- Alfie Baron
On the 1st April 2013 Police Scotland came into force.
On 21st June 2012 Kenny MacAskill MSP, the Scottish Government's Cabinet Secretary for Justice, wrote to David Gauke MP, Exchequer Secretary to the Treasury.
Kenny MacAskill stated: "Our officials have been discussing for some time the VAT status of the proposed Scottish Police Authority (SPA) and Scottish Fire and Rescue Service (SFRS). I understand that you have decided that you are not prepared to allow the new bodies to recover VAT."
Kenny MacAskill continued: "We have not received any formal reasons for your decision but I understand it is on the basis that the SPA and SFRS will be funded by central government."
This proves that Kenny MacAskill knew at least NINE months in advance that the new, centralised, Police Scotland would not be able to recover VAT.
On 17th July 2012 David Gauke MP, Exchequer Secretary to the Treasury, replied to Kenny MacAskill MSP
Mr Gauke said: "Section 33 VAT Refund Scheme
Thank you for your letter of 21 June 2012 regarding the VAT status of the proposed
Scottish Police Authority (SPA) and Scottish Fire and Rescue Service (SFRS).
The Section 33 refund scheme (s.33) was introduced together with VAT in 1973, following a Ministerial commitment that VAT would not become an additional burden on local taxation. HMRC's published guidance sets out the long-standing criteria for access to the s.33 scheme. Notably, this includes the requirement for an eligible body to be funded directly through local taxation.
The reforms to Scottish police and fire services, which will see responsibility for these services centralised and moved away from local authorities, mean that the new services no longer meet the eligibility criteria for s.33. This was acknowledged repeatedly by the Scottish Government in correspondence with the UK Government and indeed, as set out in the business case for the reforms, the proposed savings from the changes were 'predicated on VAT not being provided for'.
You can read the full correspondence here on the Scottish Parliament website!
In case the online PDF is missing you can also download it here.