Navy Tax Rebate

Am I allowed to claim tax back on travel in the Navy? Despite much chatter to the contrary, you are entitled to reclaim tax you have paid on work travel.

We know you already get HTD (home to duty) payments, usually paid at a rate of 21p per mile. If you have a temporary workplace, as defined by HMRC, then you are entitled to claim 45p per mile up to 10,000 miles and 25p from there onwards. You keep your tax free HTD money and claim the difference.

What is a ‘temporary workplace’ for a Navy tax rebate?

This is the definition that has led to all the confusion. By temporary workplace HMRC means somewhere that you work for up to 24 months.

This is not the same as MoD’s definition of a temporary posting. As a result of this, many armed service personnel are unaware that they are allowed to reclaim tax relief on the cost of travel to and from a permanent posting, if it is for 24 months or less.

HMRC’s regulations apply to every taxpayer, including members of Surface Fleet, Fleet Air Arm, Submarine Service, Royal Marines and Royal Fleet Auxiliary.

HMRC and the MoD have resolved this issue last year and this was communicated to you through DIN ‘2015DIN01-005. This clarifies that you are entitled to claim tax relief on travel expenses alongside HTD or GYH payments and that you are allowed to make a claim to HMRC.

Navy tax rebate eligibility

You can submit a claim if you have completed Phase 1 Training and you have travelled from your home to a posting that is intended to be 24 months or less. This applies to public transport, including flights and ferry crossings, and using your own vehicle.

The same rules apply to postings abroad, as well as in the UK. As long as your assignment order shows that the posting is intended to be for no longer than 24 months, you are entitled to the full travel tax relief amount.

Any extensions to the posting beyond the initial time limit do not affect your claim.

How much is a Navy tax rebate worth?

You can get an estimate based on your financial situation by using our free MoD tax rebate calculator. Several factors are involved in working out your final figure, which is why HMRC consider each case individually.

Extra bonus! You can backdate your first tax relief claim for 4 tax years.

What paperwork do I need?

HMRC may well require evidence to back up your claim and they accept several types of armed service personnel documents, such as:

• Receipts – particularly necessary for public transport travel.
• Move and track docs.
• Payslips – these show essential information like how much tax you have paid and which allowances you already receive.
• Assignment orders – the easiest way to prove when and where you were, and for how long.
• Other – P60s and P45s are really helpful for backdated claims.

Don’t panic if you have no idea where your documents might be or if you keep electronic records and shred the paper copies.

You have 60 days to get a copy of an assignment order and JPAC can usually help with other missing documents (0141 224 3600).

How do I claim my Navy tax rebate?

The process to claim your tax rebate as a member of the Navy depends on the how much you are claiming back.

• For a Navy tax rebate claim worth £2500 or more you will typically need to submit a self assessment tax return to HMRC.
• If your claim has a value of less than £2500 a P87 should be sent to HMRC instead and then you will normally have to provide additional information after the P87 has been processed in full.