Lib Dems say VAT bill on single police force will destroy savings

THE Scottish Government has been urged to drop its single police force plans over concerns it will be landed with an annual £22 million VAT bill.

The Scottish Liberal Democrats say the additional tax costs will negate any potential savings from restructuring.

Scotland’s current eight forces are exempt from VAT because of their ties to local authorities. But a letter from Treasury minister David Gauke MP last month appeared to suggest that would end with the change to national police and fire services next year.

Willie Rennie, leader of the Scottish Liberal Democrats, said: “The £22 million that will have to be paid to HMRC every year completely wipes out the savings that the SNP say will stem from the centralisation.

“The SNP have got their sums wrong and this latest blunder shows why they should drop their damaging plans once and for all.” However, the Scottish Government insisted it was still hopeful the two services would not have to pay VAT.

A spokesman added: “We have costed our outline business cases for police and fire reform responsibly.

“The figures show that, even with a VAT payment, a single police service will deliver estimated savings of £1.4 billion over 15 years, more than the other options.”