Police and fire VAT

The £35 million annual VAT cost faced by Scottish police and fire services in contrast to other territorial police and fire services in the UK, will be raised by Finance Secretary Derek Mackay at a meeting of UK finance ministers today.

Mr Mackay has previously written to the Chancellor pressing the UK Government to bring their VAT status into line with all other UK emergency services, and will raise it again with the Chief Secretary to the Treasury, in Edinburgh later today. 

Mr Mackay said:

“We want to invest in our emergency services and make our communities safer.  This commitment includes protecting the police resource budget in real terms in every year of this Parliament – a boost of £100 million by 2021. We also recently announced a further £25 million of reform funding in 2017-18 to support Police Scotland meet changing demands and we are investing £294 million in the Scottish Fire and Rescue Service in 2017-18, supporting its essential work to protect Scotland’s communities.

“However our police and fire services continue to face £35 million of unnecessary annual costs through VAT that they simply should not have to pay. This is a significant sum which other emergency services do not have to meet.

“There is a significant difference in the way VAT affects emergency services across the UK, with Scottish police and fire services paying VAT when other territorial services in the UK do not have to. There needs to be a level playing field for such essential services.

“As we continue to invest in our emergency services we will continue to press the UK Government for Scottish emergency services to have the same ability to recover VAT as all other British and Northern Irish Forces.”
 
Background

Derek Mackay will host the Finance Ministers Quadrilateral in Edinburgh with Chief Secretary to the Treasury David Gauke, the Welsh Government’s Finance Secretary Mark Drakeford and Stormont Finance Minister Máirtín Ó Muilleoir.