A row has broken out after a Highland MSP urged Chief Secretary to the Treasury Danny Alexander to scrap VAT for Police Scotland.
Independent John Finnie said the £23million paid by the national force would fund the wages of more than 1,000 officers, including about 50 in the north.
But Mr Alexander said the Scottish Government knew that tax laws meant VAT exemption would be lost when it moved from local authority-funded police forces to a national one.
Mr Finnie, a former police officer and a member of the Scottish Parliament’s justice committee, has taken exception to a leaflet issued by Mr Alexander, in which he claims credit for cutting VAT on ski lift passes.
He said none of the 43 police forces in England and Wales, or the Police Service of Northern Ireland, paid VAT.
“I absolutely welcome the VAT cut for ski lifts, but why did Danny Alexander stop there when police support staff across the country, including his own constituency, have lost their jobs because of an unfair tax bill?” said Mr Finnie, who quit the SNP over the party’s position on Nato.
“Mr Alexander knows full well that Police Scotland is the only territorial police service in the UK that pays VAT.
“Every English force, the Police Service of Northern Ireland and even the National Crime Agency are exempt, but not Police Scotland.”
Mr Finnie said that when former education secretary Michael Gove wanted VAT exemptions for academy schools in England, Mr Alexander was able to deliver.
Mr Alexander, who is Liberal Democrat MP for Inverness, Nairn, Badenoch and Strathspey, said the question of VAT lay at the SNP’s door because it had taken the decision in 2012 to centralise the police force.
He said Scottish ministers had been warned that moving from locally-funded to centrally-funded emergency services would mean the loss of the VAT exemption.
“Anyone who attacks the help on local ski operators shows how little they understand about just how important such businesses are to our area,” he said.
“Highland Lib Dems have consistently opposed the centralisation of the police, and this is yet another reason why it is a backward step.”