Armed Forces Paying additional Tax in Scotland - who chooses place of residence?

#1
I just read a letter in Solider Magazine May 18 edition, in which I found something of interest.

In said letter, Mr Name and Address Supplied pointed out they would not have put Scotland as a posting preference, had they known they would pay more tax there. Apparently rates are different - good old Sturgeon. Any hoo, the author asked about considering an allowance (like London) etc to cover the costs.

It was the reply of the Brigadier OiC Fob Offs that got my attention:

"It is important to note that the new rate only applies if you are identified as a Scottish taxpayer, which is based on your place of residence and is determined by HMRC."


My point is this: How/why are HMRC able to do this in Scotland - but you pay standard UK tax when posted overseas - Cyprus, Gib etc? There are several places where you are there the same length as a tour in Scotland, but you are taxed as a UK resident, even if they have favourable tax rates.

I remember discussions with people in HERRICK on long tours - year plus - where they explained why they couldn't remain out of the country for the duration and be regarded as non-dom or whatever- but I can't reconcile this.

Why should you pay a local rate of tax in Scotland, which is higher, if you don't pay a local rate of tax in Gib/Cyprus/Europe etc, which might be lower?
 
#2
Each time you move on Assignment you are “supposed” to notify HMRC of your new private address, if that were to be a Scottish one your tax code would receive an S prefix and Scottish rates would be applied. Like many service personnel after 20 years I realised that HMRC thought my address was RMAS and I then informed them of my correct address.
Whether the MoD will inform the HMRC of those assigned to Scottish pids is a moot point, normally tax is a personal matter but failure to notify might be considered as bringing the Army into disrepute or as tax evasion. Your personal arrangements may make a difference as those serving unaccompanied “may” not be considered to be Scottish residents. To complicate matters only earned income is subject to Scottish rates of tax, unearned income is taxed at standard UK rates.
 
#3
Your "address" is where you consider yourself to be living permanently.

For the RN and RAF this tends to mean where your private house is, vice your SFA or SLA/Mess is. For hte Army, with less private ownership, this might mean that the Mess is where you live "permanently". However, I would point out that it might be advantageous to have a "Scottish" address if you are looking to send your kids to university etc, likewise prescription charges et al for your family.
 
#4
Worth mentioning that it is only the higher rate of tax in question. Your average squaddie is not going to be affected.

Good point about Unis and prescriptions.
 
#5
As a member of the UK armed forces you pay UK tax on your UK forces pay regardless of location. That includes Scotland, and the only difference regarding Scotland is that UK legislation permits Scotland to vary the rate, which that devolved government is now doing for the first time.
 
#6
As a member of the UK armed forces you pay UK tax on your UK forces pay regardless of location. That includes Scotland, and the only difference regarding Scotland is that UK legislation permits Scotland to vary the rate, which that devolved government is now doing for the first time.
Hackle that is true, the problem is that HMRC does not know the domicile of most soldiers.
 
#7
Each time you move on Assignment you are “supposed” to notify HMRC of your new private address, if that were to be a Scottish one your tax code would receive an S prefix and Scottish rates would be applied. Like many service personnel after 20 years I realised that HMRC thought my address was RMAS and I then informed them of my correct address.
Whether the MoD will inform the HMRC of those assigned to Scottish pids is a moot point, normally tax is a personal matter but failure to notify might be considered as bringing the Army into disrepute or as tax evasion. Your personal arrangements may make a difference as those serving unaccompanied “may” not be considered to be Scottish residents. To complicate matters only earned income is subject to Scottish rates of tax, unearned income is taxed at standard UK rates.
All this is splendid but doesn't go any way to suggest why anyone overseas can't count that as their new private address and get taxed accordingly. And if there is a legit reason, why Scotland is an exemption.
 
#8
As military personnel stationed in Scotland entitled to free prescriptions and the other freebies that those in England have to pay for?

Will service children get a free university place?
 
#9
All this is splendid but doesn't go any way to suggest why anyone overseas can't count that as their new private address and get taxed accordingly. And if there is a legit reason, why Scotland is an exemption.
It is simple if you spend more than 183 day’s living in Scotland then you are Scottish domiciled and should pay Scottish tax.
 
#10
As military personnel stationed in Scotland entitled to free prescriptions and the other freebies that those in England have to pay for?

Will service children get a free university place?
If they can prove they are and have been Scottish domiciled
 
#11
All this is splendid but doesn't go any way to suggest why anyone overseas can't count that as their new private address and get taxed accordingly.
AIUI its because, by working for a UK employer, intending to return to the UK at the end of a tour and (possibly) leaving their family in the UK they haven't broken UK residency. The Scottish question is an entirely new situation & they're making it up as they go along
 
#12
It is simple if you spend more than 183 day’s living in Scotland then you are Scottish domiciled and should pay Scottish tax.
It's slightly less simple. If you spend 123 days living in Scotland, 121 days living in England/Wales and 121 days living in NI, then you should be a Scottish taxpayer.
 
#14
AIUI its because, by working for a UK employer, intending to return to the UK at the end of a tour and (possibly) leaving their family in the UK they haven't broken UK residency. The Scottish question is an entirely new situation & they're making it up as they go along
It was just the same for the Poll Tax, I was at Craigiehall 6 months before it was introduced to Scotland, asked for guidance and got none. Eventually the red tab DCOS and I were allowed to negotiate with Lothian Regional Council about how it was to be applied to local soldiers and extended to those around Scotland.
 
#16
As military personnel stationed in Scotland entitled to free prescriptions and the other freebies that those in England have to pay for?

Will service children get a free university place?
I thought service personnel got free prescriptions anyway.

Just looked it up and service personnel fulfilling a prescription at Lloyds don't pay as Lloyds get payment from the MOD. Go to a different chemist and you pay but get a receipt to claim the money back.
 
#18
The SNP have introduced a number of intermediate bands which will affect quite a few people.
33k I think is limit for paying more, which is all stripeys and few Cpls on Supp 3.

Any one know if those squaddies earning less, benefit from the tax cut?

Edited to add the word squaddies.
 
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#19
33k I think is limit for paying more, which is all stripeys and few Cpls on Supp 3.

Any one know if those earning less benefit from the tax cut?
I think there's a few sweet spots where people pay less than they would under EWNI tax rules, depending on where you sit in the new tax bands.
 

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