To ask the Secretary of State for Defence, how many financial mitigation payments have been made to his Department's personnel based in Scotland in relation to the Scottish rate of income tax; and at what salary level those payments began.
27 April 2021
Since Tax Year (TY) 2018-19, retrospective mitigation payments have been made to those Regular Service personnel adversely affected, by £12 or more, through having to pay higher rates of income tax in Scotland compared to their counterparts resident outside Scotland. Not all Service personnel meeting the residency requirement for paying Scottish income tax serve in Scotland, and not all those who serve in Scotland are resident there for tax purposes.
So far, the Ministry of Defence has made just over 14,000 mitigation payments covering TYs 2018-19 and 2019-20. These have been triggered where gross taxable earnings (i.e. not just pay) have been £27,200 or more in TY 2018-19, or £28,193 or more in TY 2019-20. Payments covering TY 2020-21 will be made in June, to those whose gross taxable earnings have been £28,443 or more.