tax credits and armed forces bonuses

gc-nelson

Hi all,
Today I received a decision letter about our tax credits claim for the year- detailing that as we earnt over 40,000 last year we would get penny's basically.
However, the only reason my husbad had extra was because he had done a tour of duty in afghanistan and got a bonus for this. How is this fair when he earnt that bonus fighting for our country, only to be penalised later on for it? Its like giving it from one hand and taking it back from another!! Do you think I have a right to appeal against this- or what should my next steps be?

Icequeen99

When you say he got a bonus - do you mean the operational allowance?

Did you include it on your renewal forms?

I would advise you get some specialist help. Yes you can appeal, you should lodge an appeal within 30 days of the award notice.

Have a look here: http://www.hmrc.gov.uk/manuals/tctmanual/tctm04203.htm The operational allowance is not counted as income for tax credits (and is tax free).

You need to get a breakdown of exactly what his pay was made up of so you know what you should declare. Is it included in the total taxable pay figure on his P60?

You might also want to try and get some specialist help. Try https://www.litrg.org.uk or https://www.taxaid.org.uk

IQ

gc-nelson

Yes it was his op bonus- but he was taxed on it, so I assume it would be on his p60 also- its bad enough being taxed, but then to do this also?
I didn't declare it, but they checked our claim and got the amount from his p60. How would I go about gettin a breakdown of his income?

Icequeen99

He can log onto armynet and get a payslip for the month he got the Op allowance. It should show the name of each thing and how much it was in the left hand bottom column.

This from JSP confirms the operational allowance is non-taxable. http://www.rncom.mod.uk/uploadedFiles/Pages/Paying_Allowances/JSP_752_Operational_Allowance_Interim_Regulations.pdf

If it has been taxed then you might want to speak to one of the charities i linked to earlier to see if they can give some more info on whether there are any exceptions etc...as I only know it is non-taxable but can't help beyond that.

IQ

Hammyman

Also remember that SSAFA and the Royal British Legion have people who can help as well.