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Are you a UK Armed Forces employee who has heard from "Dave" in the mess that you can claim certain expenses in your tax return to get a tax refund from HMRC? Or maybe you've had a "specialist" company reach out to you letting you know you're eligible for a tax refund?
Unfortunately, if it sounds too good to be true, it probably is.
It's essential to understand your entitlements not just to claim what you deserve but also to protect yourself from scams targeting military members. In this blog post, I'll debunk some common tax myths and clarify your entitlements.
Uniform Allowance
This one is top of the list for a reason, as it's the one I see questioned the most!
It's a common myth that MOD personnel can claim a uniform allowance, especially once they Google it and see the HMRC-approved rate on the list.
However, the HMRC-approved uniform allowance has already been included in MOD salaries, meaning it's already being claimed. There is scope to claim for extra costs if they apply, but you can only this under certain conditions and you'll need to supply proof to HMRC that shows your actual costs to support your claim.
To avoid confusion, military personnel are encouraged to consult resources like JPAC (Joint Personnel Administration Centre) to ensure they submit accurate claims.
Claiming Mileage
Everyone wants fair compensation for expenses, especially travel-related ones. Yet, another common myth is that service members can claim back the total amount spent on duty travel, expecting to be reimbursed in full, however, this is not normally the case.
Under JSP 752 ch 6 sect 7 it is outlined that whenever possible, a Service vehicle (e.g. Military Transport (MT) minibus, MT pool car or MOD-arranged hire car) will be provided, but if it is not, your duty travel by the most economic means will be funded at public expense.
This means, under normal circumstances, your travel is either provided or paid for (e.g. a rail warrant), so no further claims can be made for mileage. However, in some cases, you may be authorised to use your own private vehicle for journeys.
If you have been given permission to use your private vehicle for duty travel you may can claim Motor Mileage Allowance (MMA) from either your Duty Station or your Alternative Working Address if you are working remotely, to help cover the cost of your journey. An important note, if you use a private vehicle, you’ll need to make sure that it is insured for business use with a valid MOT and road tax on the date of the journey.
The MMA rate (25p per mile) does differ from the HMRC-approved rate for mileage which currently stands at 45p per mile for the first 10,000 miles (after that, the rate drops to 25p per mile). This means there may be a possibility that you could claim the difference between the MMA and the HMRC-approved rate (not the whole amount!). If you are in a scenario where this does occur and you make a claim with HMRC for the difference, keeping meticulous records of your travel and expenses is vital. A detailed travel log will not only document your claims but also help ensure compliance with tax laws.
Marriage Allowance
The marriage allowance transfer is often misunderstood, but also underused.
Many think this tax benefit applies to all couples, regardless of income level. However, the transfer is specifically for couples where at least one partner falls into the basic-rate taxpayer category, currently earning up to £50,270 per year (£43,662 in Scotland) and the other is ideally under the personal allowance threshold, currently £12,570.
Where the person who is earning less than £12,570 gives their spouse some of their unused personal allowance (to a maximum of £1260). This can help reduce the higher earner's tax by up to £252 in a tax year.
You can read more on this and find details on how to put the election in place here: Marriage Allowance.
The Risks of Tax Refund Scams
Finally, a note on Tax Refund Companies. They often use persistent emails, phone calls, or obnoxious advertisements promising refunds, without even knowing your tax circumstances in the first place.
This is where, "if it sounds too good to be true, it probably is" rings true!
Typically, these companies file tax claims on your behalf and charge a fee - usually a percentage of the refund they secure. This fee is deducted from the refund issued by HMRC before you receive the remainder. However, when HMRC reviews the claims and finds them invalid (like a uniform allowance claim when it's already factored into your salary), HMRC often overturns the refund and requires repayment. The catch? You’re responsible for repaying the full amount to HMRC, while the company keeps their fee. The companies' terms and conditions, which you likely agreed to when signing up, often shield them from liability in such situations, leaving you out of pocket.
To protect yourself, remember that you can communicate directly with HMRC for tax claims. Before considering any third-party services, verify their legitimacy. Your vigilance can save you money and considerable headaches.
Empower Yourself to Combat Tax Myths and Scams
Tax can be complex, and misconceptions can lead to real financial pitfalls and headaches with HMRC. By understanding common myths, MOD personnel can ensure they are not being caught out with incorrect claims but also not missing out on legitimate claims.
And next time you hear "Dave" in the mess spinning dits about all the tax refunds he could claim, make him read this and then get him to check the JSP's and HMRC's website!
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