We have now reached an agreement with the Ministry of Defence (MOD) that the following annual flat rate expense allowance (FREA) is due in respect of laundering your uniform:
- Royal Navy £80
- Army £100
- Royal Marines £100
- Royal Air Force £100
This allowance will be given by means of an adjustment to your current tax code for 2013-14 and will be shown as an ‘Earlier Years Adjustment’. In most cases the revised code number will be operated against March 2014 pay although a few may take effect in February 2014. This will usually mean that you pay less tax in the month the revised tax code is applied (if you are not currently in employment but you complete a Self Assessment tax return we will add the adjustment to your statement of account). The allowance (dependent on your length of service) will be given retrospectively to the tax year commencing 6 April 2008. You will receive the full amount of expenses due for each year of service, it will not be reduced if your service started or ceased part-way through a year.
We will also include any repayment supplement you may be due (we pay compensation to customers where there is a delay in making a repayment. This payment is called a repayment supplement (RPS)). The average annual interest rate over the period is 0.5%.
The following examples show how the repayment due will be calculated:
Andrew joins the Royal Navy as a rating in September 2009 and remains in service until March 2012. He will be entitled to the laundry FREA for 3 years (2009-10, 2010-11 and 2011-12) – this is not apportioned for his years of commencement and cessation. He is a basic rate taxpayer throughout.
2009-10 £80 @ 20% = £16 + Repayment supplement = 16.32
2010-11 £80 @ 20% = £16 + Repayment supplement = 16.24
2011-12 £80 @ 20% = £16 + Repayment supplement = 16.16
Total Repayment due £48.72
Sara joins the RAF Other Ranks in November 2013. She is entitled to the FREA for one year (2013-14) – this will not be apportioned for the year of commencement. No repayment supplement will be due as there has been no delay in making the repayment. She is a basic rate taxpayer.
2013-14 £100 @ 20% = £20 Total Repayment due £20
From 6 April 2014 the allowance will be given by your payroll department before deduction of tax.
You retain the option not to receive this FREA and can instead request a deduction for actual expenses incurred in a year. Claims for actual expenses will need to be made in writing to HM Revenue & Customs and must be supported by evidence.
We are continuing discussions with the MOD on laundry expenses for Officers and some other groups with different terms and conditions of employment.