I believe in the US service(wo)men pay state income tax (where applicable) according to residence on top of federal income tax. Active duty pay etc. can be exempt when serving out of country or state. (Are any of our US members able to confirm or deny?) One could argue we should have a similar arrangement those habitually (but not presently) resident in NI, Wales or England should be exempt but those habitually resident in Scotland should be treated the same as other Scots but exempt if serving outside Scotland - perhaps for those joining after a certain date. CILOCT for those resident in service acommodation plus 50% Council Tax on own home elsewhere classed as second home come to mind. I know if I was living in a private home in Moray in the same CT band as now I would be paying less than I am here
so there is a small element of swings and roundabouts. If HMG brought in law to exempt servicemen the SNP would demand and probably get direct payment to compensate for lost revenue and undoubtedly it would be offset against the Defence vote. Paying compensation to individual servicemen has the benefit of only being incurred when there is a liability so probably keeps the total amount under more effective control.