Advance of Pay and Methods of Repayment
Aim: To define the circumstances under which SP, either assigned to or from the USA, may be eligible for an advance of pay and how these advances should be repaid.
Eligibility: Advances of pay are made to SP in the following circumstances and are to be repaid as follows:
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, SP 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/BATUS/BATUB assignments of 12 months or more duration.
- Ineligibility: Those SP serving on operational temporary assignments are excluded, irrespective of the duration.
- Repayment: the advance will be repaid within 12 months although an individual may elect to pay off the debt more quickly if they choose.
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 HMRC as being a beneficial loan) if the total amount outstanding on this plus any other concurrent beneficial loans during a tax year exceeds £10,000 at any time. 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.
Applying For Advance of Pay: Applications are to be made using form JPA E004. Completed forms for SP with an assignment to the USA should be forwarded to their current Unit HR. Forms for SP on departure from the USA should be emailed to Unit HR. (Email address at bottom of page).
Repayment of the 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
Early Repayment: Should individuals wish to repay a public debt at a rate greater than the requirement for the particular advance received, they are at liberty to do so provided it would not be at the expense of liabilities that have greater precedence. In such circumstances the individual’s unit is to retain evidence that the individual has voluntarily elected to repay the debt at a rate greater than the specified requirement.
For further information on Advances of Pay and Methods of Repayment refer to JSP 754, Chapter 7, Section 5.