Defence Online

Military personnel to be remunerated for Scottish tax hikes

Homeland June 24, 2019

A £4million fund from the MOD will refund military personnel after a Scottish tax hike last year.

Over 7,000 soldiers, sailors, and airmen and women who were adversely affected by the Scottish tax hikes last year will receive extra remuneration in their payslip at the end of this month. An average payment of £580 will be reimbursed in the form of a one-off yearly payment which is taxable but will raise the take-home net payments for personnel.

Concerns were raised last year that the Scottish Government’s rise on income tax could make it a less attractive place for military posting. The payments will be given to all personnel who pay Scottish income tax, starting with those who have paid £12 or over and capped for the highest paid officers affected at more than £1,500.

David Mundell, Scottish Secretary, said: “I welcome the MOD making these extra payments to our servicemen and women. Military personnel make a huge contribution to Scottish communities and our economy, and it is unfair for them to be hit in the pocket by the Scottish Government’s decision to make Scotland the highest taxed part of the UK.”

“It is right that the UK Government protects them from this Scottish Government-imposed penalty. The last Scottish Government budget in December 2018 confirmed further divergence between Scottish and UK tax rates and as a result the financial compensation cap for Armed Forces personnel liable for Scottish tax has risen from £1500 to £2200.”

In March of this year, the MOD announced that financial mitigation payments will continue to be made for the 2019/20 tax year. Decisions on financial mitigation for future tax years will be made on a yearly basis.

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armed forces personnel David Mundell finance income tax MOD Scotland Scottish Government