The Secretary of State for Defence, Des Browne, and Chancellor of the Exchequer, Gordon Brown, announced today that military personnel will receive a tax free bonus of up to £2,240 for deployment on an operation tour in Iraq, Afghanistan or the Balkans.
This payment is equivalent to the amount of tax a typical private soldier would pay during those six months.
Des Browne, said:
“Our service personnel are doing a fantastic job in Iraq and Afghanistan, often in very difficult circumstances. The bonus is intended to compensate them for the dangers and harsh conditions they are experiencing there.
“Although our Armed Forces already earn significantly more than their US counterparts and the majority of international forces the Chancellor and I felt that we could and should do more.
“It means that half our people on operations will be better off than under a tax exemption – increasingly so for the lower paid. The most junior will be over five hundred pounds better off after a six month tour. Just as importantly, everyone on operations will be equally better off, by just under £100 per week, free of tax.”
Gordon Brown said:
“It is right that our Armed forces should be properly rewarded. So increasing the award our forces receive when on operational service in the most dangerous conflict zones ensures that the extraordinary job our forces do is once again acknowledged. This will make them amongst the best paid of any Armed Forces in the world.”
Professor David Greenaway, Chairman of the Armed Forces Pay Review Body said:
“I welcome the tax-free bonus for specific operational theatres to be funded from new Treasury money.”
The tax free bonus will be paid, irrespective of rank, to everyone in the relevant operational theatre.
The payment will be backdated to 1 April 2006.
This means that members of 16 Air Assault Brigade and the men of the 3 Para Battle Group, who have served with such distinction in Afghanistan, will benefit.
It will cover Iraq, Afghanistan and a number of those serving in the Balkans. Eligibility criteria will be broadly similar to those for the award of the relevant campaign medal. Detailed eligibility criteria will be announced to the Armed Forces shortly.
The bonus will be funded by additional new resources from the Treasury. In the current financial year it is expected that the cost will be in the region of £60-£70 million.
Military pay is kept under constant review and changes are usually made annually. The Government feels, however, that the tax free bonus should be introduced as soon as the additional funding has been secured.
The Armed Forces Pay Review Body (AFPRB) will review the tax free bonus payment as part of their annual review of service pay.
Additionally there will be improvements to the Operational Welfare Package. These include, increasing free telephone calls from 20 minutes to 30 minutes per week and additional internet connectivity. These measures are in addition to those announced last week for Service hospital in-patients.
