By Steve Bargeton, political editor

FINANCE MINISTER Tom McCabe moved yesterday to close a loophole to ensure certain vulnerable people do not pay council tax.

As a result of the Executive’s new care legislation, some people who are in receipt of a housing support service and residing in certain defined shared dwellings have been forced to pay council tax when they were previously exempt.

Legislation has now been laid in Parliament which will close the loophole and exempt relevant properties from local taxation altogether.

The new measure, which will affect about 2500 people across Scotland, will come into force on October 1.

Ministers have also asked all local authorities to write off any council tax debt to people affected—and to grant refunds to those who have already paid.

But local taxpayers will not be expected to foot the bill.

The Executive will provide a specific grant to each local authority to cover the full costs, including water and sewerage charges.

“I am pleased we have been able to address this unfortunate anomaly,” said Mr McCabe yesterday.

“We fully appreciate this situation will have been upsetting for those affected and that is exactly why we have taken this action to sort it out.

“We will ensure the loophole is closed—and that no-one is one penny out of pocket as a result of it.

“I hope this reassures those people we are doing all we can to help them to live a secure and independent life.”

The finance minister continued, “It has taken longer than we would have liked to resolve this as it is so complex, but I am satisfied we are announcing a solution which will be welcomed by all concerned.”

However, SNP finance spokesman John Swinney said the whole local tax system should be changed.

“This is very welcome but it is just another example of the relentless inequality of the council tax system,” said the North Tayside MSP.