Top
 

tax Tag

The NFF is delighted that Defence Secretary Gavin Williamson has announced his intention to counter the Scottish Government’s income tax rise that affects thousands of Naval Service personnel in Scotland.

 

This issue was raised with us by many Naval Service families located in Scotland and we advocated on their behalf to the MOD and Government. We are pleased that they have listened.

 

On 21 February 2018, the Scottish Parliament ratified their income tax rates and thresholds applying to Scottish taxpayers. As a result those Service personnel earning more than £26,000 would pay more tax in comparison to their counterparts in the rest of the UK. Scotland plays a key role in the defence of the UK and its contribution is set to increase. Some 1,400 submariners will move to HM Naval Base Clyde by 2020, creating the new single home of the entire UK Submarine Service.

 

Update

Since this article was published in March 2018, a new compensation scheme has been announced in Mid-July 2018 for those who are affected by the increase in Scottish tax rates. For further information on the scheme and our comment, visit here.

 

Posted on: 13th March, 2018
Updated on: 9th August, 2018

Universal Credit is gradually being expanded across the country, so what is it and how might it affect you?

It is a single monthly payment that will eventually replace some of the benefits and tax credits you may have claimed previously. The aim is to provide personalised support to help people into work, and also to encourage those that are in work to earn more.

It’s available in every job centre across the UK.

You and your Service person may be entitled to it, even when you’re temporarily posted overseas.

How does is work?

When you apply you’ll be asked for your postcode and directed to the right service to complete your claim online.

As part of your claim, you’ll be expected to take active steps to prepare for and be available for work. This will involve agreeing to a programme of activities tailored to your individual circumstances and skillset by a work coach. You’ll be asked to complete and accept a claimant commitment.

Your claim can remain open, even when you move into work. This means you can work as many hours as you want or take on short contracts to build up experience. As your earnings increase, your Universal Credit payment will reduce at a steady rate so you won’t lose your benefits all at once.

Already employed or actively seeking work?

Universal Credit can also help to cover 85 per cent of your eligible childcare costs.

If you and/or your partner are responsible for paying rent for the home you live in (not Service Family Accommodation or Substitute Service Family Accommodation), or if you have a mortgage, you may qualify for help in the form of Universal Credit housing costs. This is all part of the single monthly payment you receive, and means you don’t need to apply separately to the local authority.

Grow your business

If you decide to become self-employed after you’ve made a claim, Universal Credit will provide support to help you grow your business.

If you are currently self-employed, and your business has been running for more than 12 months, a ‘Minimum Income Floor’ (MIF) – an assumed level of earnings – will be applied to your claim.

If your self-employed earnings are below the MIF, it will be used to work out your Universal Credit award instead of your actual earnings.

If you’re already claiming Universal Credit and are moving, you’ll continue as you were and advice will be given on how and when the move might affect your claim.

Find out more here.

Posted on: 31st August, 2017

It was announced in 2016 that spouses and civil partners of Service personnel will be able to apply for a new type of National Insurance (NI) credit to protect their State Pension (if they have accompanied their partner overseas).

 

Former Defence Secretary Michael Fallon said:

“We are making sure that military spouses and partners who spend time based overseas get the State Pension they deserve.  This is the latest step under the Armed Forces Covenant to ensure that service personnel and their families are treated fairly.”

 

How do you know if you’re eligible to apply for the new credits?

Service spouses and civil partners will be eligible to apply for the new Class 3 NI credits if they:

• Reach State Pension age on or after 6 April 2016, that means they were born on or after 6 April 1953 (if a woman) or 6 April 1951 (if a man); and

• Are or have been married to /in a civil partnership with a member of the Armed Forces; and

• Have accompanied their spouse or civil partner on a deployment outside the UK at any time since 6 April 1975; and

• At the time of the posting their spouse or civil partner must have paid, been treated as having paid or been credited with UK National Insurance.

You can still apply if you are now widowed, divorced or have had your civil partnership dissolved, provided you were married or in a civil partnership at the time you accompanied your partner abroad. Some Service spouses or civil partners who meet the above criteria will not have a gap in their NI records and so will not need to apply for the new credits. For example, you may not have a gap if you:

• were working in a job during the accompanied assignment where you paid UK NI contributions;

• were self-employed and paying self-employed Class 2 NI contributions throughout the accompanied assignment;

• received certain benefits such as Employment and Support Allowance (previously called Incapacity Benefit or Invalidity Benefit) or Child Benefit for the whole of the accompanied assignment(s)outside the UK.

 

How do I apply? 

You can apply for the new Class 3 NI credits anytime from 6 April 2016. There is no time limit in applying for the credits, although if you apply after you reach State Pension age any increased State Pension might not be paid for periods before the date of your application. For information about applying for the new Class 3 credit visit here.

 

The Class 1 NI Credit: A wider range of benefits for deployments since April 2010 

The new Class 3 credits do not replace the existing Class 1 NI credit for those who have accompanied a partner on a posting since April 2010, and which contribute not only towards entitlement to new State Pension, but also towards Employment and Support Allowance, Jobseeker’s Allowance and Bereavement Benefits (to be replaced for new claimants by Bereavement Support Payments in April 2017).

 

More information 

Further information about NI credits for Service spouses and civil partners is available online here.

 

Posted on: 12th May, 2016
Updated on: 4th January, 2019