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The 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.

Introduction

This guide is part of a wider HMRC project with the Low Incomes Tax Reform Group (LITRG) and aims to give better taxation advice to this group of taxpayers.

The Armed Forces project

Due to the nature of their work, armed forces personnel are paid special allowances, some of which are taxable while 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 the 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.

There are special arrangements in place with regard to pensions after personnel have left the armed forces and, in particular, any payments made due to injury or disability.

LITRG message to members of the armed forces

The LITRG points out that when people are employed in the armed forces, they are busy, and tax may seem like something their employer takes care of. Unfortunately, this is not the whole story. As a member of the armed forces, you are responsible for your own taxes and need to understand how the tax system works as well as your particular rights and responsibilities.

The LITRG 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. 

Useful links

LITRG guide for the Armed Forces
Armed Forces and tax section of LITRG website