THE letter and reply in spring’s Army&You about Longer Separation Allowance (LSA) being taxed did not raise the question of why it is done at the rate of income tax.
My husband’s salary is taxed at 40 per cent and so, therefore, is our LSA. During his last tour he received £18.39 per day, reduced to £11.03 after NI and income tax.
If the level of LSA paid is dependent on separation time throughout career, how then is it fair that we receive far less than someone on a lower income tax band, who has had similar levels of separation?
Those that have promoted further and have moved into a higher wage bracket, receive less money. As was quoted in last issue’s response: “JSP 752 states that the aim of LSA is to support and improve retention by compensating those personnel experiencing separation over and above that compensated for by basic pay’s X-Factor element.”
I appreciate the extra £300 a month when my husband is away. It allows the children and me to fill the weekends and holidays with exciting activities that we would otherwise be unable to do.
However, it irks me that the majority of the other battalion families receive an extra £100. Soldiers and families are all experiencing the same support and retention issues, and we should not be penalised through rank.
Name and address supplied
Response from AFF Employment, Training, Money & Allowances Specialist, Caroline Mayne: Thank you for your question and we absolutely understand your frustrations. However, this is a personal taxation issue rather than a rank or allowance issue.
As with salaries in civvy street, allowances and bonuses are usually treated as part of normal taxable income and tax and NICs will be paid on it through PAYE in the usual way.
The impact of pay rise due to promotion, in the Forces and in civvy street, inevitably affects personal taxation. But on the positive side, an increase in military salary or allowances will still result in an increase in take-home pay.
There are, of course, some allowances that are not taxable. This is assessed using the relevant HMRC legislation. These include Local Overseas Allowance, Food and Incidentals Allowance, Home to Duty Travel, Get You Home Travel and Operational Allowance.