PracticeConsultingPolice to challenge £7.6m tax decision

Police to challenge £7.6m tax decision

The police service is preparing to challenge a Treasury decision to prevent national crime bodies from recovering VAT that is set to cost police authorities £7.6m in 2000/01, writes Steve Brown.

The National Crime Squad and the National Criminal Intelligence Service were set up in 1998 and are paid for through a levy on police authorities.

Along with all local authorities, the regional crime squads that preceded the NCS enjoyed section 33 status enabling them to recover VAT on purchases.

But the new bodies were not set up with the same tax privileges.

The VAT ruling has pushed up the levy on police authorities. And according to a report by the police service expenditure forecasting group, which negotiates with the Home Office on behalf of police authorities, the additional cost next year will be some £7.6m.

The group claims this is the equivalent of losing nearly 300 police officers.

With home secretary Jack Straw attempting to bolster police numbers with his new crime fighting fund, any further loss of uniformed staff will be unwelcome.

Accountancy Age understands the Home Office is sympathetic to the service’s point of view. But despite ministerial meetings between the Home Office and the Treasury, the Treasury has so far refused to award the necessary VAT status.

A judicial review of the decision is now being sought by the two crime bodies and Greater Manchester Police Authority in conjunction with tax advisers Williams Jeffery Barber. It is expected to go ahead in the first part of this year.

Nick Burrows, a senior VAT manager with the consultants, confirmed this week that the consultants were organising a challenge to the decision not to award section 33 status, but refused to comment further at this point.

THE FINANCIAL DIRECTOR INTERVIEW – Not pounding the beat, but still

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer