DPF Briefing

Aug 2005

Tax Position of MDP Officers
on Overseas Deployment

Income Tax paid by members on Overseas Deployment regardless of where the mission is based will not be reimbursed by the Inland Revenue despite their considered status as “Crown employees”.

The rule relating to this is that a “Crown employee” is deemed to remain UK resident throughout their secondment and their salaries will therefore bear UK income tax in the normal way throughout any period of assignment overseas. MDP officers assigned to Overseas Deployment are treated as “Crown employees” for this purpose.

Although Income Tax paid out has –in the past- been reimbursed, this was in error and the Inland Revenue will seek to recover any payment made in this way. Any member so affected may contact the DPF for advice.

It is Section 27 & 28 of the Income Tax (Earnings and Pensions) Act 2003 which outlines the Inland Revenue position. Essentially there is no cessation of (MDP) employment nor is a contract of employment (with FCO) entered into. The regulations for retired officers working in theatre will be different due to their employment status.

The matter has been looked into by an Independent Financial Advisor who concurs with the ruling. MDP officers volunteer to serve on UN Missions and are aware of the Conditions of Service and paid allowances in theatre prior to their deployment. These allowances are paid as daily living expenses which should be spent accordingly. The Inland Revenue would regard any monies left over as a taxable income.

The fact that other countries may reimburse their nationals at a different rate is unfortunately of no concern to the British government or the Inland Revenue. However the fact that MDP are identified as “Crown employees” for the purpose of taxation but not in regard to access to facilities in theatre is of concern to the DPF.

It is our intention to explore the guidelines surrounding Annual Leave and (local) Allowances but whilst there continues to be a pool of volunteers waiting to deploy on UN Missions aware of the employment conditions attached it dilutes our position. Whilst there is no guarantee that the matter will be addressed to the satisfaction of those individuals concerned; a positive outcome would at least recognise the role carried out by MDP where there is no fiscal enhancement present.

Eamon Keating
National Chair