Pat Watters, Chair of the Scottish Fire and Rescue Service (SFRS) Board has welcomed the latest move from MPs to challenge the Value Added Tax (VAT) levy placed on SFRS and Police Scotland by HMs Treasury since the inception of the two national, emergency services in 2013.
Regional services were previously able to reclaim VAT paid on goods and services but the tax break was removed because of the new, national status following the Police and Fire Reform (Scotland) Act 2012, which legislated to merge the eight separate police and fire services into single, national organisations. Treasury ministers stated that neither organisation would be able to continue to reclaim VAT as they are classed as central government bodies as opposed to being funded through local authorities.
Pat Watters said:
SFRS is the only fire and rescue service in the United Kingdom which carries an additional 20% tax burden for the privilege of providing an emergency service to the people of Scotland.
VAT stands for Value Added Tax but I can not begin to see where paying an expected c.10 million this year alone in tax to HMs Treasury adds value. The people of Scotland should not have to pay this additional tax and they will rightly be concerned by the impact this might have in the longer term on our ability as a Service to protect the frontline and ensure the highest standards of service delivery across the country.
The latest “Reasoned Amendment” to the Finance Bill, which will also seek to amend the legislation in the Committee stage to address the problem of VAT on our emergency services and to bring about an ability to reclaim VAT for the fire and police services in Scotland, is to be commended.
The on-going burden of VAT is a matter of real concern. We are the only fire and rescue service in the UK, which is unable to reclaim the VAT on the goods and services we require to carry out the functions of our Service, and I think that is unfair. This year, that burden is circa 10 million to our organisation which I think anyone would agree is a fairly astronomical sum of money, particularly when you consider the reform process we are going through has been designed to provide better value to the public.
I will continue to push for change to bring an end to this iniquitous tax penalty.
The issue of SFRS and Police Scotland being the only blue light services in the UK unable to reclaim VAT was raised during yesterdays debate in Westminster on the Finance Bill https://www.publications.parliament.uk/pa/cm201516/cmagenda/fb150720.htm
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