Scottish police and fire authorities will no longer receive VAT refunds under the new system of unified services potentially costing the Emergency Services nearly than £40m a year.

Regional police forces and fire brigades are currently exempt from charges but Treasury minister David Gauke has said this exemption will end from April 2013 when the single forces come into effect.

Mr Gauke told Unison that "following the Scottish government's planned reforms, neither the new police authority nor the fire and rescue service will be eligible for VAT refunds under Section 33 of the VAT Act 1994."

The move has angered union leaders who say the Scottish government knew from the outset of the bill process that reforms would result in the loss of VAT exemption.

ACPOS president Kevin Smith raised the issue in last month's Scottish Parliament, warning that extra VAT payments may lead to job losses, a prospect the government has strongly denied.

"It is not the case that the loss of the current exemption would result in job losses as Unison suggests, because we have costed our Outline Business Cases for Police and Fire reform responsibly, assuming the worst-case scenario that VAT would have to be paid," said a spokeswoman for the Scottish government.

"The figures show that, even with a VAT payment, a single police service will deliver estimated savings of £1.4bn over 15 years, more than the other options.

The move comes as an online petition to stop the Yorkshire Air Ambulance (YAA) paying VAT on its fuel has moved a step closer to Parliament - read the full story onwww.ambulancenews.comPosted 15/03/2012 by richard.hook@pavpub.com