Income Tax Relief on Resettlement Expenses Explained

This one is usually asked backwards, so it's worth separating two things.

The money you receive is exempt. Resettlement grants, resettlement commutation and gratuity earnings are excepted from income tax under Section 411 ITEPA 2003, with the detail set out in the Armed Forces (Redundancy, Resettlement and Gratuity Earnings Schemes) (No. 2) Order 2010. You don't claim that exemption — it just applies, so the figure you're quoted is the figure you keep.

Funded training works the same way. ELC and IRTC money goes to the training provider rather than to you, so there's no tax event for you to deal with.

Relief on what you spend yourself is much narrower. There's no special armed forces scheme for it. Anything you paid for out of your own pocket falls under the ordinary employee-expenses rules, and those are strict — the cost has to be necessary for the job you hold, which generally rules out job-hunting and retraining for a role you don't have yet.

If you think you have a claim, check the current HMRC guidance before assuming it qualifies.

Who is eligible?

For the exemptions, everyone receiving those payments. A resettlement grant, resettlement commutation or gratuity earnings arrive free of income tax without you doing anything.

For relief on your own spending, the test is the ordinary one for employees: the expense has to be incurred wholly, exclusively and necessarily in performing the duties of your employment. Retraining for a future job usually fails that test, however sensible the spending was.

Two things are worth doing either way. Keep receipts, because a claim without evidence goes nowhere. And check your tax code after you leave — an emergency code costs most people more than any expenses claim would have returned.

What benefits does this provide?

Income Tax Relief on Resettlement Expenses provides several benefits to military service leavers and veterans:

  • Financial Savings: Reduces the taxable income, leading to lower tax liabilities.
  • Increased Disposable Income: More take-home pay, easing the financial transition to civilian life.
  • Support for Career Transition: Covers costs related to job search, training, and relocation, making it easier to secure new employment.
  • Enhanced Financial Planning: Allows for better budgeting and financial management during the resettlement period.
  • Stress Reduction: Eases financial burdens, reducing stress and allowing focus on career and personal adjustments.
  • Encouragement for Skill Development: Incentivises investment in further education and training, enhancing employability.
  • What it covers: Travel, accommodation and professional fees can all qualify, provided you paid them yourself and they relate to your resettlement.

How do I apply?

  • Check Eligibility: Ensure your resettlement expenses qualify for tax relief. Typically, these include costs for training, travel, and relocation.
  • Gather Documentation: Collect all receipts and records of your resettlement expenses. This includes invoices for courses, travel tickets, and moving services.
  • Complete the Self-Assessment Tax Return:
  • Log in to your HMRC online account.
  • Go to the self-assessment section.
  • Enter your resettlement expenses in the appropriate fields.
  • Submit Supporting Documents: Attach scanned copies of your receipts and any other relevant documentation to your online tax return.
  • Claim Through Your Employer: If applicable, your employer may handle the tax relief claim on your behalf. Check with your HR department for their process.
  • Consult HMRC Guidance: Visit the HMRC website or contact their helpline for detailed instructions and assistance.
  • Keep Records: Retain copies of all submitted documents and correspondence for future reference.

Common questions

Can you claim tax relief on resettlement costs?

You can claim relief on costs directly related to your resettlement, such as training courses, job-search activities and relocation, where you paid them yourself.

Are resettlement training courses tax deductible?

Only where the cost was not reimbursed by the MoD or anyone else. Relief applies to what you actually met yourself.

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Last reviewed 26 August 2026 by Brittany Belt, Co-founder and COO