Advance of Pay
Aim: To define the circumstances under which Service personnel may be eligible for an advance of pay and how these advances should be repaid.
Income Tax: In accordance with ITEPA 2003 Section 180, Advances of Pay will attract an individual liability to tax (because such an advance is classed by HM Revenue and Customs (HMRC) as being a beneficial loan) if the average amount outstanding on this plus any other beneficial loans during a tax-year exceeds £10,000. The amount liable to tax equates to the notional interest that would have been paid by the recipient had they taken the loan from a commercial lender (a rate set by HM Treasury). Where applicable, tax is normally collected by adjusting the individual’s PAYE tax code.
To an Individual Appointed to, from or between Assignments Overseas (incl. Temporary Assignments in Excess of 60 Days)
- Advance: an individual assigned to, from or between overseas assignments may receive an advance of up to four months’ net pay.
- Eligibility: To recognise the extra initial setting up costs, personnel assigned to UK appointments overseas within: UK headquarters and formations; NATO, EU and other International Organisation headquarters; loan service appointments; UK attachés, advisers and embassy-based Service support; PJOBS (continuity posts and overseas assignments) of 12 months or more duration; and BATUK assignments of 12 months or more duration.
- Ineligibility: Those personnel serving on operational temporary assignments are excluded, irrespective of the duration.
- Repayment: the advance will be repaid in 12 monthly instalments although an individual may elect to pay off the debt more quickly if they choose.
Applying For Advance of Pay: Applications for Advance of Pay are to be made using form JPA E004. Completed forms for personnel with an assignment to the USA should be forwarded to their current Unit HR. Forms for personnel on departure from the USA should be emailed to BDSUS SpGp at [email protected]
Repayment for advance of pay
There are a number of ways the SP can repay:
- It can be taken in a lump sum direct from pay.
- Send a sterling cheque to Debt Man made payable to HMG 3601.
- Or payment can be made through their online banking to:
Lloyds City office
Sort code – 30 00 02
Account number – 00409672
Reference number – Individual’s service number
Refer to JSP 754, Chapter 7, Section 5.