TaxPersonal TaxRevenue ’embarrassed’ over soldier tax

Revenue 'embarrassed' over soldier tax

The Inland Revenue and Ministry of Defence have been 'exceedingly embarrassed' by revelations that thousands of army soldiers' disablement pensions have been wrongly taxed for the past 50 years.

Payments from army pensions were supposed to be exempt – Navy and RAF pensions are not subject to a tax deduction – and fears are emerging that some people, whose refunds will stretch back over 50 years, could be entitled to large sums ranging from £30,000 to £100,000.

Every soldier who was injured and as a result pensioned out of the army during wars ranging from the Korean War right up to the Gulf War may be affected.

Defence minister Lewis Moonie, said those affected will not lose out, but the Inland Revenue is only obliged to make tax repayments going back six years, so the question of who is going to repay the tax for the earlier years remains unanswered.

PKF tax technical manager Stephen Nixon said it was probable the pensioners would claim off the Ministry of Defence, what could not be obtained from the Revenue.

He added: ‘This situation is quite extraordinary. Normally such situations would be found in Revenue PAYE audits. The situation is exceedingly embarrassing.’

Related Articles

Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

1m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

3m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

4m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

5m Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

6m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

6m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

8m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

9m Emma Smith, Managing Editor