Chancellor Philip Hammond has confirmed he will scrap the requirement for the police and fire service in Scotland to pay VAT – insisting people north of the border should not lose out because of the “obstinacy” of the Scottish Government.
Police Scotland and the Scottish Fire and Rescue Service have had to pay the levy since they were created in April 2013, and are the only such services required to do so.
Mr Hammond said SNP ministers had been aware the two organisations – formed with the merger of the previous regional forces – would be subject to the charge.
But, delivering his Budget to MPs in the House of Commons, the Chancellor said he had been “persuaded” by the 13 Scottish Tory MPs elected in June to axe the charge from April 2018.
Mr Hammond said: “The SNP knew the rules, they knew the consequences of introducing these bodies and they ploughed ahead anyway.
“My Scottish Conservative colleagues have persuaded me that the Scottish people should not lose out because of the obstinacy of the SNP government.”
He also announced the Scottish Government would be in line for £2 billion more cash as a consequence of spending decisions made in the Budget.
Scottish Tory leader Ruth Davidson said on twitter that her party was “cleaning up the SNP’s mess when it comes to police and fire service VAT payments”.
The decision to scrap VAT payments for the police and fire services in Scotland comes after sustained calls from the Scottish Government.
But SNP ministers also want the Chancellor to refund the £140 million the two organisations have paid so far.
First Minister Nicola Sturgeon said the move was “long overdue”, adding that it was “an absolute disgrace that it has taken the UK Government so many years to do the right thing here”.
She said: “Police Scotland and the fire service in Scotland should never have been paying VAT and they are the only emergency services in the UK that do so.”