Originally Posted by
drugsdontwork
Surely everyone in the military is exceeding their annual allowance then? Why are only some people taking a hit?
You are only taxed if your notional pension contribution goes above £40k. So your
basic pay would need to be ~£64k to be above the threshold where you might pay. But there are also many variables to this that mean that some do and some don’t - such as the ‘opening value vs closing value’ calculation (this favours those that take longer to promote). I don’t fully understand it myself, but if your salary in the military starts to approach the mid-high £60ks then you start to be at risk of getting a bill (normally on promotion).
I hope that makes sense? It’s a complex area that I haven’t got my head fully around as I have never had a bill (although I must be close!).