Army faces £50m pensions bill

BRITAIN'S armed services face a new compensation nightmare after revelations that 1,000 former soldiers and their widows were deprived of millions of pounds in pensions, some for up to 50 years. The cost of reimbursement could be as high as £50m.

At the same time, the High Court told injured veterans on Tuesday that they now have the right to sue for negligence, a ruling that could cost up to £58m.

The MoD has admitted that soldiers injured and pensioned out of the Army in most major conflicts since the Second World War are owed tax that should not have been deducted from their pensions. Most are thought to have missed out on sums of between £30,000 and £100,000.

The error came to light last year after a four-year campaign by Major John Perry, a former Royal Artillery officer who was discharged on medical grounds in 1971.

The 1952 Income and Corporation Taxes Act made pensions tax-free if they were granted on account of medical unfitness 'attributable' to naval, military or air force service. The Royal Navy and the RAF made the correct calculations, but civil servants administering Army pensions failed to take account of the legislation and continued to deduct tax.

The High Court ruling means thousands of compensation cases over the death or injury of British soldiers can proceed. Mr Justice Keith backed a claim that the current immunity from legal action was incompatible with the European Convention on Human Rights.