STEALTH TAXES

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Households are being hit with "stealth taxes" by councils for having green waste collected or taking rubbish to a tip. More than a third of councils in England are charging residents as much as £90 a year to pick up garden waste from outside their homes so it can be recycled. Some councils have also introduced charges of up to £20 for residents who take unwanted items to the local rubbish dump.

Local authorities claim the fees are to cover cost of disposing of waste in the face of extensive budget cuts. Critics say, however, that garden waste, which includes grass cuttings, leaves and plant debris, is turned into high-quality compost and soil improver that the local authorities can sell. In some areas councils are even levying fees to collect garden waste from householders which is then dumped into landfill along with normal household rubbish.

The charges have angered campaigners who believe they are another example of councils introducing charges by the backdoor on top of council tax. John O'Connell, research director of the TaxPayers' Alliance, said, "Councils shouldn't look to increase charges on waste collection to plug gaps in their finances. Council tax has nearly doubled over the past decade and regular waste collection is one of the key services taxpayers expect, so to add new charges on it will be particularly frustrating when families are struggling with inflation and sky-high utility bills.

What's more, local authorities sending this waste to landfill will also have to explain to residents why they put so much pressure on them to organise their rubbish into so many containers, precisely to reduce the amount of rubbish sent to landfill. Instead of hitting taxpayers with more charges, councils should look to eradicate genuine waste out of their budgets so they can cut council tax bills."

It has been revealed that 111 local authorities of the 326 responsible for collecting waste from the kerbside outside residents homes have begun charging for collecting garden waste. The charges range from around £14 a year to have reusable sacks collected from the kerbside to £90 a year to subscribe to the fortnightly "garden waste collection schemes". Most councils charge residents between £30 and £50 for the service, but Harlow District Council in Essex charge £90 for the fortnightly collections.

The Royal Borough of Kingston-Upon-Thames is charging £69 a year for the service while Adur District and Worthing Borough Councils are charging £70 to residents joining the scheme for the first time. Many of the councils also charge an additional "sign up" fee to cover the cost of the bin while others ask residents to purchase special single use "garden waste bags", costing between 36 pence to £2.20 each instead of annual subscriptions.

Under current legislation councils are allowed to charge for garden waste collections despite fears that it discourages residents from recycling. Environment Minister Lord Henley wrote to councils earlier this year ordering them to stop backdoor bin charges. They said that such measures can encourage fly-tipping and burning in back gardens. But four further councils have announced plans to introduce new charges for having their waste collected from April 2012, Uttlesford District Council in Essex, Forest of Dean District Council in Gloucestershire, London Borough of Ealing Council and Wokingham Borough Council in Berkshire.

At least two councils in Wales were also found to be charging householders to collect garden waste while local authorities in Scotland such as Aberdeenshire Council have been relying upon third party schemes that charge £30 a year to collect garden waste. Three councils have also started charging residents to dispose of some items at Household Waste Recycling Centres, or tips.

Somerset County Council charges householders £2 per visit, while Great Yarmouth Borough Council has introduced a "Pay as you throw" scheme, charging £20 per cars bringing DIY waste to its tips. Devon County Council is charging £2 to throw away a bag of rubble and £7 for a bag of plasterboard. At least nine councils have also been found to be forcing residents to buy garden waste bags for between 60 pence to £1.50 which are then collected and dumped into landfill along with the normal household refuse.

Under environmental laws, councils are supposed to be minimising the amount of waste they send to landfill and are charged landfill tax to help discourage this. Local government minister Grant Shapps hit out at the practice. He said, "It is wrong for councils to be covertly dumping garden waste in landfill, residents are being conned, and the environment is being harmed. These charges are the brainchild of Hilary Benn who as Environment Secretary under Labour actively encouraged councils to treat households as cash cows."

Roberta Blackman Woods, a Labour shadow minister for communities and local government, said also criticised councils for sending green waste to landfill and said the government was not doing enough to make sure it was recycled. She said, "I would like to ensure that in planning for waste management, garden waste is not taken to landfill; instead it could be used to create compost or energy. This is something the Government should be promoting but it is evident that their claim to be the greenest government ever is sounding more ridiculous by the day."

Since April this year more than £24,925 in fines have been handed out to residents by councils for breaking rules on recycling and putting rubbish out. At least 310 "fixed penalty notices" have been issued to householders for putting recycling or waste into the wrong bins, or leaving their rubbish out on the wrong day. A spokesman for Local Authority Recycling Advice Committee defended the use of charging for collecting garden waste.

She said, "A charge can often support the promotion of home composting which remains the preferable means of treating garden and some food wastes." Councillor David Parsons, chairman of the Local Government Association's environment board, said councils were charging for garden waste collections to help them cope with huge cuts in their budgets. He said, "Councils know many residents value garden waste collections and wouldn't introduce or increase charges lightly. However, with such stretched budgets many are having to re-evaluate how the costs of such a service are covered when set against general waste and recycling services which everyone uses." (Source: Daily Telegraph, Nov/11)

Secret plans for a multi-billion-pound package of stealth taxes on fuel, cars, air travel and consumer goods have been drawn up by the government to combat global warming. The proposals show that the Government is considering introducing a range of hard-hitting 'eco-taxes' that will have a devastating effect on the cost of living.

Most controversial of all, the documents reveal the Government is planning to grab billions of pounds of extra revenue from motorists, without telling them. It is considering introducing a special mechanism so that whenever oil prices go down, the Government would get the cash in extra fuel tax, not the motorist.

A letter from Environment Secretary David Miliband to Chancellor Gordon Brown says the advantage of this is that the Government would gain billions of pounds 'without individual announcements on fuel-duty rises needing to be made'. Mr Miliband calls for tough measures to combat 'car use and ownership' with a 'substantial increase' in road tax.

He also suggests a 'Treasury mechanism' allowing the Government to benefit from any fall in oil prices and reintroducing the 'fuel-duty escalator', which put up the duty on petrol by 5% over inflation until Mr Brown ordered a freeze in 1999.

Mr Miliband calls for a new 'pay-per-mile pollution tax' on motorists, VAT on air travel to EU destinations and new taxes on inefficient washing machines and light bulbs. He also backs laws to let local councils impose a 'rubbish tax' on households by using 'spies' placed in dustbins to weigh non-recyclable refuse. (Source: Mail on Sunday, Oct/06)

Income taxes are at their lowest level in history, yet we pay more tax than ever before. Why? 'Stealth' taxes, that’s why. There are good recent examples in which the tax take has been increased without the taxpayer being aware of it. The most apparent is the phasing out of mortgage interest relief (MIRAS), the removal of married couples’ allowance and the removal of the ability of non-taxpayers to reclaim the tax credit on share dividends. Indeed, two good examples of stealth taxation - personal allowances and the higher-rate tax threshold - were both mentioned in the Pre-Budget Report for the wrong reasons. Both are only due to increase in April 2002 by the rate of inflation (1.7%). Yet earnings are rising at the much faster rate of 4.5%. This means that more than 2.7 million of the 28 million taxpayers are in the higher rate bracket in which earnings above £33,935 are taxed at 40% - 1 million more than 10 years ago.

Here are just some of the stealth taxes that have been implemented - or that we know will be implemented - in the future.

* The gradual reduction of the value - and now the complete removal - of the married couple’s allowance for couples aged under age 65.

* The gradual reduction - and now complete removal of mortgage interest tax relief at source (MIRAS).

* The removal of the age-related married couple’s allowance, where neither of the married couple were aged at least 65 on 5 April 2000.

* The removal of the ability of pension funds to recover the tax credit on UK dividend income – which works like compound interest in reverse - meaning that pension contributions will need to be increased to provide the same level of benefits.

* The inability for non-taxpayers to recover the 10% tax credit on UK share dividends.

* The reduction in the level of tax-free savings that can be made each year. Under PEPs/TESSA it was £12,000, (£9,000 for PEPs and £3,000 for the first year of a TESSA). Under the ISA it is £7,000.

* The failure of the higher-rate tax threshold to increase at the same rate as earnings. Since 1988, this threshold has increased by just 52% to £29,400 while average earnings have increased by 84%. Since 1997, approximately 200,000 more people have to pay tax at the top rate.

* The failure of the nil-rate inheritance tax band to increase by the rate of inflation. This means more inheritance tax will become payable - especially on the death of property owners.

* The inability for PEPs and ISAs to recover the tax credit on UK dividends after 5 April 2004.

The impact of stealth taxation is borne out by the statistics, which show that, although rates of tax have reduced, the government expects to increase its overall tax take in 2001. It has been reported that the Tories collected £99.1 billion in income tax in their last year in power, and that this year Gordon Brown expects to collect £145 billion. This represents a whacking 45% increase in the income tax take, which is due to the impact of more people now being subject to higher-rate tax and more cash being raised by stealth taxation.

Homeowners are facing property tax rises of £700 or more this year thanks to a punishing series of stealth tax hikes on their homes. The average taxpayer in England could be forced to pay out up to £4,500 in taxes on their home in 2007 thanks to soaring council tax and stamp duty charges combined with new local levies on rubbish removal and plans for a shake-up of town hall finances.

The spiralling cost of the bill for the 2012 Olympic Games could also mean that taxpayers are asked to foot the bill. The Government's own figures show that costs have risen by £900million and while the Mayor Ken Livingstone but critics warn that the £20 a year council tax levy to pay for the Olympics could either be raised or extended beyond the current 10 to 12 year period.

In addition, the Budget this Spring is expected to lead to stealth tax rises in stamp duty because tax thresholds will rising in line with house price inflation. In some parts of the country, the average home now pays 3% stamp duty, £7,500 on a £250,000 property. That threshold has never been changed since it was introduced by Gordon Brown.

Matthew Elliott, chief executive of the Taxpayers' Alliance, said, "Homeowners are already feeling taxed to the hilt, but as the year progresses things will only get worse. As well as a barrage of sneaky property taxes, taxpayers will fork out more for their mortgages because of higher interest rates and more for their utility bills." (Source: Daily Mail, Jan/07)

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