Can my boss pay my flying (PPL)?

[BackPacker]

Interesting thing came up this week at work.

I've got a (CAA issued) JAA PPL, no other ratings. I fly in the Netherlands, member of a flying club. My work is completely non-aviation related (IT to be more precise) and I work in a department consisting of about nine people.

We've had a good first quarter and upper management has decided that each department gets a sum of money to celebrate. Suggestion from my boss on how to spend that money was for me to take everyone flying, have lunch at the destination airfield, then fly back. There are a few practical considerations (do we go in separate groups or do I organize some friends (who may be CPL/FI) to fly us all together) but I was wondering about the legality of this.

Obviously, as a PPL, I'm not allowed to fly "for renumeration". But my job description does not include flying, so although this little celebration is going to take place on a working day, I don't think it can be considered "work" in the CAA sense. And I remember having seen case studies where the CAA found that if a PPL holder flew to a business meeting himself (with or without collegues), but the flying was only incidental to the meeting (it could have been done by car, public transport or commercial air as well), the company could reimburse the direct costs of the flight without a problem. On the other hand, in this case, the flying is not incidental to the celebration - it is a fair part of the celebration.

Apart from the practical issues, finances and so forth, what do people think of the legalities of this? Is there any case material supporting either the view that this would be legal or illegal? Or is this one of those things where you need to ask the CAA nicely to get a one-time permission?

Truth be told, we're probably going to do something else anyway, because of other practical issues, (un)predictably of weather being one. But I'm still interested in opinions, references, case studies and other forms of good advice wth regards to the legal status of this.

[gcolyer]

I use my aircraft and claim expenses back as if I would for a car. It is perfectly legal to do so. i also work in I.T. There are plenty of us about who do it.

[eyeinthesky]

My take would be:

You receive money from your company which is reward for work well done which you pay into your bank account. If you decide to take some friends and colleagues flying at your expense, then that is your business. Provided that the bill for the aircraft is not paid for by the company accounts, then it should be legal. It is a private flight.


Of cours, you may as an aside be liable for income tax as a taxable benefit on the sum paid into your account in the first place, and you cannot deduct the cost of the (private) flight from it...:(

[IO540]

Anyone saying it's not legal, please give references.

The ANO is here (http://www.opsi.gov.uk/si/si2005/20051970.htm)

[gliderman69]

Hey gcolyer,

Lucky your comapny said yes, mine blew their top, said I was stupid to ask and not to be silly and said that its was "unsafe" and I wasn't insured by them. I not I'm insured by me , much the same as any employee using their car for business they have to have business insurance.

Its not as unsafe as letting the bloke who is afraid of flying drive to Paris every time!

Goes to show its the impression that counts and not the data!!!

So well done you!

[gcolyer]

You no need to be sensible on when you choose to fly for business. For instance, If i was going to Newcastle for 2 days work it is cheaper to get an easyjet flight from Bristol and spend one night in a hotel, which means one evening meal and one breakfast.

Now if I go to Lille for 2 days work here are the choices:

1) Driver to Lille which is 7 hours travelling at 40p per mile plus the tunnel at £150, and drive back from Lille which is 7 hours travelling at 40p per mile. So that is 4 days out of the office of which only 2 are productive to the business. It also means 3 nights hotel, 3 evening meals and 3 breakfasts. So you are instantly talking a minimum of £500 expenses plus 2 lost days of productivity for travel.

2) Fly myself in a spamcan to Lille. 2 hours flight their lets say the aircraft costs £60 per hour dry. Fly myself back from Lille another 2 hours at £60 dry. Fuel cost is about £250 (max) and landing and parking fee is 31 euros (i done this last week). So I travel on the day I want to be in Lille and travel back as soon as i have finished. Which means one night in a hotel, one evening meal and one breakfast. Ok the expenses are still the same, but the business has not lost 2 days of productivty from me travelling.

It is false economy for any business to look at purely expenses.

[Islander2]

Fly myself in a spamcan to Lille. 2 hours flight their lets say the aircraft costs £60 per hour dry. Fly myself back from Lille another 2 hours at £60 dry. Fuel cost is about £250 (max) and landing and parking fee is 31 euros (i done this last week)
Do you think it makes any difference to the amount reclaimable if the spamcan is a club rental, group owned or your own?

[BackPacker]

Okay, I tortured myself and checked the ANO (IO540 thanks for the link). Here's the relevant article, I think:


Public transport and aerial work—exceptions—recovery of direct costs
161. —(1) Subject to paragraph (2), a flight shall be deemed to be a private flight if the only valuable consideration given or promised in respect of the flight or the purpose of the flight other than—
(a) valuable consideration specified in article 157(3)(c); or
(b) in the case of an aircraft owned in accordance with article 162(2), valuable consideration which falls within article 162(3);
is the payment of the whole or part of the direct costs otherwise payable by the pilot in command by or on behalf of the employer of the pilot in command, or by or on behalf of a body corporate of which the pilot in command is a director, provided that neither the pilot in command nor any other person who is carried is legally obliged, whether under a contract or otherwise, to be carried.


This (surprisingly, as I'm not a lawyer) is clear to me. I can fly the plane and get my costs reimbursed as long as I, nor any of the passengers, are contractually obliged to fly with me, and I only get the direct costs reimbursed.

The two exceptions to this are article 162(3), which deals with group ownership, and 157(3)(c) which, as far as I can tell, deals with flight exams. (But that last article is very vague and I might be wrong.)

[PompeyPaul]

I thought that you had to pay your equal share of the flight ? It was immaterial how the other's covered the cost (they can claim it on expenses etc)

So if you claim it on expenses then you are flying for valuable consideration. I.e. you are getting free flying....

[Islander2]

and 157(3)(c) which, as far as I can tell, deals with flight exams. (But that last article is very vague and I might be wrong.)157(3)(c) actually deals with aircraft rental, requiring such aircraft to be maintained to public transport airworthiness standards.

[High Wing Drifter]

Claiming expenses is legal and it has specific provision. The CAA terms this expense "motor mileage", a more readable explanation is here (ignore the title): http://www.caa.co.uk/docs/122/summary_of_public_transport.pdf

[BackPacker]

HWD, thanks. That document is written much clearer but confirms what I read in the ANO itself.

[IO540]

That 'public transport summary' flyer states

However, an exception has now been established permitting a PPL holder to recover the direct costs (but not the annual costs) in such a situation the flight being deemed private for all purposes.

but as usual avoids dealing with the definition of "direct costs". This term is not defined anywhere. I have written to the CAA stating that practically everything except the Annual (and including engine fund, prop fund, 50hr 150hr checks and in fact ALL hour-based maintenance) are 'direct costs' and while they refused to make a formal definition, they didn't disagree.

I would go further: a reasonable airframe/engine-time-based part of the depreciation is also a direct cost. This could be a huge amount of money, of course, and IMHO would make it impossible to prosecute under this clause except in the most blatent cases where a PPL sets up as some kind of private airline.

If the pilot or the employer rents the plane from outside, the 'direct cost' is clearly the full cost of renting the plane. So, the employer can provide a plane to the employee (for the said business trip) free of charge. The employee merely needs to not be contractually required to fly (can drive, etc).

[Whirlybird]

IMHO would make it impossible to prosecute under this clause except in the most blatent cases where a PPL sets up as some kind of private airline.


This is an interesting point. Has anyone ever heard of a PPL being prosecuted for breaking this particular rule? I was just wondering. We agonise over its exact meaning time and time again, on PPRuNe and off. I doubt that anyone, including the CAA, can really say in every case whether the rule is being broken or not. But have they ever prosecuted anyone?

[gcolyer]

Do you think it makes any difference to the amount reclaimable if the spamcan is a club rental, group owned or your own?


Nope.

As IO540 has stated just ensure you are not contractualy required to fly for business.

[Islander2]

.... as usual avoids dealing with the definition of "direct costs". This term is not defined anywhere.Along with 'Annual Costs', 'Direct Costs' is a term defined in the Article 155 Interpretation clause of the ANO. You may feel that the definitions are lacking in precision and therefore "fruitful grounds for dispute", as a lawyer would say, and I would agree! But the terms are defined.

[Islander2]

Quote:
Originally Posted by Islander2
Do you think it makes any difference to the amount reclaimable if the spamcan is a club rental, group owned or your own?

Nope.In which case you may like to re-read more carefully the definitions of Direct Costs and Annual Costs in Article 155 and the 'mileage clause' in Article 161(1).

If you rent the aeroplane, there's little doubt that the entire rental costs (plus landing/nav charges etc) fall within the definition of Direct Costs.

On the other hand, if you sole or group own the aeroplane, there's equally little doubt that the equivalent to those rental costs does NOT all fall within the definition of Direct Costs. IO540 will (justifiably) argue about the exact extent of the difference, but it is absolutely clear, IMHO, that the cost of insurance, parking/hangarage and that part of the maintenance that is not specifically hours related are all Annual Costs and therefore cannot be reimbursed in part on a business related flight in a sole or group owned aeroplane.

[S-Works]

I think that the Insurance, parking/hangerage are actually direct costs.
I have always billed either the hourly rate or motor milage in lieu depending on the policy of the company paying the expenses. I fly a vast amount for work, In fact I fly more than I drive, car has 6000 miles on the clock since new October and 300hrs flown since then.

As ever I think we try and get to tied up interpreting the letter of the law as some sort of self torture.

The rules are there to prevent a PPL from running a taxi service or working as a commercial pilot for reward. A PPL who is using an aircraft for business already has another job and is just using the vehicle in the same was a car or train.

No employer is going to pay to fund someone's private fun flying so it all becomes self regulating.

[High Wing Drifter]

There have certainly been cases of pilots being prosecuted for illegal Ariel or PT work!

List of prosecutions here, no details I'm afraid: http://www.caa.co.uk/default.aspx?catid=503&pagetype=90&pageid=6484

[gcolyer]

Nice to see the british justice system handing out uniform fines.

One person gets fined £4000 for no C of A
Another gets fined £400 for no Cof A

One person gets 12month conditional discharge for public transport
Another gets £150 fine for public transport

I like the one about someone trying to ship a hazardess substance to Tehran on a 747. Banged up.

[Islander2]

I think that the Insurance, parking/hangerage are actually direct costs.If so, what costs do you think are included in Annual Costs per the definition given in Article 155?

[High Wing Drifter]

gcolyer,

Slightly OT (sorry!) I think the severity of the illegal activity must be taken into account by the judge (nothing to do with CAA at that point I would think) which is a good thing. I suspect that the 747 one was the shipper who contracted BA to transport the cargo, rather than a pilot or or airline.

[S-Works]

Quote:
I think that the Insurance, parking/hangerage are actually direct costs.

If so, what costs do you think are included in Annual Costs per the definition given in Article 155?

I think the annual itself is outside of the scope? I guess it depends on how you do things. If you rent from a flyingclub they will have divided the cost of EVERYTHING to get an hourly rate so technically you are paying a proportion of the annual costs as well?

So I split the operating costs into an hour rate but leave the Annual itself out on grounds of simplicity.

A call to PLD this morning elicited the repsonse "aren't you interpreting this a bit literally?" As far as they were concerned the letter of the law is to stop PPL's providing commercial services. A PPL who is self flying for work as long as they do not HAVE to make the flight using an aircraft my expense the flight. Anything that contributes to the direct cost of that flight may be claimed. It is illegal to fly withoyt insurance so thats in, I would say that unless you are very lucky you will have to pay parking hanger and that contributes to the direct cost of the flight. The annual itself is a very grey area, but as it is generally not worked into the per hour flying costs it might not be allowable.

A PPL who is looking to have his company paying for his fun flying is considered in the same was as someone trying to claim expenses for his trip to Alton Towers!

I really do think it is how people ask the question and then listen to the answer that causes most of these threads to run and run.

At the end of the day the CAA have given an exemption and it seems to work just fine for us. Why try and pick at apart looking for problems?

[Islander2]

BoseX

Hmmm. Well the ANO defines Annual Costs as "....the costs of keeping and maintaining and the indirect costs of operating the aircraft, such costs in either case excluding direct costs ....", and Direct Costs as "....the costs actually and necessarily incurred in connection with that flight ....".

Yes, it's vague and a court would have to decide. It may look to aircraft operating industry practice as well as general accounting practice in as far as those two terms are in common usage, neither of which, IMO, would support your position that the only cost of keeping, maintaining and operating an aircraft which is not a direct cost is the cost of the annual maintenance!

No meaningful guidance is available from the CAA, despite attempts by various people to obtain one, and I'm inclined to agree that one should consider the intention behind the legislation. That said, I've been reclaiming the expense of operating my aeroplane on legitimate business for fifteen years, and I'm not at all happy with the criminal law being so vague on the quantum allowable.

[IO540]

but it is absolutely clear, IMHO, that the cost of insurance, parking/hangarage and that part of the maintenance that is not specifically hours related are all Annual Costs and therefore cannot be reimbursed in part on a business related flight in a sole or group owned aeroplane

The above I agree with.

However, the perception in the average PPL's mind of what "direct costs" are are way short of what I think they are. Most pilots think that it is just fuel and landing fees, which is way short of what I think is a much more reasonable interpretation. Of course it suits the CAA to have everybody thinking the former.

The obvious purpose of the legislation, as has been mentioned, is to prevent PPLs (and non-AOC operations generally) running taxi/charter services. The CAA sees it as vital to protect the AOC system. The FAA does the same incidentally.

The lists of prosecutions (thanks for the URLs) are interesting but tell us nothing. You would have to visit the court and examine its records. I would bet that "illegal public transport" was somebody carrying 20 people, right under the nose of some AOC holder, and when the CAA interviewed the passengers in separate sessions before they could get their story straight, 15 claimed to be friends of the pilot and paid him nuffing, and the other 5 signed statements they paid for the transport and how much :)