Military personnel in Scotland protected from tax hikes
23 July 2018
Further to a hearing by the Public Accounts Committee it has been confirmed that the thousands of troops set to be left out of pocket by tax rises in Scotland, will be protected.
The plans will protect around 8,000 personnel who would otherwise be negatively affected by the income tax hikes. Personnel will be compensated with an annual payment to make sure that all troops, regardless of where they are deployed or where their families are based, will pay the same income tax.
Following the announcement in March of Scottish Government’s tax changes, the Defence Secretary Gavin Williamson ordered work to start on how the Ministry of Defence would mitigate the impact, following concerns that the changes could result in Scotland becoming a less attractive place for military personnel to be posted to.
The measures will protect nearly three quarters of all armed forces personnel liable for Scottish Income Tax and will help with recruitment and retention, particularly as many of those affected are personnel with specialist skills, such as aircraft and submarine engineers.
The financial mitigation measures will:
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Be payable to all regular personnel who pay Scottish Income Tax, regardless of where in the world they are serving. Mitigation payments of between £12 and £1,500 will be paid.
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Cover personnel for tax year 2018/19 and will be a single payment made retrospectively.
The MOD will continue to review the situation each year and make decisions each tax year as to whether the difference between Scottish tax and tax elsewhere in the UK is sufficient to warrant financial mitigation. The annual cost to the MOD for Tax Year 2018/19 is expected to be £4 million.
Further information on these measures can be found on GOV.UK.