Tommy Sheppard

MP for Edinburgh East

UK Government must end Police & Fire VAT Anomaly

UK Government must end Police & Fire VAT Anomaly

On the 21st July, I backed the SNP's call for the Treasury to look again at exempting the Scottish Police and Scottish Fire and Rescue Service from a continuing VAT anomaly. Police Scotland is the only police authority in the UK unable to recover VAT and is liable to an annual cost of around £23 million. The Scottish Fire and Rescue Service is similarly disadvantaged, and is liable for an annual cost of around £10 million.

My support was added in the debate on the Finance Bill:

"I also want to ... ask the Minister to examine in the context of this Bill the serious value added tax anomaly that has built up in Scotland with our police and fire and rescue services. There is an opportunity to remove this anomaly whereby the forces in Scotland are the only ones in all of these islands that have to pay VAT. Police Scotland has to pay £23 million a year to the Exchequer. That is extremely unfair and it places a great burden on that service. The money would be better spent on police officers on the streets defending us against crime. Given the Government’s apparent commitment to doing something about crime in our society, I hope they will take that on board. If Ministers cannot deal with this point in today’s debate, perhaps they will at least give an undertaking to look into it as the Bill goes to Committee."

Moray’s MP Angus Robertson also made a statement on the issue saying the situation where Policing and Fire and Rescue Services is devolved to the Scottish Parliament but the UK Government won’t treat them the same for tax purposes as other police and fire services is ridiculous and discriminatory.  In effect, taxpayers across Scotland are being short changed as the UK Government takes tax back that is not demanded of other forces outside Scotland.

 Mr Robertson said:

“The VAT anomaly that sees the Scottish Fire and Rescue Service and Police Scotland pay tax the Treasury that no other police and fire services pay must end. The Chancellor needs to look again at exempting those services from the burden of VAT with suitable backdating. It is simply unfair as it is.  Currently more than 30 million pounds is handed back to the Treasury because of this unfair tax setup. It is simply equivalent to a backdoor budget cut for Scotland and it is discriminatory to taxpayers here in Moray and across Scotland.  Not only does it take money directly from our emergency services but it also adds administrative pressure for those having to process these tax payments.  This is an issue of fairness and we are pushing the UK Government to act urgently to sort this issue once and for all."

Tommy appears on Radio 5live
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