Taxation and the TA
TA pay is taxed in the normal way, at source.
It's normally assumed that all TA soldiers are lower-rate taxpayers, who have used their tax-free allowances in their normal job. This has implications in some cases, which are listed below.
As a general rule, HMRC are required to collect the correct tax and minimise your personal admin. Most TA joiners will have a P46 filled in for them, giving a 'BR' code, but, if you have no other paid employment you should ask that your TA income is classed as your only or main job, so your personal allowances are used against it. This will save you from asking HMRC for your money back at the end of the tax year. It is your responsibility to correctly declare your income to HMRC, so make sure you complete the P46 yourself correctly, don't rely on the pay clerk.
Tax Implications and Special Cases
If you're a student, you will pay tax on your TA pay at 22%, which you can claim back at the end of the tax year, assuming you haven't earnt enough through your bar job/ casual prostitution to take you into a tax-paying bracket. - Or, if you're not a moron you'll fill in a P38 and your tax code will be NT and you won't pay any tax on your TA pay! (Providing you don't earn over £5k and have another job)
If you are paying tax at the "Starting rate" OR earn very little (i.e. less than about £5,000 a year), you will probably be overpaying tax as well. You should therefore reclaim it via HMRC
If you're a higher-rate taxpayer, you will be underpaying tax. Of late, the Inland Revenue or whatever they call themselves now, have taken an unprecedentedly enlightened approach. Unless you're earning £ 100 K, they tend to reckon it's not cost-effective to process the tax returns for the extra £ 20 you might owe them. Check with your local tax office though. The wise man would save the cash, just in case ......
If you are unemployed and claiming benefit, the rules are best discussed with the local DWP office, as they are complex and keep changing. In principle, you are allowed to earn a certain amount averaged over a period of time before your benefit is affected.
In practice, this means you're stuffed when Annual Camp rolls round, but if you are only training a weekend and the odd drill night per month, you may be OK.
If you are "Bono" - start paying tax you tight and greedy b*st*rd
National Insurance
Normally, NI isn't deducted as your TA earnings are averaged over a period of time, and you rarely break the threshold to start paying NI. However, Annual Camp usually takes you into an NI band, and it will be deducted.
If you are already capped for NI as you are disgustingly overpaid in your civvy job, you may be able to claim this payment back at a later date. As you write the claim out, just think of the little old ladies to whom you are denying a hip-operation by your tightfistedness.
