent on bureaucracy. In contrast income tax costs just over 1% to collect. This costly bureaucracy leaves less money for vital services.

"Scrapping council tax would save hundreds of millions in bureaucracy, stop people cheating the system and allow money to be returned to hard-pressed taxpayers.

"If elected Mayor, I would put pressure on Ministers to scrap the hated council tax and replace it with a fair local tax that takes account of people's ability to pay."