New guide published for armed forces personnel to manage their complex tax affairs

The Low Incomes Tax Reform Group (LITRG) has produced a printable guide and website material to assist serving personnel, veterans, their families and advisers to check that they are paying the correct amount of tax.

It is part of a wider HMRC project with LITRG and aims to give better taxation advice to this group of taxpayers.

Due to the nature of their work armed forces personnel are paid special allowances some of which are taxable and some are not. In addition, there are special arrangements between the Ministry of Defence (MoD) and HMRC to ensure that the tax due on certain payments is not paid directly by the personnel but by MoD. This can be very confusing both for the personnel involved and their advisers.

Many personnel are posted overseas for differing lengths of time either by themselves or with accompanying partners and family, resulting in queries on what income is taxable in the UK and the effect on any possible claims to state benefits in the UK.

Some personnel may be able to make claims for extra tax relief where they have used their own vehicles for armed forces business.

Even after leaving the armed forces, there are special arrangements in place with regard to pensions and, in particular, any payments made due to injury or disability.

Anthony Thomas, LITRG chairman, said:

“While you are employed in the armed forces you are busy and tax may seem like something your employer takes care of. Unfortunately, this is not the whole story.  You are responsible for your own taxes and need to understand how the tax system works as well as your particular rights and responsibilities.

“Our guide covers all of the above topics as well as showing how to check the amount of income tax paid, how to claim allowances such as the marriage allowance and how to claim tax back from HMRC.”

Notes for editors

1.             The guide may be viewed here.

2.             In addition to the above LITRG has placed more detailed information on its website.

3.             Low Incomes Tax Reform Group

The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 17,600 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk (Out of hours contact: George Crozier, 07740 477 374)