Annual pilot tax free allowance...
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Annual pilot tax free allowance...
Afternoon,
Does anyone have any information regarding the annual £900 (UK only) tax free allowance pilots are entitled to? I realise you need to a fill in a tax return but I was wondering if there is a list anywhere dictating what you are actually allowed to claim?
I intend to claim back tax on a headset and hopefully a netbook, both used for flying. But I've heard other flight crew talk of being able to claim things such as food and drink, assuming they were brought +/- 1hr from a duty or anytime away from base during a duty period and assuming you've kept receipts.
Official links and citations to answers would be greatly appreciated
Does anyone have any information regarding the annual £900 (UK only) tax free allowance pilots are entitled to? I realise you need to a fill in a tax return but I was wondering if there is a list anywhere dictating what you are actually allowed to claim?
I intend to claim back tax on a headset and hopefully a netbook, both used for flying. But I've heard other flight crew talk of being able to claim things such as food and drink, assuming they were brought +/- 1hr from a duty or anytime away from base during a duty period and assuming you've kept receipts.
Official links and citations to answers would be greatly appreciated
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HMRC's website should answer most of your questions.
This is a Fixed rate expense allowance available to uniformed airline crew. It substitutes for the submission of a variety of variable expense claims.
There are a number of capital expense allowances where tapered relief may be given, however it is unlikely you could claim for a notebook or for a headset, unless it is a noise cancelling headset where no alternative provision is made by your employer.
There is no provision for "food & drink" under the FREA. I think you may be confusing the recent submission audit conducted by HMRC in respect of the taxation of aircrew allowances, where these elements were in part included in those submissions.
Food and drink, do not normally pass the "wholly, exclusively and necessary" tests for submission as allowable expenses for aircrew.
The website should help.
This is a Fixed rate expense allowance available to uniformed airline crew. It substitutes for the submission of a variety of variable expense claims.
There are a number of capital expense allowances where tapered relief may be given, however it is unlikely you could claim for a notebook or for a headset, unless it is a noise cancelling headset where no alternative provision is made by your employer.
There is no provision for "food & drink" under the FREA. I think you may be confusing the recent submission audit conducted by HMRC in respect of the taxation of aircrew allowances, where these elements were in part included in those submissions.
Food and drink, do not normally pass the "wholly, exclusively and necessary" tests for submission as allowable expenses for aircrew.
The website should help.
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Flat Rate Expense Allowance
Hi
Does anyone actually use this allowance of £850? Click on this link for information:
Airline pilots: industry wide FRE for 2006/07 onwards: introduction
From what I understand we don't have to prove how we spent the £850, we can just claim it in a tax return.
Cheers
Does anyone actually use this allowance of £850? Click on this link for information:
Airline pilots: industry wide FRE for 2006/07 onwards: introduction
From what I understand we don't have to prove how we spent the £850, we can just claim it in a tax return.
Cheers
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There are frequent misconceptions about this allowance.
It assumes zero employer contributions ie per diems. Total untaxed per diems for the year should be deducted, as should any direct expense claims you have made to the employer.
So there is a choice between using this flat allowance, or claiming individually for items, which may or may not be allowable. However, you cant just pocket your per diems AND pocket the £850 allowance (unless your per diems happen to be £850 short of your actual costs, which in my case flying long, long-haul trips on pitiful allowances, is possible).
The easiest (only?) way of making the claim is by doing a self assessment form, which anyone can choose to do.
It assumes zero employer contributions ie per diems. Total untaxed per diems for the year should be deducted, as should any direct expense claims you have made to the employer.
If the employer makes a contribution towards its pilots' allowable expenses (as shown in the above list), or provides a significant amount of the equipment shown in the list, the FRE for those pilots should be reduced accordingly
The easiest (only?) way of making the claim is by doing a self assessment form, which anyone can choose to do.
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Whilst on the subject.... would anyone be able to shed some light on the issue of claimimg for an iPad through the tax return, i.e. is this something that can be offset on "expeneses necessary for the job"?
Thanks
Thanks
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On the tax return, in the 'Employment' section, there is a box with the title 'Fixed deductions for expenses', it goes in there.
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The noise cancelling headset you can claim as a capital expense if your employer does not provide one. Not sure if you have to fill in a tax return or not (I do for several other reasons). You have to claim for it for several years in a row to get the maximum tax relief (on a self assessment form anyway).
The notebook is very hit and miss wether the tax office will allow the claim or not. Very dependant on who oversees your return I think. Some pilots have been successful others not.
I found all this out through balpa (and I claim my sub back too, well 66% of it anyway).
You have the right to claim a lot of tax relief for many things and it always stuns me when I fly with very long serving experienced pilots who only have the basic tax relief code (722L this year I think). The tax office have decreed you're entitled to this relief, take advantage of it!
Last edited by gorter; 7th Sep 2012 at 22:17.
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To clear up a misconception,
YOU DO NOT GET £850.
The figure is an additional amount added to your "tax -free" earnings allowance.
If, for example, you were earning £850 a year over the higher-rate threshold, you'd pay 40% ? tax on it. by claiming the fixed allowance, you'd get £340 back (or that much more in your year's take-home pay.
Many trades and professions have a negotiated agreement with the taxman. AFAIK, in the absence of any employer contribution (your per diem allowance IS a contribution) you are entitled to claim the fixed allowance irrespective of what you ACTUALLY spent.
If you spent more than the fixed allowance, you have to weigh up if it's worth the effort of making up accounts and submitting a tax-return to claw back the overpaid tax.
Usually, the taxman's test is that the expense was"necessarily and wholly" incurred in the performance of your job. In the case of the notebook, if you can prove it's used solely for work, it's claimable, if there's a private-use element, the allowable expenditure will be reduced proportionately. likewise the headset (your Union could put up a strong case for the inadequacy of the standard airline issue h/set, though the "elf n' safety " aspect of inferior hearing protection, may mean the employer would strenuously deny their offering was lacking.
REMEMBER, you do NOT "get back" what you paid out.....you only get it allowed as tax-free income.....but the plus-side is that it "Top-slices" your tax,- that is, the allowance is at your highest rate.
I'm NOT an accountant nor a tax-expert and i'm rapidly losing touch with the arcane rules of tax and employment...so don't take this as gospel!
YOU DO NOT GET £850.
The figure is an additional amount added to your "tax -free" earnings allowance.
If, for example, you were earning £850 a year over the higher-rate threshold, you'd pay 40% ? tax on it. by claiming the fixed allowance, you'd get £340 back (or that much more in your year's take-home pay.
Many trades and professions have a negotiated agreement with the taxman. AFAIK, in the absence of any employer contribution (your per diem allowance IS a contribution) you are entitled to claim the fixed allowance irrespective of what you ACTUALLY spent.
If you spent more than the fixed allowance, you have to weigh up if it's worth the effort of making up accounts and submitting a tax-return to claw back the overpaid tax.
Usually, the taxman's test is that the expense was"necessarily and wholly" incurred in the performance of your job. In the case of the notebook, if you can prove it's used solely for work, it's claimable, if there's a private-use element, the allowable expenditure will be reduced proportionately. likewise the headset (your Union could put up a strong case for the inadequacy of the standard airline issue h/set, though the "elf n' safety " aspect of inferior hearing protection, may mean the employer would strenuously deny their offering was lacking.
REMEMBER, you do NOT "get back" what you paid out.....you only get it allowed as tax-free income.....but the plus-side is that it "Top-slices" your tax,- that is, the allowance is at your highest rate.
I'm NOT an accountant nor a tax-expert and i'm rapidly losing touch with the arcane rules of tax and employment...so don't take this as gospel!
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You don't need to do a tax return to claim the tax relief. All it took when I did it earlier this year was a phone call to HMRC. I claimed for the last 5 years I think. A simple phone call and my tax code was changed and barely 2 weeks later a refund cheque for £1300 arrived on my doorstep.
Purveyor of Egg Liqueur to Lucifer
FRE Increase for Next Year :-)
EIM50050 - Airline pilots: industry wide FRE for 2013/14 onwards: introduction
EIM50051 - Airline pilots: industry wide FRE for 2013/14 onwards: summary
EIM50052 - Airline pilots: industry wide FRE for 2013/14 onwards: details
EIM50051 - Airline pilots: industry wide FRE for 2013/14 onwards: summary
EIM50052 - Airline pilots: industry wide FRE for 2013/14 onwards: details
EIM50050 - Airline pilots: industry wide FRE for 2013/14 onwards: introduction
HMRC and the British Airline Pilots' Association (BALPA) have agreed an increase to the industry wide Flat Rate Expenses allowance (FRE) which applies to all uniformed commercial pilots and co-pilots (including helicopter pilots), and other uniformed flight deck crew, for 20013/14 onwards. The agreement updates the national agreement that was effective from 2006/07 onwards, which in turn replaced all locally agreed FREs for the employees concerned.
The main features of the agreement are:
The FRE applies to all uniformed commercial pilots, co-pilots and other uniformed flight deck crew working in the UK
It does not apply to cabin staff (stewards and stewardesses)
The basic FRE is £1,022 and it applies from 2013/14 (increased from £850, which applied from 2006/07). For details of what is included, see EIM50052 and EIM50059
There is a further expenses deduction (EXP) of £110 (increased from £100 which applied from 2006/07) to cover the allowable cost of travel to certain regular, specified activities (see EIM50060).
For a full summary of what can be allowed under the terms of this agreement, see EIM50051.
HMRC and the British Airline Pilots' Association (BALPA) have agreed an increase to the industry wide Flat Rate Expenses allowance (FRE) which applies to all uniformed commercial pilots and co-pilots (including helicopter pilots), and other uniformed flight deck crew, for 20013/14 onwards. The agreement updates the national agreement that was effective from 2006/07 onwards, which in turn replaced all locally agreed FREs for the employees concerned.
The main features of the agreement are:
The FRE applies to all uniformed commercial pilots, co-pilots and other uniformed flight deck crew working in the UK
It does not apply to cabin staff (stewards and stewardesses)
The basic FRE is £1,022 and it applies from 2013/14 (increased from £850, which applied from 2006/07). For details of what is included, see EIM50052 and EIM50059
There is a further expenses deduction (EXP) of £110 (increased from £100 which applied from 2006/07) to cover the allowable cost of travel to certain regular, specified activities (see EIM50060).
For a full summary of what can be allowed under the terms of this agreement, see EIM50051.
