Tax payment change looms for airmen in England
June 28, 2006
RAF LAKENHEATH — Airmen in England will see a change in the way they get reimbursed for hundreds of dollars of British TV and road taxes each year when a new repayment plan comes into effect July 1.
Instead of incremental payments automatically inserted into their paychecks, airmen will now get penny-for-penny refunds on the two annual taxes, said Capt. Lindsey Covey from the 48th Comptroller Squadron.
The new program provides the potential for full, immediate repayment for the taxes, but shifts the responsibility for collection onto servicemembers, who will need to fill out a form and turn in tax receipts to get the money.
The change applies only to active-duty servicemembers, Covey said.
The road and TV tax are annual tariffs due shortly after an airman buys or imports a vehicle, or first plugs a TV into the wall.
After July 1, financial officers will turn off the “COLA Unique” portion of living assistance money intended to cover the two taxes for all branches of the military in the United Kingdom, Covey said.
COLA Unique currently adds about $22 per paycheck into airmen’s pockets specifically to cover the two tariffs, or a little over $500 per year. On average, with current conversion rates the road tax (average price about 175 pounds) and TV tax (131.50 pounds) add up to about $580 annually.
Under the new policy, servicemembers will have to take or send in receipts for the taxes with a form called a DD114, available online (www.dtic.mil), in order to get the money back. The payment will use the pound-to-dollar conversion rate in place on the day the tax was paid, and be added on to the servicemember’s next paycheck, Covey said.
The new program was handed down by Washington financial offices to more accurately reimburse servicemembers for actual expenses, Covey said, instead of just handing out blanket payments based on averages.
For instance, anyone importing a car into the United Kingdom does not have to pay road tax on it for the first year, and TV tax is required only if a resident taps into the national broadcasting system. The current COLA system, however, reimburses servicemembers for the taxes regardless of whether they paid them.
Cutting off the gradual drip method of reimbursements also means many servicemembers will lose part of the refund for their most recently paid taxes, Covey said.
Under COLA Unique, airmen paid for the taxes up front, then relied on the automatic reimbursement to get the money back over the year.
In effect, anyone who paid their TV and road taxes after July 2005 stands to lose some portion of the COLA reimbursement, however small. A person who paid the two taxes at the turn of 2006, for instance, stands to miss out on up to $264 in COLA Unique money because of the policy change.
Servicemembers can only submit receipts for taxes paid after June 30.
But Covey said in order to start the new program, some date had to be chosen.
“They had to draw a line in the sand somewhere,” she said.
The new system may cause many to miss out on the traditional refund through either confusion, forgetfulness or other circumstances, such as deployments, said Maj. Aaron Lawson of the 352nd Operations Support Squadron.
“I think a lot of people won’t know how to do it, or won’t be around,” Lawson said.
In a country where the U.S. dollar doesn’t go far, cutting COLA and adding an administrative step in front of reimbursement may be a tough pill to swallow for some, he said.