SNP call for end to ‘grossly unfair’ £30m emergency services VAT bill

Scotlands finance secretary Derek Mackay is set to reveal provisional business rate levels in January
Scotlands finance secretary Derek Mackay is set to reveal provisional business rate levels in January
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Chancellor Philip Hammond is facing renewed calls to axe the “completely unjustified” £30 million annual VAT bill on Scotland’s national emergency services in his Autumn Statement this week.

Police Scotland and the Scottish Fire and Rescue Service are the only UK forces which pay such a bill.

It was introduced when the new forces was created three years ago and applies because they are now classed as national organisations, unlike the previous regional forces.

Police Scotland has paid a total of £76m in tax since it was formed in 2013 while the Fife service’s annual bill is estimated to be about £10m.

READ MORE: Scotland faces fresh austerity drive as more cuts planned

Finance secretary Derek Mackay has called for charges to be axed in a letter to the chancellor.

And SNP MSP Rona Mackay said: “This completely unjustifiable Tory tax is costing Police Scotland tens of millions each year – money that could otherwise be spent delivering frontline policing.

“The public will rightly struggle to understand why every police force in the UK is exempt from VAT but Scottish taxpayers are expected to pick up the bill.

“It’s grossly unfair – and if Philip Hammond refuses to fix this we’ll know that the Tories would prefer to shake down Scottish police to fill Treasury coffers than let Police Scotland get on with their job.”

The VAT issue remains controversial and was in the spotlight this year when Audit Scotland warned Police Scotland faced an £85m funding gap. Westminster’s Home Affairs Committee recently requested information from Police Scotland regarding its work training police forces of foreign governments.

At the end of a submission, sent on 2 June, Chief Constable Phil Gormley stated: “Finally you ask, in reference to a question posed by Mr McDonald (SNP MP Stuart McDonald), how much VAT Police Scotland is unable to reclaim, or has paid.

“Since Police Scotland was formed in April 2013 we have paid £76.5m in VAT and we remain the only police organisation in the United Kingdom to pay VAT.”

The situation arose as policing and fire services in Scotland were previously controlled by local councils, which can claim back VAT.

The new national forces are controlled by the Scottish Government, which cannot.