Soldiers hit by SNP tax grab get MoD cash boost
THE Armed Forces are to offer compensation packages to staff in Scotland who will be hit by the SNP’s tax rises.
Defence Secretary Gavin Williamson yesterday confirmed that he plans to give extra cash to the 8,000 Armed Forces personnel who will pay more income tax from next month than if they lived in other parts of the UK.
He announced the measure after senior figures in the Ministry of Defence raised concerns about staff receiving smaller pay packets if they live north of the Border.
Changes to tax policies announced in the Scottish Government’s Budget mean that military personnel in Scotland will pay up to £1,200 a year more than if they were based in England or Wales.
Mr Williamson yesterday confirmed that he will look to mitigate against the negative impact on staff of the SNP’s tax proposals.
He said: ‘The SNP’s tax hike unfairly hits 70 per cent of our brave and loyal service personnel based in Scotland, leaving thousands of them out of pocket. This is wrong.
‘I am working to ensure
that those who are affected do not feel they are being punished by serving in Scotland. We are urgently reviewing how we can counter this unjustified raid on the pay packets of our Armed Forces.’
All Armed Forces personnel who have their main home in Scotland are defined as Scottish taxpayers. in addition, people who were resident north of the border before being deployed abroad are regarded as Scottish taxpayers.
Following the SNP’s budget, everyone earning £26,000 a year or above will pay more tax in Scotland than they would if they lived in other parts of the UK.
it introduced a new 21 per cent tax rate on earnings above £24,000, while an increased higher rate of 41p is chargeable on earnings above £43,430 and a 46p top rate is charged on income above £150,000.
For the Army, it means that everyone from lance corporal level and above will
‘No respect for military staff’
pay more tax if they live in Scotland, while all trained officers in the Royal Navy will pay more.
The gap between Scotland and the rest of the UK varies depending on job and rank. A sergeant in the Army will pay £75 more tax if they live north of the border, rising to £406 for a lieutenant in the Navy, £863 for a lieutenant colonel in the Army, £1,005 for a Navy captain and £1,117 for an Army brigadier.
Scottish Secretary David Mundell said: ‘Our servicemen and women make a huge contribution to the communities and the economy of Scotland.
‘The Scottish Government’s decision to make Scotland the most highly taxed part of the UK means they would be penalised for being stationed here. it’s absolutely right we take steps to address that.’
The number of Armed Forces personnel based in Scotland is set to rise in the coming years, with many of them relocating from other parts of the UK.
between now and 2020, around 1,400 submariners will move to HM Naval base Clyde, which will become the home of the entire UK Submarine Service.
Army numbers are also increasing with the return of troops from Germany.
An additional 400 personnel will move to RAF Lossiemouth in Moray as it adds a fourth Typhoon squadron and prepares to receive the entire UK fleet of nine submarine hunter Poseidon P-8 maritime patrol aircraft from the early 2020s.
Kirstene Hair, Conservative MP for Angus, said: ‘Yet again the UK Government is having to clear up the SNP’s mess. This hike on taxation is unwanted and unnecessary. it’s clear the SNP has no respect for military staff and no respect for people who work hard to do their best for their family.’
Douglas Ross, Tory MP for Moray, said: ‘it’s a relief the UK Government is taking this approach, but it’s one which should never have been required.
‘The Nationalists’ high-tax approach will punish hard work and damage Scotland’s economy.’
A Scottish Government spokesman said: ‘Keith brown, Cabinet Secretary for the economy, Jobs and Fair Work, wrote to the Defence Secretary in February with an offer to consider constructive proposals by the UK Government to address the differential taxation of military personnel.
‘He was clear that any proposals must respect the Scottish Government’s income tax policy, and in particular should not disadvantage those earning under £26,000 who will pay less under our income tax proposals than they would under tax rates applicable in the rest of the UK.
‘it is disappointing that no response has yet been received. The new starter rate we are proposing, combined with an increase in the personal allowance, will result in 70 per cent of all income taxpayers paying less tax than they do this year for a given wage, and 55 per cent of Scottish income taxpayers will pay less tax than people earning the same amount and living in the rest of the UK in 2018-19.
‘We are fully committed to supporting the Armed Forces community.
‘Service provision varies in different parts of the UK and Scotland continues to be an attractive place to live, work and do business, with access to many services not available elsewhere in the UK such as free school meals, personal care, prescriptions and eye tests, and university tuition when they are ordinarily resident.
‘The definition of who is a Scottish taxpayer is set out in UK legislation and is a matter for HMRC.’