'˜Millions spent on VAT could have paid for extra police'

More than 500 extra police officers could have been recruited with money spent on VAT, it has been claimed.

Police Scotland is unable to reclaim VAT

Scottish Labour said Police Scotland and the Scottish Fire and Rescue Service (SFRS) had spent £140 million on the tax between April 2013 and March 2017 – enough to employ 547 additional police officers and 223 extra firefighters.

Before 2013, police forces and fire brigades were controlled by local authorities which are able to reclaim VAT but that arrangement ended with the creation of Police Scotland and the SFRS.

The Scottish Government was aware of the tax implications ahead of the national services being set up and has subsequently lobbied the UK Government, unsuccessfully, to for VAT exemption.

According to Scottish Labour, the lowest annual tax bill the emergency services have paid since their creation has been £23m for Police Scotland and £9m for SFRS.

Lesley Laird, shadow Scottish Secretary, said: “That Scotland’s police and fire services are having to pay VAT is a mess of the SNP’s own making.

“They were repeatedly warned that their rush to centralisation would lead to our emergency services having to take millions out of their budget to be spent on VAT, yet despite this advice they did not listen and pressed on regardless.

“Now we see the true cost of this shambles. This tax on our emergency services could have paid for more than 500 extra police officers and more than 200 additional fire fighters.”

She added: “We will be calling on (Chancellor) Philip Hammond to apply a VAT exemption to the Scottish police and fire services in his forthcoming budget and for him to refund the £140m spent since the exemption was lost, putting our services back on a sound financial footing and able to get on with their job.”

The VAT bill has become a significant financial burden for Police Scotland, which is projecting for a £47m budget deficit in the current financial year.

Meanwhile the SFRS is considering plans to close fire stations and reduce firefighter numbers to help address financial pressures.

SNP MSP Ben Macpherson will host a debate in the Scottish Parliament on Tuesday on the issue of VAT.

A Scottish Government spokesperson said: “Ministers have been clear in their continued calls for the UK Government to end the glaring VAT disparity which means the Scottish Police

Authority is the only territorial police authority and SFRS the only fire service in the UK unable to recover VAT, leaving them to face £35 million of unnecessary annual costs. We welcome the support of others who back our calls.

“We have committed to protecting the police revenue budget in real terms, safeguarding policing from Westminster budget cuts and delivering an additional £100 million of investment by the end of this parliament, in addition to funding to support reform of £61 million this year. Also, this year we increased the overall operational budget for the SFRS by £21.7 million, supporting investment in vital equipment and resources.”