Scots local income tax costs disputed

The cost of Scottish executive plans for a local income tax have been disputed by the Scotland Office.

The SNP administration at Holyrood is pledged to reform council tax with a levy on income set at 3p in the pound.

But a study by the Westminster government has estimated that the changeover would cost Scotland's local authorities, health boards and charities almost £15m as they adjust their payroll systems.

The Scotland Office review added that it would cost them a further £5m a year to administer the system.

HM Revenue and Customs has also indicated that it will not collect the tax, with a separate Scottish system likely to have to be established.

Labour minister David Cairns said on Tuesday that: "These figures show that Alex Salmond's local income tax is a double whammy - cutting funds for vital services and at the same time destroying jobs. This tax on jobs and services will cost Scotland dear."

A spokesman for Wendy Alexander, the Labour leader in the Scottish Parliament, added: "This once again shows this ill thought-out tax is going to have the effect of adding further cuts to local services on top of those already imposed by the council tax freeze."

However the Scottish executive claimed the figures were "quite inaccurate" and "have no foundation in fact".