TCTM04203 - Income: Employment income rules - Specific payments and benefits in kind excluded from employment income for tax credit purposes: Armed forces travel and Operational allowances

Travel to and from leave

The Tax Credits (Definition and Calculation of Income) Regulations 2002, Reg. 4(4), Table 1 (Item 3)

Travel facilities provided for the claimant, as a member of the armed forces of the Crown for the purposes of going on or returning from leave. This is identical to the income tax exclusion (see Employment Income Manual para EIM50100).

Operational allowance

The Tax Credits (Definition and calculation of Income) Regulations 2002, Reg 4(4), Table 1 (Item 3A)

The payment under the Royal Warrant made under section 333 of the Armed Forces Act 2006 of an operational allowance to a member of Her Majesty’s forces in respect of service in an operational area specified by the Secretary of State for Defence.

Council Tax Relief

The Tax Credits (Definition and Calculation of Income) Regulations 2002, as amended, Reg 4 (4) Table 1 (item 3B)

A payment designated under the Royal Warrant under section 333 of the Armed Forces Act 2006 as Council Tax Relief and made by the Secretary of State for defence to a member of Her Majesty’s forces.

Continuity of Education Allowance

The Tax Credits (Definition and Calculation of Income) Regulations 2002, Reg 4(4) Table 1 (item 3C)

The payment under a Royal Warrant made under section 333 of the Armed Forces Act 2006, of the Continuity of Education Allowance to or in respect of members of the armed forces of the Crown during their employment under Crown of after their deaths.

Accommodation Allowance

The Tax Credits (Definition and Calculation of Income) Regulations 2002, Reg 4(4) Table 1 (item 3D)

Any accommodation allowance which is payable out of public revenue for, or towards, the costs of accommodation to, or in respect of, a member of the armed forces of the Crown, providing that the payment meets any conditions which have been specified in regulations made by the Treasury.

Note: With effect from 6 April 2017 the way in which many salary sacrifice and benefit in kind schemes are taxed will change, which means that some tax credit claimants will see an increase in their taxable income.

For the purposes of tax credits, where one of these schemes is in operation the taxable income figure should be used.