A new compensation scheme has been announced for military personnel affected by increases in Scottish tax – an issue that was flagged up by the Naval Families Federation.
When Scotland’s new income tax regime came into force earlier this year, anyone who lived in Scotland and earned more than about £26,000 started paying more income tax than they would do if they lived elsewhere in the UK.
It is thought that around 8,000 serving personnel fall into that category.
When the Scottish government first announced its ‘progressive’ system, the Naval Families Federation acted on behalf of Naval Service families and conveyed their concerns to Defence ministers.
We firmly believe that serving personnel north of the border should not be worse off than colleagues who are posted elsewhere, and that all should be treated equally.
The NFF is delighted that the MOD has listened and responded with the new scheme of ‘mitigation payments’ announced by Defence Secretary Gavin Williamson today, which will see affected personnel receive a compensation payment ensuring all serving people effectively pay the same rate of tax, wherever they work, in the current tax year.
Only Regular personnel whose main place of residence is in Scotland and who are worse off by a minimum of £12 a year will be eligible, while a cap of £1,500 has also been set.
The payment will be retrospective, ie paid after the end of the 2018-19 tax year, and the scheme will be reviewed on an annual basis by the MOD. More details of this year’s scheme will follow later in the year.
This is a great example of how the NFF acts as a bridge between our community and the Government to promote equality for you and your family. We will continue to monitor changes in policies to act on your behalf.
For those in the Armed Forces, details are available in a Defence Internal Brief, serial number 2018DIB/08.
You can access BBC’s news article on the compensation scheme here.