Tax on pension

Discussion in 'Armed Forces Pension Scheme' started by Tiddle, Sep 13, 2010.

Welcome to the Army Rumour Service, ARRSE

The UK's largest and busiest UNofficial military website.

The heart of the site is the forum area, including:

  1. Bit of background:

    I was MD'd in 2008 due to injuries sustained on TELIC, I was awarded a War pension of 20% and a service pension.

    I was told at that time that, due to being in recite of the War Pension, I'd not have to pay tax on my service pension and it has been thus ever since, fast forward until today when I receive a letter from Xafinity that I now pay income tax on my Service Pension and a letter from the Inland Revenue that they are deducting my full pension amount from my Tax Free allowance giving me a Tax Code of 233...

    Does any of this sound "right"? I've phoned APC, the Inland Rev, Xafinity and the Vets agency, each one of each passes me on to another agency meaning I'm going around in fucking circles.

    Any ideas?
  2. Pensions are classed as a benefit - even if you've had no option but to pay it e.g. old age pension (or whatever they call it now!) - and the bastards say you're only entitled to one benefit...
  3. oldbaldy

    oldbaldy LE Moderator Good Egg (charities)
    1. Battlefield Tours

    To not pay tax on your pension you must be awarded a 'Service Attributable pension'.
    If it is, get on to SPVA and get them to tell HMRC to get it sorted.
    Xaffinity are only doing as HMRC are telling them.

    A War Pension is not a guarantee that you are.

  4. I spoke to SPVA and they told me that they wrote to APC in 2008 that I'm on a 'Service Attributable pension' but SPVA refuse to talk ti the IR.... I've asked for a copy of the letter so I can forward it to the IR myself.
  5. oldbaldy

    oldbaldy LE Moderator Good Egg (charities)
    1. Battlefield Tours

    Give the revenue a phone call.
    You'll spend ages on hold but a dam sight quicker than waiting 3 months for your letter to be opened.
  6. I'd love to not pay tax on my service pension, it takes up all of my tax allowance so I get taxed on all of my wages which on my pay statements makes it look like I pay loads of tax.
    thankfully they havent started taxing WP yet(!) its pitiful as it is without losing any of it to the HMRC!
  7. I also receive a "War Pension" for injuries received as a cold war warrior, so you can guess I've been getting it for some time.
    I also receive my Service Pension for doing 22.
    The two are un-connected, neither is dependant upon tother.
    The Service pension is taxable, and the war pension isnt, at least thats my understanding, if someone can prove me wrong I will be very happy so that I can ask the nice man at HMRC for the last 20 years tax back!!
  8. I was medicly discharged at my 22yr point due to an injury whilst on duty
    I get a tax free pension and a war pension
    I also got a letter this year saying I would be taxed at the normal rate on my pension
    a quick phone call to the tax office and it was sorted in minutes
    Good luck
  9. Im a bit confused with this post:

    Am I supposed to be paying tax on my service pension (which I am and have been since I started getting it) or not? I get a P60 to say how much tax Ive paid on it each year, has it changed so now we shouldnt be paying tax or should we have never have paid tax or have some people just not been paying tax and now the HMRC have caught up with them? or do you have a 'Service Attributable pension' and they messed up and tried to tax it?
    Obviously I dont pay tax on my WP.
  10. How many people on here know about their Veterans Advice and Pensions Committee. The committees are appointed by central government and cover every area in the UK (including Ireland). You can find your local contact through the Veterans Agency and they are there to help you. War Pension and Service Attributable Pensions are not taxed whilst Service Pensions are.
  11. Sorry to ask a bone question but what is a service attributable pension and what is not?
  12. I suspect that I might not have the complete answer but I will try!

    A soldier will be in receipt of a War Pension if he was discharged from service as a result of an injury whilst in an operational theatre. I understand that such pensions should not be taxed.

    A soldier will be in receipt of a Service attributable pension if he was discharged from service due to an injury that was received as a result of his service; for example, an injury sustained during training. I understand that such pensions are taxed normally.

  13. oldbaldy

    oldbaldy LE Moderator Good Egg (charities)
    1. Battlefield Tours

    All completely wrong!

    You can claim a War Disablement Pension under the War Pensions Scheme if you are no longer Serving in HM Armed Forces and your claimed disablement arose before 6 April 2005. The injury does not have to be sustained in a war zone. It is not taxed.

    A Service Attributable Pension is awarded when someone is medically discharged and the reason for the injury sustained is attributable to service in the Armed Forces, i.e. on duty. It is not taxed.
    If you have a Service Attributable Pension you should also be claiming a War Disablement Pension however you the opposite is not true, you can be awarded a War Disablement Pension without getting a Service Attributable Pension.
  14. vauxhall

    vauxhall Sponsor

    Oldbaldy is absolutely right it is when the medical discharge is for an injury or condition caused by service that the Service Attributable Pension (SAP) is awarded and it is that combination which attracts tax free status.
  15. One learns something new every day.