Fresh call to scrap Scottish police and fire VAT bills

Police Scotland and the Scottish Fire and Rescue Service became national organisations in 2013

Finance minister Derek Mackay has said he will put more pressure on the UK Treasury to scrap VAT bills for Scotland's police and fire services.

The organisations became liable for the tax after merging from regional into national bodies.

The Scottish government said it meant Police Scotland and the Scottish Fire and Rescue Service still faced an annual VAT cost of about £35m.

The UK government said MSPs knew of the VAT implications before the mergers.

Local police and fire services were exempt from VAT but this ended with the creation of national bodies in Scotland in 2013.

Other territorial services in the UK remain exempt.

The fresh calls for the UK government to deal with the "anomaly" follow a Sunday Times Scotland report suggesting an end to the payments could be on the cards in the chancellor's next budget.

Mr Mackay said ending the "anomaly" would make "a real difference" to frontline services

Mr Mackay said: "We have repeatedly called on the UK government to end the glaring disparity in the way that VAT affects emergency services across the UK, with Scottish police and fire services facing £35m of unnecessary annual costs which other territorial services do not have.

"This is unacceptable and I will be pursuing with the chancellor whether the reports he has changed his mind are true or simply more mixed messages from the UK government.

"We have repeatedly made clear that the financial support we are providing for our frontline emergency services would go much further if Police Scotland and the Scottish Fire and Rescue Service were able to recover VAT.

"Any move to end this would be welcome - it would make a real difference to frontline services in Scotland."

A UK government spokeswoman said: "Before the Scottish government made the decision to make Scotland's police and fire services national rather than regional bodies, they were told this would mean that Scottish police and fire services would become ineligible for VAT refunds.

"They pressed ahead with the changes fully aware of the implications. There has been absolutely no change in this position."