AN MSP has challenged Philip Hammond to pay back a £140 million VAT bill to Scotland’s police and fire services.

Unlike their counterparts in the rest of the UK, Police Scotland and the Scottish Fire and Rescue Service must pay the Treasury £35m a year in VAT charges. Holyrood Justice Committee member Ben Macpherson has now challenged the Chancellor to scrap the “unnecessary” annual payment.

The call comes after Westminster changed its rules to allow Highways England and academy schools to reclaim their VAT bills.

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In the letter, Macpherson says the “anomaly” is impacting on frontline services, calling the discrepancy “unjust and wholly unacceptable”.

He says: “As a member of the Scottish Parliament’s Justice Committee, I have heard directly from police and fire officers about their concerns on this matter. It is only fair they have the full funding and resources they are entitled to, like their counterpart agencies across the UK.”

The VAT situation only came about after the country’s regional forces merged into single bodies three and a half years ago.

Removing the charge would allow Police Scotland to cover its entire £21.1m deficit – and leave some cash to spare.

With cost pressures continuing, calls for change have grown to include voices from across the political spectrum. Last week it was reported that Scotland’s 13 Tory MPs have also written to Hammond on the issue.

Responding to a call by Finance Secretary Derek Mackay this summer, the UK Government said Holyrood should have thought ahead when amalgamating the forces.

A spokesperson said: “Before the Scottish government made the decision to make Scotland’s police and fire services national rather than regional bodies, they were told this would mean that Scottish police and fire services would become ineligible for VAT refunds. They pressed ahead with the changes fully aware of the implications.

“There has been absolutely no change in this position.”