Six-year fight for justice could lead to £40,000 payout Pensions tax victory for Army veteran

Chris Benfield WAR veteran Richard Leigh Perkins was last night celebrating victory over his last and trickiest enemy – the Ministry of Defence. The Ministry has finally admitted a mistake made 45 years ago, which meant Major Perkins's Army pension was wrongly taxed.

The admission is a victory for persistence. The 86-year-old major, of Lastingham, near Pickering, North Yorkshire, has made a full-time job out of campaigning for his money since the Ministry refused to include him in its big concession on the tax issue, six years ago.

Now he can expect tens of thousands of pounds in refunds and compensation, after years of financial struggle.

He has paid tribute to the efforts of his local MP John Greenway, who pushed the case to a conclusion by lobbying the Minister for Veterans' Affairs, Ivor Caplin, who was appointed a year ago.

Mr Greenway himself commented last night: "This is one of those victories that makes my job worthwhile. David has beaten Goliath."

The major was mentioned in despatches for his wartime exploits in Burma with the Royal Leicestershire Regiment, but ended up suffering a nervous breakdown in Malaya in 1959, when he was 41. He was invalided out of the Army, his marriage broke up and he commuted some of his pension entitlement for a cash sum to settle his divorce.

None of his civilian jobs earned any pension, so he ended up living on a reduced Army allowance – about 420 a month now, of which he loses about 25 to the Inland Revenue.

He thought he would get the money back when other veterans won a test case in 1998 to establish that "war pensions", arising from disability caused by service should be tax-free. The Royal Navy and the RAF had always made sure that most of their veterans were treated correctly by the Inland Revenue – although they had made some mistakes – but the Army had thousands of injustices to put right.

Maj Perkins said his case was one of them. But the Ministry argued. First, it said his breakdown was not the Army's fault – and he had to go to a tribunal to win that point in 2001. Briefly, he got the tax concession, although no back pay. Then the MoD put him back to square one by arguing that because he had recovered, there was no disability element in his pension. Now it has conceded that there is and always was such an element.

Mr Greenway, the Tory MP for Ryedale, commented yesterday: "I don't know why the Ministry put up such a resistance in his case. But it does make me wonder whether there are others who still have not been fairly dealt with."

Maj Perkins said he did not know how much compensation to expect, but had seen reports that cases apparently similar to his would require 30,000 or 40,000 to settle.

He commented: "The only way I want to celebrate is to stop being a self-employed barrack-room lawyer.

"For at least three years now, I have been working pretty well full-time on sending out letters and e-mails and getting no answers.

"I do not know if there is anybody else in my position but I would not be surprised. The MoD kept saying that this pensions mess was all wrapped up, when I knew that my case was not."