Figures show that the MoD has made just over 14,000 mitigation payments to Armed Forces personnel to offset the higher rate of income tax they pay in Scotland.
This is an increase over previous years figures, which can be found here.
Deidre Brock, MP for Edinburgh North and Leith, asked via a Parliamentary written question:
“To ask the Secretary of State for Defence, how many financial mitigation payments have been made to his Department’s personnel based in Scotland in relation to the Scottish rate of income tax; and at what salary level those payments began.”
Leo Docherty, Parliamentary Under-Secretary of State at the Ministry of Defence, responded:
“Since Tax Year (TY) 2018-19, retrospective mitigation payments have been made to those Regular Service personnel adversely affected, by £12 or more, through having to pay higher rates of income tax in Scotland compared to their counterparts resident outside Scotland. Not all Service personnel meeting the residency requirement for paying Scottish income tax serve in Scotland, and not all those who serve in Scotland are resident there for tax purposes.
So far, the Ministry of Defence has made just over 14,000 mitigation payments covering TYs 2018-19 and 2019-20. These have been triggered where gross taxable earnings (i.e. not just pay) have been £27,200 or more in TY 2018-19, or £28,193 or more in TY 2019-20.
Payments covering TY 2020-21 will be made in June, to those whose gross taxable earnings have been £28,443 or more.”
According to the BBC, people across Scotland who earn more than £24,000 pay 21% under the Scottish tax system. Higher (£43,431 – £150,000) and top rates (earnings more than £150,000), have been increased to 41% and 46% (40% and 45% across the rest of the UK).