Wooden Money

The Herald reports that a number of Scottish councils are getting very excited over the possibility of receiving tax rebates on VAT overpayments made during earlier periods (in some cases claims have been made dating back 35 years).

Seemingly councils, individuals and companies have received, to date, around £1.5BN in rebates from HMRC; eg Glasgow recovered £2.6M in VAT wrongly accounted for on hostel charges from 1974 to 1996, as well £3M in interest.

The councils will use the money to offset budget cuts.

All very well, maybe.

However, the rebates of "wooden money" are merely going from one organ of the state to another; no real income in the overall scheme of public finances has been received, the money "gained" by the councils will have to be saved elsewhere by the government and cuts then passed on to the councils.

They are spending time, effort and money scrambling after "wooden money"

Tax does have to be taxing.

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