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Register as a company-> reduce training expense?
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Forest4ever
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PostPosted: Tue May 31, 2011 8:21 pm    Post subject: Register as a company-> reduce training expense? Reply with quote

Hello,

As anyone looked into registering as a company and then declaring the PPL training as a business expense, allowing the 'company' to claim back the VAT and treat the training cost as an 'expense' that is deductible from a yearly tax allowance standpoint?

Fully appreciate if you did set up a company related to flying, there's probably a basic expectation that you can fly so may not be applicable to PPL or even CPL, but for future training thereafter?
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flingingwings
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PostPosted: Tue May 31, 2011 9:18 pm    Post subject: Reply with quote

Short answer:

Yes, people have looked into it, and successfully created companies.

Any accountant could advise you

From HMR+C viewpoint the company created MUST have an intention to trade. Ie you create a business to trade as a pilot in order to offset costs and/or reclaim VAT. Ergo, you'd have to trade and work as a pilot. How would merely obtaining a PPL satisfy that requirement? How could you justify to HMR+C what is effectively a hobby?

Historically many have tried and HMR+C are VERY wary of any pilots in training trying to reclaim costs by creating a business. If your ultimate plan is to trade as a self employed pilot then create a business, if not, then I wouldn't bother. I did just as you enquire, and was successful with HMR+C, but I was subject to a great deal of scrutiny. They are not an organisation worth trying to deceive IMHO.
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Forest4ever
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PostPosted: Wed Jun 01, 2011 7:50 am    Post subject: Reply with quote

thanks for your answer, very interesting...
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Heliwhore
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PostPosted: Wed Jun 01, 2011 8:53 am    Post subject: Reply with quote

Yeah some have got away with it, some not. They will also ask questions on claiming for the PPL section, even if you go on to CPL etc, as the PPL is not a proffessional qualification and therefore cannot bring revenue for the Co. Even though we all know you can't get one without the other...

I claimed most of my training costs this way except PPL as above. I also got audited by the tax Nazis and had to pay a little of it back, initially... It all depends on how you argue it.

If it is a recurrency training, then it is a deductable expense, however, if it is a new skill (which learning to fly is) then it must be classed as a capital expense. Which basically means that you can't write this off directly to earnings, however you should be able to depreciate it over a number of years of future earnings.

two pence and all......
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PostPosted: Wed Jun 01, 2011 11:21 am    Post subject: Reply with quote

This is a very timely post for me, just post-CPL (did I mention I passed..? Laughing ), as I plan to do just this.

My cunning plan is to set up a business as a freelance pilot/instructor (FI course within the next year is the plan) and that is what I will do for at least the next four years, part-time, until I leave my day job. If anyone has been through the process, all advice and tips are gratefully received.
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PilotWolf
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PostPosted: Wed Jun 01, 2011 12:42 pm    Post subject: Reply with quote

DBChopper wrote:
This is a very timely post for me, just post-CPL (did I mention I passed..? Laughing ), as I plan to do just this.


Not sure the party will be tax deductible though DB...

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seanhump
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PostPosted: Wed Jun 01, 2011 1:35 pm    Post subject: Company stuff.... Reply with quote

Dave...

Give me a bell if you need any insight on this - Have done it myself and found it pretty straight forward - company setup and VAT registration, along with a reasonable refund for VAT on the training .... and not too many probing questions from Her Majesty's finest....

All that said, another pilot I know (new FI) has had his VAT stuff turned down initially - not sure how he's progressed with it....

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PostPosted: Wed Jun 01, 2011 3:02 pm    Post subject: Reply with quote

PilotWolf wrote:
DBChopper wrote:
This is a very timely post for me, just post-CPL (did I mention I passed..? Laughing ), as I plan to do just this.


Not sure the party will be tax deductible though DB...

W.



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DBChopper
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PostPosted: Thu Jun 02, 2011 10:41 am    Post subject: Reply with quote

Business lunch indeed - good answer wav

Sean - will do. I didn't realise you'd done it.
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PostPosted: Fri Jun 03, 2011 7:41 am    Post subject: Reply with quote

Congatulations DB
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PostPosted: Sat Jun 04, 2011 9:23 am    Post subject: Reply with quote

Thanks Heliwhore Cool
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