Yesterday Phillip Hammond announced that the Scottish Fire and Police service would no longer pay VAT.
Announcing the change in Wednesday’s budget statement, Hammond said: "The SNP knew the rules, they knew the consequences of introducing these bodies, and they ploughed ahead anyway.
"But my Scottish Conservative colleagues have persuaded me that the Scottish people should not lose out just because of the obstinacy of the SNP government.
"So we will legislate to allow VAT refunds from April 2018".
The lost revenue will not be refunded however, Nichola Sturgeon call the refusal to backdate the VAT was “disappointing”.
The Chancellor also announced a £2bn increase in the Scottish Government budget.
However Nichola Sturgeon called this 'Smoke and Mirrors' since this is set over a three year period.
Taking to twitter she said;
'taking account of today’s announced changes, next year’s (2018/19) @scotgov revenue budget still facing real terms CUT of £239 million - imposed by the UK government.'
'The Chancellor’s announcement of extra £350m for NHS in England this year translates into net increase in @scotgov budget of just £8m!'
Source: Twitter/ Holyrood