The Scottish National Party yesterday repeated its call for the UK government to end the “anomaly” that sees Scotland’s police and fire rescue services paying VAT.

The SNP submitted a failed amendment to the Finance Bill during its second reading yesterday which would have resolved the situation whereby Police Scotland is the only police force in the UK that pays VAT.

The emergency services became liable for VAT after the Scottish Government centralised them into single national forces, which made them ineligible for the long-standing VAT relief for local police and fire rescue services.

Police Scotland is liable for an annual cost of around £23 million and the Scottish Fire and Rescue Service is liable for an annual cost of around £10 million.

Speaking as the Finance Bill was debated at Westminster, SNP Treasury spokesperson Roger Mullin said: “Today I am once again calling on the Chancellor to remove the VAT liability on Scotland’s Police and Fire and Rescue services to end an anomaly - and look again at exempting those services from the burden of VAT with suitable backdating. It is simply unfair as it is.”

He launched an attack on Chancellor of the Exchequer George Osborne, claiming that he has “failed to address the challenge of productivity and he has continued crude and brutal attacks on the most vulnerable in society with further austerity cuts”.

Mr Mullin added: “The SNP has called for the devolution of the levers of economic power to Holyrood to help grow the economy, create jobs and have proper control of welfare powers - as was promised in the Smith Commission.

“So far the Tories have failed to live up even to the spirit of Smith.”

Though no explicit concession has been made, Scottish Secretary David Mundell has previously hinted that the government could amend its Scotland Bill at third reading to create a VAT exemption for the two national forces.