David Torrance (Kirkcaldy) (SNP): To ask the Scottish Government how much Police Scotland and the Scottish Fire and Rescue Service have paid in VAT that they have not been able to claim back. (S5O-01080)
The Cabinet Secretary for Justice (Michael Matheson): The amount of unrecovered VAT paid by the Scottish Police Authority and the Scottish Fire and Rescue Service between April 2013 and March 2017 is of the order of £140 million. We will continue to press United Kingdom ministers over the disparity, which could see a cost to the Scottish public purse of £280 million by the end of the current parliamentary session in 2020-21.
David Torrance: Does the cabinet secretary agree that, as the UK Government has changed the rules to enable academy schools and Highways England to reclaim VAT, it is reprehensible that it refuses to make the same change for vital emergency services in Scotland, which would bring them into line with emergency services in other parts of the UK?
Michael Matheson: I whole-heartedly agree with David Torrance on the matter. The UK Government could very easily change the rules to enable Police Scotland and the SFRS to recover VAT. It has shown that, where there is a political will, the Value Added Tax Act 1994 can be amended to permit new bodies to recover VAT. The member referred to a couple of examples of that. Since Police Scotland and the SFRS were created, a range of bodies have been included in the 1994 act, which allows them to recover VAT. Those bodies include Health Education England, the Health Research Authority, the strategic highways company—Highways England—the London Legacy Development Corporation and academy schools. In my view, if it is good enough for all those organisations, it is good enough for Scotland’s emergency services.
Link to the Scottish Parliament Official Report