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Annual Ground Rent ….

Written by on 29th November 2020

……. how Scotland can increase its pubic revenue collections

When I first read about Annual Ground, Floor & Roof Rent (AGFRR), I thought it read like one of those magic money trees that the Tories are so fond of telling us don’t exist.

Is it just a lovely fiction?

Graeme McCormick is the man who has worked out how AGFRR could be established in Scotland. He doesn’t indulge in flights of magical thinking about magical money trees. But you can maybe understate why ‘magic money tree’ came to my mind when you learn that AGFRR would mean no longer paying any :

  • income tax
  • council tax
  • VAT
  • a few other taxes

Instead we’d pay a tax on the land & property we own or rent. So, someone living in a three bedroomed house with a garden would pay around £4000 annually in AGFRR.

Hey, that’s a lot more than my current council tax. Yes it is but here’s how it works: Spoiler: We’re all going to get a basic citizens income thrown in as well.

Income or (tax deduction)Devolution without AGFRRDevolution with AGFRRIndependence with AGFRR
gross salary£26,500£26,500£26,500
ADD: Universal Citizens Income£0£10,000£10,000
TOTAL INCOME BEFORE ALL TAX AND/OR AGFRR HAS BEEN CHARGED£26,500£36,500£36,500
LESS: (Income tax and National Insurance)(£4,000)(£2,144)£0
LESS:(Vat and other consumer taxes)(£4,900)(£4,900)£0
LESS:(Council Tax and Water Rates)(2,400)£0£0
LESS: (AGFRR on 3 bedroomed semi detached villa)£0(£3,262)(£4,285)
NET INCOME AFTER ALL TAX AND/OR AGFRR HAVE BEEN PAID£15,200£26,194£32,215
How AGFRR works for a 3bedroomed house with garden with one occupant.

If you want to know more about how it all works, have a listen here:

Did you notice the Universal Basic Income of £10,000 a year that AGFRR could generate for each of us? See why I started off thinking this was like magic? But actually this could be partially introduced under the current Scotland Act of 1999 and bring immediate benefit. For all its benefits to come into force, we would need to be independent. What’s not to like?

Graeme has written a book about AGFRR. You can order a copy here. And he has written more about it in Business for Scotland here.