13 March 2008
We received a petition asking:
“We the undersigned petition the Prime Minister to resolve the MoD pension injustice of those wrongly taxed when thier career was ended due to disability.”
Details of Petition:
“In 1998, the Army Pay Corps (APC) wrote to thousands of war pensioners suggesting their war pensions had been taxed. Some pensioners had died before they could claim, others are still waiting for their rebate. Some got their rebate. In 2002 the MoD conceded that tax rebates were due and compound interest be paid. I know of one pensioner who is still waiting for his interst and another whose widows pension has been cut to 40%. Please petition Number 10 Downing Street to ensure that all the veterans of the wars & conflicts past and on-going receive the full pension they are due to them or their widows and families.”
Read the Government’s response
The Government has always recognised the commitment of our Armed Forces and is determined to ensure that commitment continues to be properly reflected in pay, allowances, pensions and other payments made for injury caused by service.
In 1998, it was discovered that, going back to the 1950s, a number of Army Service invaliding pensions that should have been tax-free, because the invaliding was found to be attributable to service by what was the Department for Work and Pensions’ War Pensions Agency at Norcross - now part of the Ministry of Defence Service Personnel and Veterans Agency - had been taxed in error. When it became clear that the number of pensions wrongly taxed was higher than previously thought and that the error had also affected RN and RAF pensions, the Ministry of Defence commissioned an independent internal review (the Service Pension Taxation Inquiry, the report on which was published in November 2002); this was designed to establish the full extent of the problem and recommended remedial measures to avoid any recurrence.
Her Majesty’s Revenue and Customs (HMRC) repaid to each individual pensioner the tax wrongly deducted for all the years in which the error had occurred, together with simple interest at the Repayment Supplement rate as compensation. In December 2003, the then Under Secretary of State for Defence announced that the Ministry of Defence would pay compensation, in addition to the Repayment Supplement already paid by HMRC, to reflect the full extent of the loss to the individuals affected.
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