Why do we pay tax when out of area????

[Joe Black]

Surely in this day and age when we are so often out of the country in lovely parts of the world, we should not be taxed? Anyone agree? :*

[k3k3]

You could try asking Dubya to suggest it to Teflon Tone.

The U.S. military don't pay income tax for the whole calender month if they only go somewhere dodgy once. The U.S. aircrew on Nato E-3A's benefited from this during the unpleasentness in (former) Yugoslavia through the 1990's. One survellance mission over the Adriatic per month and they saved megabucks.

[CBA_caption]

Why don't you champion that cause in the Aberdeen Independent or whatever paper you write for?

[Joe Black]

CBA - I'll take that one as a compliment but unfortuantely I don't write for a newspaper. For my sins, I'm unfortunately serving and just wanted some other points of view on this topic.

[charliegolf]

Why do we pay tax when out of area????

'cos you're still earning?

CG

[Grimweasel]

So that Gordon Brown can let BP off a £1.3Bn tax bill for Meths. He needs to keep BP sweet for HMGs revenue etc. Lets sting the poor defenceless MoD workers instead. Much easier pickings!!

[RileyDove]

You pay taxes when out of area so Tony can afford to send his expeditionary forces on free holidays in the sun.

[ShyTorque]

You will pay tax unless you are deemed not resident and not ordinarily resident in UK..... there's no escape.

[southside]

You earn the Queens Shilling and should pay taxes on that pay. You should not expect to earn tax free income when operating overseas.

[WorkingHard]

And the rules (as Shytorque outlined) apply to everyone without exception.

[rolandpull]

I seem to remember a certain expat who flew for EZY fighting the gov for tax relief on sector pay, given that the larger amount of time was ex uk. Won, and got rebate for the chaps. There is bound to be more to it than I can remember, but it was a win.

[Confucius]

I don't think military personnel should pay tax at all, unless one has no sense of humour or is incapable of not toeing the company line.

[Kim Il Jong]

HMG have the Forces stitched on this one.
The definition of a non resident is someone who spends in excess of 6 months out of the country, all in one continous stint, in the tax year.
Thus a civvy working on an overseas op alongside you, provided the 6 month thing is adhered to, is not liable for tax.
Simple case of double standards.
Interestingly and unsurprisingly, if you are UK armed forces overseas, you still have to pay council tax (albeit at a very low rate). Even though there's no F**kin council. The money goes to Westminster council, go figure.:*

[DaveyBoy]

The official answer is that this is taken into consideration when the X-factor is added to our pay.

[ShyTorque]

Unfortunately, wherever you go, even as a civvy, you are liable to pay tax somewhere. If you are not resident in one country, you are in another.

Note that some US folks working abroad may be liable for double taxation; i.e. taxed both home and abroad. I used to work with one such person. His way out of it was to skip off home at the end of his contract without paying his overseas tax bill :E

Last thing I heard, they were still after him and his departure made things more difficult with the revenue department for the rest of us on similar contracts for the same employer.

Don't forget the "not ordinarily resident" part.

[ukatco_535]

Not strictly true Shy Torque..


The Strawberries on the RFAs are paid tax free if out of UK waters for long enough - which makes a mockery when working alongside our lot. They have even been known to sai for 2 or 3 days in the past to get the correct number of days in.

[BN Boy]

Same goes for the Civvy Heli mates (Brit. Int.) in the FI's. They aren't paying anything back to her Majesty.

Most other forces I've come in contact with whilst abroad are not taxed. And their jaws hit the floor when told that their Colonial Masters are.

Exactly what benefit do we see from the taxes we pay when on Ops? And American BX's don't count!

[southside]

Exactly what benefit do we see from the taxes we pay when on OpsYou get paid every month! Thats a pretty good benefit.

But apart from that what have Taxes every done for us?

Well, most of it goes on Education. That means that we can send a kid to school who will grow up and want to join the military and fly with you.

Taxes are spent on transport so that the kids can get to school. If the little lad falls ill he will be able to get free health care. He lives in a society which is (relatively) safe and benefits from law and order. His taxes help pay for the environment as well as providing a little cultur to his life. But most importantly of all, Little Johnny can sleep safe and well in his bed at night knowing full well that he is being protected from aggression by a band of professional and competant brothers who will lay their lives on the line to ensure he remains free and safe. Thats what taxes do.

[BN Boy]

Not to sound like a right wing capitalist (I am), but little johnny can go swivel. I'll gladly pay for his education (though, doubtless the little sh*t is truent, dim and on emphetamines) when I'm domicile in the kingdom. When I'm abroad though (for a considerable length of time, I'll submit) I don't think I should be paying into a system whereby I'm recieving nil return, ie., health, transport etc.

To put a different (less grown up spin on it) if everyone else (Canucks, Aussies, Spams, et al) aren't paying, why are we? What's their take on it? It's not fair! *I'll fetch my hanky*

Oh and if you think that the benefit is that we get paid then I put it to you that we are self employed. As such, I reckon next time we invade a country we do it on our terms. I, for one, will be invading Bermuda. You're all welcome to help.

[Bing]

So if taxes pay for the military does that make me self-employed?

[charliegolf]

If Johnny comes to my school he'll be able to spell truant and amf..., amph..., speed.

CG

[Confucius]

...I, for one, will be invading Bermuda. You're all welcome to help.

I'm waiting for an American/Canadian border skirmish. Defend one side one week, the other side the next. (R&R in Bermuda, natch.)

[Hoots]

Im sure the Aussies and maybe the Kiwis take the Queens shilling but certainly the Aussies dont pay tax out in sunny climates, thats why they volunteer to go there. Im glad my tax paid for my 5 months out the country during the last calendar year is going to such good causes. Look forward to giving more this year.

[Ali Barber]

I am not resident or ordinarily resident in the UK, having spent about 6 weeks in the UK in the last 8 years. Unfortunately, the residency page of the tax return has another box to tick when it asks "are you a member of HM's Forces?". Only advantage with paying tax while abroad is the kids university fees are the same as if I was resident in the UK. What would happen to that if we had US style tax-free months? Would your Uni fees go up for that month as well? Either way, they've got you by the short and curlies!

[WorkingHard]

You are paid by the British taxpayer ( you are all taxpayers also) to work on the taxpayer's behalf so what is the problem? You knew the conditions when you signed on. If you were to be granted such status as you seek then the clear option would be to rotate you so that you never achieved the qualifying period. Which would you prefer. For those comparing with USA or Aus forces for example you could alsways join them instead of the Army or RAF or Navy. I work by the same rules and whilst my periods away are short in total they very much add up but I do not qualify for any exemptions from UK taxes.

[Pontius Navigator]

Workinghard, sour grapes?

It would be a rather good sweetener if we did get paid tax free. Better than doing you stag in Bosnia with your redundancy letter in your pocket.

[WorkingHard]

PN - yes a little bit of sour grapes but having said that there is no way I would swap you. It is a very long time since I wore the uniform and despite some of my views about things expressed on these forums I would not do it again in present circumstances (they probably would not have me anyway). I have the utmost admiration for you people who actually get the job done in what must be unbelievable conditions. BUT we still have to apply the rules as they are writ!

[movadinkampa747]

At least the Government aren't going to waste your taxes you pay whilst out of the country on asylum seekers who vouluntarily return to their countries only to return to get another bonus. Oh they are. Yes £3000 of your hard earned money wasted, plus you will pay them money for the first 12 months they remain in their country.

Aren't you glad you are fightining for them to be given your money.:*

[JessTheDog]

The short answer is:

because "they" can do so and there is no means of direct public complaint that may cause political embarrasment.

[Pontius Navigator]

WH, you are right the rules are writ but writ rules can be changed. True changing the Scottish Chancellor would not be easy - how about near an election?

Other rules that Handbrake House enforces, seemingly without compassion, are not quite as rigid. 'twas our AEO that got the SDO rules changed so that they could get brought on to ration strength. The argument against had been that the individual was only on duty for 24 hrs and could not be brought on to ration strength. He countered saying 'simply bring the SDO' onto strength as he is on duty every day'. It worked.

I persuaded our OC Admin Wg in Cyprus that all livers in should get food and accommodation refunds during exercises as we could not use our rooms. He accepted and even got all the rocks hard lying money. Later, at a hardened airfield in Lincolnshire, this rebate was a very nice thank you every time we had a practice bleeding exercise. Only a few quid back but it still gave a nice warm glow.

Our lords and masters should push this one with the treasury after all it would cost the MOD absolutely nothing.

[trilander]

I understand that an airforce in the muslim homeland needs aircrew and has a better tax system, well I liked it

[trilander]

Try an airforce in muslim homeland they have good tax system which worked well for me

[LateArmLive]

That's it, Southside has finally outed himself as an asylum seeking air cadet, as well as losing the last shred of credibility he had!

[jindabyne]

LateAm

Nah - he should be IN an asylum

[Climebear]

The - supposedly independant - Armed Forces Pay Review body addressed this issue last year and included the following in last year's report http://www.ome.uk.com/downloads/2005%20Thirty-Fourth%20Report%202005.pdf

International comparisons
1.15 In our 2002 Report we published the findings of a survey we had commissioned into the military remuneration package of 10 countries that contribute to international operations alongside UK Forces. International comparisons do not feature in our remit; we commissioned the survey in response to suggestions from personnel on our visits that they were not as well paid as some other Armed Forces, particularly on operations. The survey indicated that the UK package compared favourably with that of other nations.

1.16 We commissioned Mercer Human Resource Consulting in May 2004 to repeat the comparative exercise. Data on military pay and conditions were provided by military attachés in twelve countries – Australia, Austria, Canada, Denmark, France, Germany, Ireland, Netherlands, New Zealand, Norway, Spain and the USA. Mercer adjusted the pay data provided to account for taxation (including where applicable, exemption from tax), currency exchange rates and differences in the cost of living in each of the countries. Mercer’s report is published on the website of the Office of Manpower Economics www.ome.uk.com.

1.17 Briefly, Mercer concluded that:

• Of the countries surveyed, the UK appeared to offer the highest, or second highest, base salaries across the ranks, with only Canada providing higher base pay at certain ranks;

• When base pay, X-factor and allowances on operations (in the UK, Longer Separated Service Allowance and Longer Service at Sea Bonus) are taken into account, the UK package remains ahead of seven of the countries surveyed and broadly in line at most ranks with Ireland, the USA and Canada, but the package is less favourable than that provided across most ranks by Australia and France;

• The survey indicated that the UK attached a higher value to payments targeted on the disadvantages of military life (X-factor in the UK) than other countries surveyed, with the exception of Canada for certain military ranks;

• The survey also indicated that UK pension arrangements appeared more attractive than those offered in the countries surveyed; and

• The relative advantage experienced by the UK on base pay in 2001 had slightly narrowed, which is consistent with contextual trends in pay movements, currency movements and changes in cost of living in the countries surveyed.
1.18 As we pointed out in 2002, there are difficulties associated with any international comparisons. They require a detailed appreciation of the circumstances in each country surveyed and, because exchange rates fluctuate, timing can materially affect the results. With this caveat, we conclude from the survey that, overall, the UK package remains broadly comparable with that offered by other nations.


The full consultance report can be found at http://www.ome.uk.com/downloads/International%20comparisons%20MERCER%202004.pdf

With this evidence behind him, I think it is safe to assume that that nice Mr Brown fellow would offset and relief from income tax when OOA by a reduction in the benefits currently paid.

[buoy15]

The military are entrapped in the ring-fence system of PAYE

Talk to an off-shore oil person, whether self, or company employed - involves No of days away and paying reclaimable tax and other expenses in other countries etc. - they are up to speed on all of this

If your in the desert, you may never qualify for days out of the country but you will still have instant access to the medics and dentists you take with you, which is a bit better than this crap NHS system at home

If you have a family, the inviduous Council Tax still applies, although I understand, a singly, who may be extended beyond 3 months, could get a rebate

Where I live, some of the locals in the pub think the Military still get free housing, free food and pay no tax - which is nearly true on detachment, when you take allowances into the equation

Two things in life - pay taxes and die

Next moan please

Love many, Trust a few, Always get what's due to you!

[cazatou]

The real "GOTCHA" is if you decide to reside overseas after you retire.

HMG reserve the right to tax all "Government Pensions"in the UK regardless of where in the World you reside in retirement. As well as Military Pensions it includes Teachers as well as Civil Servants at National as well as Local level.

Just make sure you reside in a State that has a dual taxation Treaty with the UK.

[southside]

Quite right as well. You couldn't expect a tax free pension could you?

[x10ge]

My first post on here but eventually someone got round to pensions.

Yes it would be nice to Cherrypick all the benefits but I don't see many of my fellow pensioners who live abroad, complaining about the fact they have to give their pension rights away when they move out the UK.

It's swings and roundabouts folks, and yes I spent someof my 25 years service abroad paying UK tax but can now enjoy my service pension wherever I live.

In the fullness of time so will you.:ok:

[cazatou]

I forgot to mention that HMG are planning to reduce the length of time that UK citizens who reside overseas retain the right to vote in UK elections to 5 years.

Thus HMG will tax people on their pensions whilst removing their right to help select the Government that sets the tax rates.

"No taxation without representation." Didn't we lose the odd Colony over that issue?

[The Burning Bush]

I think most of you ex service/civvy types (WorkingHard, Southside et al) are missing the main point. No one is suggesting that the UK Armed Forces should give up paying tax completely; the proposal, I would guess, would be a little tax break when deployed in an operational area. I shouldn't think it would affect your pensions/benefits at all. ;) LSSA at 40% is just a joke. :*

[WorkingHard]

I was not even thinking that tax should not be payable. I hope I made the point that the rules are there for all and Service Personnel should not receive any special concessions except where agreed by parliament. I also said I had no desire (really probably could not) do the job the troops do these days. So they have my utmost admiration but the tax rules apply to all. Is it not the case that whilst technicall you may be in a foreign country your base of operations is "UK soil" so to speak? I dont really know these days but if memory serves me right that used to be the case. Secondment was the only exception.

[PPRuNeUser0172]

So would you be happy Workinghard if parliament agreed to these concessions being allowed. i.e if you spend longer than a defined qualifying period away from home you get a tax break?

Surely there must be some tax break/perk to going abroad on Tony's all inclusive, 5 star, peace missions? No forgive me, to get benefits you need to be an unemployable, track suit wearing dole head chav, who contributes nothing to society. Ahhhhhh thats better

[WorkingHard]

DS - correct on all counts I believe

[The Burning Bush]

I can assure you, WH, that some of the places that can be visited nowadays are far from being "UK soil".

[Unmissable]

I've raised this point several times with the powers that be and each time they shy away behind theanswe that the treasury wouldn't allow it. WELL LOBBY THE TREASURY TO CHANGE, ITS ALL THE SAME GOVERNMENT WE WORK FOR.

Rant over... why can't the treasury (through MOD) realise the morale boosting benefits of such a policy? I am sure that it wouldn't be hard to get through parliament since no one would be brave enough to oppose it, and it doesn't cost that much in the big scheme of things. Furthermore, you could probably offset some of the savings by reducuing the operational welfare (20 min phone call) package. Of course if they claim that this wouldn't realise any savings, they would be admitting that it is a qworthless package!!!!

It makes so much sense and it CAN be done if the will is there.

[Climebear]

Unmissable

Rant over... why can't the treasury (through MOD) realise the morale boosting benefits of such a policy?

Please see my entry above. The Government (Treasury) believe we have a package that is already better than most countries - because the 'independent' Armed Forces Pay Review Body told them such last year after an 'independent' review by a civilian consultancy (http://www.ome.uk.com/downloads/International%20comparisons%20MERCER%202004.pdf ).

So you would be correct in your assumption that the Treasury would offset the costs of tax relief against the current package - this could be, as you suggest, reducing the operational welfare (20 min phone call) package; but, it could easily be by reducing the amount paid in LSA (replacing LSSA under JPA). Who would benefit from the morale boosting benefits of such a policy? As it is based on tax then the people with most to gain would be those paying Income tax at the higher rate - this would be senior officers and aircrew lt/capt/flt lts. I am sure that their morale would be boosted. But what about those on the standard tax rates (that would be the majority of the armed forces)? they would see their current package reduced by the same amount; however, they will not get as much benefit as those who already get paid more than them. I would suggest that this may not have the morale boosting benefits you predict.

Of course one could always argue that those who pay tax at the standard rate should have done better at school! (Though having met recruits at Halton with Masters degrees, I doubt that this holds true either).

[Charlie Luncher]

I have been on both sides, now as a Colonial when assigned to War-like service I receive a tax free salary(normally 48%) and tax free service allowances. My x factor is also paid tax free, it is not as some suggest a fudge factor allowance but it is there for those who may pay more than the ultimate price in personal loss. As I accrue leave both normal and war leave per pay cycle I continue to earn tax free allowances + salary for the duration of the War leave whilst back in the homeland. We have good facilities, or a least more than 1 FOB TV, 6 internet pc's and a couple of dog eared copies of fleet streets finest loo paper, and these facilities are not used to justify not giving dudes and dudettes their LOA.:sad:
I do not get these benefits whilst I spend the other portion of the year away from home on other junkets, but I feel I should be compensated for having to put up with the OH&s, tree hugging and playing with rocks and their like for the month-2months I actually spend at Home.:*
For those of you who think troops should not get benefits, as you lie sleeping tonight just remember you can go to the shops/pub/movies/polling station/school/uni due to the sacrifices of a few men and women not forgetting the odd dog thrown in:ooh:
Charlie sends

[southside]

A recent article from the USA.......

Tax Credits, Combat Exclusions Boon to Warriors

If tax laws mirror a nation's values, then America clearly values its military personnel, and more so today than a few years ago.

Combat-zone tax exclusions, combined with changes to the Earned Income Tax Credit (EITC) and child tax credits, have reduced or even wiped out the tax liability of thousands of military families. For many, taxes have been replaced by extra cash in the form of refundable tax credits.

"That's exactly what these credits were designed to do for the low-income individual," said Vincent Mullett, a retired Marine and a senior IRS tax specialist in San Marcos, Calif., near Camp Pendleton. But Mullett said he knows of colonels (O-6s) who now qualify for EITC and child tax credits.

Mullett and Raphael Tulino, IRS spokesman for southern California and Nevada, spent a few hours with Military Update reviewing 2005 tax highlights for service members. Later, Army Lt. Col. Jane Fenton, executive director of the Defense Department’s Armed Forces Tax Council, offered more insights.

The first thing military taxpayers should know, IRS officials said, is that they don't have to tackle tax returns on their own. Free help is available year round, on military bases stateside and overseas, through the IRS’s Volunteer Income Tax Assistance (VITA) program.

Staffed by IRS-trained volunteers using the latest tax-filing software, VITA is open to active duty, military retirees, reserve component members, service spouses and survivors. Tax returns filed electronically can generate refunds in seven to 10 days. That should encourage even cash-strapped families to avoid the fees of commercial tax services or the exorbitant fees charged for so-called Refund Anticipation Loans.

Military members now serving in combat areas don’t have to worry about filing 2005 tax returns on time. IRS tax actions are suspended until they leave combat areas, and then they will have six months to file. Even that deadline is extended automatically by the number of days a member served in a combat zone from Jan. 1 to April 15, the normal U.S. tax-filing period.

Even in peacetime, military personnel enjoy some tax breaks. That's because a portion of military pay is provided as tax-free housing and food allowances, or "in kind" government housing and meals. On average, said Fenton, allowances represent roughly 25 percent of officer compensation and 33 percent of enlisted. The average value of tax breaks on those allowances, she said, is about $5000 for officers and $2500 for enlisted.

In a combat zone, all enlisted and warrant officer pays are non-taxable. Only the combat tax exclusion for commissioned officers is capped, for 2005 at $6529 tax free a month. A member who serves even a day in a combat zone receives that month’s pay tax free. Likewise, all bonuses or special pays received are tax free, which encourages members to reenlist or extend service obligations while serving in combat areas.

Combat tax breaks become even more valuable when combined with tax credits available to millions of other Americans. Here’s how:

EITC -- For 2005, EITC provides a refundable tax credit of up to $4400. The maximum is payable to qualified families with taxable earnings of $11,000 to $16,400. Those who earn less or more still can qualify for some cash credit. But, for 2005, adjusted gross income must be less than $37,262 (married filing jointly) for families with two or more qualifying children, and less than $33,030 for families with one qualifying child.

In 2003, when U.S. forces invaded Iraq, many low-income military families saw their EITC fall because combat zone service had left them with little or no taxable income. Ironically, many officers suddenly qualified for EITC, because long combat tours had lowered their taxable income sharply.

The Working Families Tax Relief Act of 2004 corrected this inversion. It allowed members to choose whether to include combat-zone income when calculating EITC. Higher income personnel continue to exclude combat-zone pay to qualify for the tax credit; lower income personnel include their combat-zone pay for the same reason, to qualify for or raise their EITC.

Defense officials had urged Congress to restore EITC levels for enlisted serving in combat zones but to end "windfall" credits for higher-paid personnel. Congress ignored part two of that request. The 2004 changes to the EITC law are set to run at through tax year 2006.

DoD doesn’t track numbers of service members eligible for EITC.

"We just know anecdotally," said Fenton, "that there are significant numbers of people impacted by that change."

CHILD TAX CREDITS – Like many taxpayers, military families also can qualify for the Child Tax Credit, of up to $1000 per child under age 17. For a family with two children, that is $2000 off their tax bill. But what if families have modest incomes and little or no tax liability?

For these families, Congress approved the Additional Child Tax Credit. This one can convert the unused portion of the Child Tax Credit into a cash refund. Many military families qualify.

The value of combining combat tax breaks with family tax credits can be substantial, Mullett said. He worked up an example of enlisted member with a spouse and two children who earned $25,000 in basic pay during a full year in Iraq. The spouse earned $12,000. On filing their 2005 return, the couple would get back all federal taxes withheld, a total of $8,456, plus $6400 in tax credits ($4400 in EITC; $2000 in Additional Child Tax Credit).

If the same member had not served in a combat zone, the couple would have combined taxable income of $37,000. Again they would get back all federal taxes withheld but only $577 in the Additional Child Tax Credit.

[Brian Abraham]

While doing my bit many years ago it was all tax free (not UK) and received an allowance on top of that. Would have thought it the least a nation could do for the boys and gals at the front. With the user pays philosophy that seems to encroach all avenues these days its probably a wonder they are not charging the troops an entertainment fee for having the privilege of playing in their sand pit (and transport to/from, accomodation, meals and and and ....).
Must get a job as an accountant.

[DDU]

Charlie Luncher read yer PM's mate.

[heights good]

And the rules (as Shytorque outlined) apply to everyone without exception.

If you are a British tax payer and you spend more than 6 months of the year out of the UK you DONT pay income tax........ unless your in the military!!!

This is why lots of Brits work in the middle east, they DONT pay tax.

That gentlemen IS the exception.

[cazatou]

heights good

Sorry, but if you are in receipt of a pension from UK Government service (Military, Civil Service, Education etc) the UK Government WILL tax you on that pension no matter where you are in the World.

[Ali Barber]

Sorry, but even ex-pats in the Middle-East pay tax on monies earnt in the UK, i.e. if you rent out a house or 2. You don't pay tax on money earnt abroad. This is the opposite for Spams who still pay tax from what I hear out here in the sandpit.

[southside]

If you are a British tax payer and you spend more than 6 months of the year out of the UK you DONT pay income tax........ unless your in the military!!!
This is why lots of Brits work in the middle east, they DONT pay tax.
That gentlemen IS the exception.

Yeah, those guys are correct. Heights good - Thats not strictly true is it? There are thousands of Brits working abroad paying UK taxes.