This may turn into a salutory lesson for me and a useful warning to those who are approaching the end of their service! I left the Army in 2003 on completion of 22 years service. I now have a pretty decent job which pays rather well. The company I work for has PAYE and I tended not to look too closely at my tax each year. (Foolish??) That changed today when I had a little think and I suspect that I have underpaid my tax by as much as Â£1300 per year for the last 2-3 years. Both my AF Pension tax and my salary tax are administered from the same tax office but I have a suspicion that my tax is not being calculated taking both incomes into account. I spoke to a collegue who is ex-RAF and he said the same thing happened to him and he got hit with an Â£18,000 tax bill. I am now worried and think I should write to my tax office and clear this up sooner, rather than being hit with a big bill 2 or 3 years down the line. Has anyone else encountered this problem and how was it resolved? If you are leaving soon and think you may hit the 40% threshold, make sure you keep a close eye on things before they get out of hand!