Armed forces

By Tolley

The following Employment Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Armed forces
  • Regular UK armed forces
  • Reserve and auxiliary forces
  • Members of visiting forces

There are special tax rules that apply to members of the regular UK armed forces, reserve and auxiliary forces, and members of visiting forces.

For all categories of UK service personnel, the basic rule is that all pay, pensions and other income is taxable as employment income, liable to National Insurance contributions (NICs) and subject to PAYE. However, there are some particular exemptions for payments and benefits that would normally appear to be taxable. These are described below. Unless otherwise stated, exemptions for NIC also apply where there is an exemption from tax.

Regular UK armed forces
Food and drink

There is no tax charge or NIC due on the food and drink normally provided to service personnel while they are on duty. If a member of the armed forces gets a payment instead of the food and drink that would normally be supplied to him (and there is a Treasury certificate confirming that is what the allowance is for), that allowance will be tax-free too.

Similarly, there is no tax charge or NICs on payments that the Treasury certify as being contributions to a mess.

ITEPA 2003, s 297; SI 2001/1004, reg 143
Operational allowance

If a member of the armed forces is deployed on operations outside the UK, he may receive an operational allowance in addition to his normal pay. The operational allowance is exempt from income tax.

ITEPA 2003, s 297A
Travel to and from leave

Normally, if the employer meets the cost of travel between home and the workplace, this is taxable as a benefit. However, there is a specific exemption for any travel provided or paid for by the employer to enable a member of the armed forces to travel home on leave, or back to his place of operations

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