Compensation planned for Armed Forces paying Scottish income tax

07 June 2018

In a recent hearing by the Public Accounts Committee Lieutenant General Nugee said that for armed forces stationed in Scotland compensation is being planned to equalise pay due to the additional tax that they are paying in Scotland.

The hearing was gathering oral evidence about the skills shortages in the armed forces. The issue of the differing rates of income tax in Scotland to those of the rest of the UK was raised and the question asked if there had been any discussions with the Treasury about easing that burden to ensure that service personnel based in Scotland pay the same level of tax as everyone else in the UK.

Apparently there have been quite lengthy discussions and according to Lt Gen Nugee, who is the Chief of Defence People at the Ministry of Defence, the Secretary of State announced publicly that he wanted an answer within six weeks. The Lt Gen said:

“We are responding to that and have put a number of proposals on the table to the Secretary of State as to how to mitigate the higher Scottish rates of income tax for our people up in Scotland. We are determined to do something for them”, he added, “to make sure that we equalise the tax as much as we can.”