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UK Government urged to restore VAT exemption for Scottish emergency services

Published 19/07/2015

Ian Murray said the UK Government has the opportunity to hand Scotland's emergency services a £30 million a year tax break this week
Ian Murray said the UK Government has the opportunity to hand Scotland's emergency services a £30 million a year tax break this week

The UK Government has the opportunity to hand Scotland's emergency services a £30 million a year tax break this week, according to Labour's Scottish MP.

The Scottish police and fire services did not inherit the VAT exemption enjoyed by the old regional forces when they were merged in 2013.

Financial Secretary to the Treasury David Gauke has suggested the exemption could be restored with an amendment to the UK Finance Bill, which receives its second reading on Tuesday.

Labour's shadow Scottish secretary Ian Murray has urged Scottish Secretary David Mundell to reveal whether the UK Government will make the necessary amendments this week.

In a letter to Mr Mundell, Mr Murray said: "I understand that you are currently engaged in discussions with HM Treasury about restoring the VAT exemptions to Police Scotland and the Scottish Fire and Rescue Service, which were lost as a result of the Scottish Government's decision to restructure these services.

"The removal of these exemptions has led to a combined annual tax burden of over £30 million a year, a sum that Scotland's police force and fire and rescue services can ill afford to lose, especially given the growing strain and pressure on front line emergency services in Scotland.

"As you will be aware, both I and my colleagues in the Scottish Labour Party in the Scottish Parliament have been advocating for some time that these exemptions be restored, and I tabled an amendment to the Scotland Bill requiring a review of the current exemption schemes with a view to expediting this process.

"During the committee stage of the Scotland Bill, the Financial Secretary to the Treasury, David Gauke, indicated that the appropriate means of restoring the exemptions would be an amendment to the Finance Bill, the second reading of which takes place next Tuesday. I would be grateful if you could tell me whether such an amendment will be made.

"I would also be grateful for any information you can provide me in regard to the progress of your discussions with HMT."

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