Police Scotland hit with 'unacceptable' VAT bill

Michael Matheson said the VAT bill was 'unacceptable'
Michael Matheson said the VAT bill was 'unacceptable'
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Police Scotland will spend £65 million on VAT over the lifetime of a new emergency services communication network – the only UK force unable to recover tax on the project, it has been claimed.

Justice secretary Michael Matheson said it was “unacceptable” Police Scotland was the only territorial force in the UK required to pay tax as part of the emergency services network (ESN), a new mobile communications system being developed for police, fire and ambulance services.

Police Scotland has previously revealed that it has spent £76m on non-recoverable VAT since its creation in 2013.

Appearing before Holyrood’s justice sub-committee on policing, Mr Matheson said: “The cost of irrecoverable VAT over the lifetime of (ESN) for Police Scotland is likely to be in the region of £64.7m.

“I find it unacceptable that of the forces and fire services across the UK that are engaged in the development of this new program, the only territorial force sitting around that table that won’t be able to recover VAT is Police Scotland and the Scottish Fire and Rescue Service.”

A spokesman for the Treasury said: “In 2012 the Scottish Government chose to make Scotland’s police and fire services national rather than regional bodies.

"The Scottish Government were advised in advance that by making this change Scottish police and fire services would become ineligible for VAT refunds.”