The UK government will spend £4 million a year to compensate soldiers based in Scotland paying higher taxes under SNP policy.
Around 8,000 military personnel affected by the Scottish Government’s decision to raise taxes on those earning more than £33,000 per year will be refunded by London so their tax burden remains in line with colleagues in the rest of the UK.
Payments will range from as little as £12 to £1,500 for higher-paid officers. The payments will be reviewed annually.
The move was welcomed by Conservative MPs Douglas Ross and Kirstene Hair, who claimed the SNP “cannot be trusted to deliver for our armed forces”.
READ MORE: Review of higher tax for Scots armed personnel
Defence Secretary Gavin Williamson said: “It is completely wrong for the brave men and women of our armed forces to be punished for serving in Scotland by unfair raids on their pay packets by the Scottish Government. That’s why we have taken this urgent action to ensure that our troops are treated equally and fairly... today we can reassure our service personnel that they will not be left hundreds of pounds out of pocket because of decisions taken by the Scottish Government.”
Scotland Secretary David Mundell added: “Our servicemen and women make a huge contribution to the communities and the economy of Scotland.
“The Scottish Government’s decision to make Scotland the most highly taxed part of the UK means they would be unfairly penalised and it’s absolutely right that the UK government has taken steps to address that.”
Finance secretary Derek Mackay hit back, insisting that 70 per cent of taxpayers pay less tax under the Scottish Government’s plans.
“We hope those who have seen their tax bills reduce will not be disadvantaged by the UK government’s proposals,” Mr Mackay said. “It is disappointing that, despite making an offer to discuss the differential taxation of military personnel, the Scottish Government has not been consulted.”
READ MORE: Soldiers posted to Scotland set for rebate on higher income tax