Key changes affecting service personnel announced in mini budget
NEWS
UK Chancellor Kwasi Kwarteng came out with a mini-budget which includes what he calls 'the biggest tax cuts in a generation'.
What does it mean for your wallet?
In April, there will be a 1% cut in the basic rate of income tax and this applies to those earning between £12,571 and £50,270.
That includes everyone in the UK, from recruits up to Army captains, Royal Navy lieutenants and RAF flight lieutenants.
If you fall into that group it is thought you will save, on average, up to £170 a year.
For those who are more senior – up to and including Army brigadiers, Royal Navy commodores and RAF air commodores – earning between £50,271 to £150,000 the rate remains the same, at 40%. Nothing changes.
But there was a surprise within the mini-budget.
The group set to benefit the most are those who earn more than £150,000 a year. The Chancellor pledged to abolish the 45% additional rate of tax for them, meaning a person earning around £200,000, like the Chiefs of Staff, will save nearly £3,000 a year in tax.
What about National Insurance?
In April this year, National Insurance went up by 1.25%.
The Government has decided to reverse that from November. If you are among the lowest ranking personnel in the Army, Navy or RAF earning around £20,000 you will save around £93 a year.
Someone earning £30,000, like a Lance Corporal or a Private in the Army, will have an extra £392 in their wallet, while a £50,000 earner like an RAF Flight Sergeant would save £842. The more you earn the more you save.
