This article, by my tax expert contact, summarises some of the special tax rules that might apply to members of the armed services... Income tax on salary or wages Your salary and wages should be subject to tax in the same way as civilians. However, if you are currently serving overseas, the extra overseas allowance you receive will be exempt from tax. This should be automatically taken into account when your salary is paid to you. The quid pro quo is that your basic pay will be taxable in the UK - even if you are abroad for so long that you would otherwise be treated as non-resident for tax purposes. However, under an agreement made by the Government, you should not have to pay tax in the country to which you are posted. Normally, if your employer were to pay for travel from your place of work to home (or vice versa) tax would be payable in respect of the amount paid. However, a concession exists in respect of any travel facilities, travel vouchers or travel warrants provided for members of the naval, military or air forces of the Crown going on, or returning from, leave. The exemption applies whether or not the payment relates to a particular journey. So this would mean that you could use the payment to fund a week's touring rather than return home to see your family. Under the strict letter of the law, employees are normally liable to pay tax on any meals provided to them by their employers. Whilst a concession exists for most work-place canteens, there is a formal exemption for members of the armed services. This exemption extends to cover meal allowances that may be paid in lieu of meals in a mess. Tax relief for members of overseas forces If you are stationed in Britain as a member of another country's forces, you will not be liable to UK tax on your salary or wages. Similarly, any time spent in the UK as a result of your official duties will be ignored when determining whether or not you are UK resident for tax purposes. Reservists If you are a reservist, you are not liable for either income tax nor National Insurance contributions in respect of any "training expenses allowances" you may receive. As far as reserve pay is concerned, a simplified version of PAYE should operate allowing tax to be deducted at the basic rate (currently 22%) or you might have no tax deducted. If you have no other taxable income, you can ask for no tax to be deducted from your reserve pay. If you do have other taxable income, you might prefer to have tax deducted from your reserve pay. However, you should note that under the strict law, you cannot require this.