Can you reclaim the VAT and/or tax on training costs?
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Ring them up and ask for the VAT pack - no it's not a German CD version of Frankie and co, but a comprehensive set of booklets telling all. They are extremely helpful but watch what you tell them - it ALL gets recorded !
Vat helpline - 0845 010 9000
Vat helpline - 0845 010 9000
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VAT on CPL training
Hi,
Just need some advice on VAT on CPL training - I have no experience in this at all!
Can I claim back vat on expenses towards obtaining my CPL?
I know some people create a buisness name - does this act like your are self employed therefore reclaiming vat for the buisness (obtaining the cpl eg flying training, S.F.H. and study materials)?
How do you go about this? Bank manager? Cumstoms?
Please help with any advice - This is a real grey area for me
G-MADY
Just need some advice on VAT on CPL training - I have no experience in this at all!
Can I claim back vat on expenses towards obtaining my CPL?
I know some people create a buisness name - does this act like your are self employed therefore reclaiming vat for the buisness (obtaining the cpl eg flying training, S.F.H. and study materials)?
How do you go about this? Bank manager? Cumstoms?
Please help with any advice - This is a real grey area for me
G-MADY
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This is the most recent post on this topic
However, please be aware that HM Customs & Excise have now amalgamated with HM Inspector of Taxes into HM Revenue & Customs. This means that they now talk to each other!
You'll find them here
There's a lot of spurious advice out there so best to speak to HM R&C yourself. If, for example, somebody managed to reclaim VAT from pre-PPL stage (and I am surprised they got it but then, I claimed for things that strictly, I shouldn't have been able to!), it doesn't mean to say YOU can. Rules and guidelines change and much can be down to an individual inspector.
Be totally straight and honest with them and you'll find them very helpful.
Cheers
Whirls
PS - I may be doing a disservice to bank managers but NEVER ask a bank manager for taxation advice! Go to a professional accountant and preferable one that is a member of a professional institute working in public practice.
However, please be aware that HM Customs & Excise have now amalgamated with HM Inspector of Taxes into HM Revenue & Customs. This means that they now talk to each other!
You'll find them here
There's a lot of spurious advice out there so best to speak to HM R&C yourself. If, for example, somebody managed to reclaim VAT from pre-PPL stage (and I am surprised they got it but then, I claimed for things that strictly, I shouldn't have been able to!), it doesn't mean to say YOU can. Rules and guidelines change and much can be down to an individual inspector.
Be totally straight and honest with them and you'll find them very helpful.
Cheers
Whirls
PS - I may be doing a disservice to bank managers but NEVER ask a bank manager for taxation advice! Go to a professional accountant and preferable one that is a member of a professional institute working in public practice.
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Definately go and see an accountant, mine had experience of a couple of other people who had done similar.
I was totally transparent, he ended up negotiating with tax office to get the most advantageous solution for my particular situation, suffice to say it was well worth the money. You don't need to set up a company, you'll just need a business account.
I was totally transparent, he ended up negotiating with tax office to get the most advantageous solution for my particular situation, suffice to say it was well worth the money. You don't need to set up a company, you'll just need a business account.
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Reclaiming VAT on ATPL(H) Training (UK)
Apologies if this has already been covered in another thread. I’ve searched the site but haven’t had any luck so far.
Probably a familiar story to most of you. I’m using the equity from a house sale to fund an ATPL(H) and then possibly a twin turbine rating and IR. My aim is to work offshore initially and then hopefully find my way to HEMS or Police work some time in the future.
I’ve been advised by many to consider setting myself up as a business in order to claim back the VAT on my training, but unfortunately have little idea of how to proceed.
The scary man at the VAT office has said that I must work freelance after training in order to claim, and that I must be able to prove that that is my aim.
Has anyone been through this particular minefield? Questions that spring to mind are…
Is this all a non-starter? Should I just crack on and accept this is going to cost a lot of money!
Is this an easy enough process or should I employ an accountant?
If I do claim VAT back and then don’t work freelance…what happens?
Plus many more……
I’d be grateful for any advice, experiences or referrals. Thanks in advance.
PTS
Probably a familiar story to most of you. I’m using the equity from a house sale to fund an ATPL(H) and then possibly a twin turbine rating and IR. My aim is to work offshore initially and then hopefully find my way to HEMS or Police work some time in the future.
I’ve been advised by many to consider setting myself up as a business in order to claim back the VAT on my training, but unfortunately have little idea of how to proceed.
The scary man at the VAT office has said that I must work freelance after training in order to claim, and that I must be able to prove that that is my aim.
Has anyone been through this particular minefield? Questions that spring to mind are…
Is this all a non-starter? Should I just crack on and accept this is going to cost a lot of money!
Is this an easy enough process or should I employ an accountant?
If I do claim VAT back and then don’t work freelance…what happens?
Plus many more……
I’d be grateful for any advice, experiences or referrals. Thanks in advance.
PTS
Last edited by PushToShock; 8th Feb 2006 at 16:16.
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I think the definitive post on this subject was by m'learned & gallent colleague "Kissmysquirrel" on either these very pages or that of rotorheads. Try searching for posts by him (or her?). Would have been about 12 months ago.
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PushToShock,
I started a thread on this a couple of months ago - Im in the same situation (PPL(H) 90hrs, and 3 weeks inATPL studies)
I think we came to the conclusion that you cannot reclaim vat unless you are going to charge it later for your buisness. Now be carefull, suppose you set up a buisness with the intent of acting as "self employed" when working for an offshore company but then after a year find another job and no longer charge vat - the tax man might not be happy!
The other consideration we found was that if you reclaim vat at training and therefore have to charge it for employement, it could hurt your chances - the company will just reclaim what you charge them but its just hassel... in a world where chances are slim enough anyway.
I have begun my ATPL training without reclaiming - but hope this could change?
MADY
I started a thread on this a couple of months ago - Im in the same situation (PPL(H) 90hrs, and 3 weeks inATPL studies)
I think we came to the conclusion that you cannot reclaim vat unless you are going to charge it later for your buisness. Now be carefull, suppose you set up a buisness with the intent of acting as "self employed" when working for an offshore company but then after a year find another job and no longer charge vat - the tax man might not be happy!
The other consideration we found was that if you reclaim vat at training and therefore have to charge it for employement, it could hurt your chances - the company will just reclaim what you charge them but its just hassel... in a world where chances are slim enough anyway.
I have begun my ATPL training without reclaiming - but hope this could change?
MADY
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Is this all a non-starter? Should I just crack on and accept this is going to cost a lot of money!
No, it's not a non-starter and it is possible. HM Revenue & Customs are not THAT scary; they are usually very helpful.
Is this an easy enough process or should I employ an accountant?
If I do claim VAT back and then don’t work freelance…what happens?
G-Mady, it's no extra hassle for a VAT-registered operator to reclaim the VAT you have charged. No hassle at all. A certain "HERB" software that I often recommend, will do it automatically.
Cheers
Whirls
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VAT
Hi Push To Shock
I done my training and set my self up self employed and VAT registered about 11 years ago.
As far as I know setting your self up self employed is much easier now than it was then. If you get in contact with the Inland Revenue they should be able to help you out, I went to a seminar at the Chamber Of Commerce and visited a few organisations which give advice on going self employed, this was free so I would not bother getting an accountant these organisations can tell you all you need to know.
You will have to say that you intend to make your living self employed.
When I originally registered self employed Customs & Excise told me that I would have to make my first sale before they would pay me the VAT which I had paid out for training back.
My first sale was working for the company which provided my helicopter training, I worked ground crew for them for the day, sent them an invoice, done my VAT return and got the VAT back from my training, no problem. At this point I had not even finished my training.
When you register as self employed you will be asked what type of activities you will be doing, don't just say pilot, don't forget ground crew services, helicopter sales etc. This will allow you to claim that VAT back before you finish your training.
.
I done my training and set my self up self employed and VAT registered about 11 years ago.
As far as I know setting your self up self employed is much easier now than it was then. If you get in contact with the Inland Revenue they should be able to help you out, I went to a seminar at the Chamber Of Commerce and visited a few organisations which give advice on going self employed, this was free so I would not bother getting an accountant these organisations can tell you all you need to know.
You will have to say that you intend to make your living self employed.
When I originally registered self employed Customs & Excise told me that I would have to make my first sale before they would pay me the VAT which I had paid out for training back.
My first sale was working for the company which provided my helicopter training, I worked ground crew for them for the day, sent them an invoice, done my VAT return and got the VAT back from my training, no problem. At this point I had not even finished my training.
When you register as self employed you will be asked what type of activities you will be doing, don't just say pilot, don't forget ground crew services, helicopter sales etc. This will allow you to claim that VAT back before you finish your training.
.
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Best speak to an accountant on this. Like Solicitors, many offer a free initial consultation. You will need to become self employed and register for VAT. Some of my business associates have claimed back the vat on PPL (H) training and left it to their accountants to sort it out, then justify it with the VAT people. Also talk to your local training and enterprise council and find out about a free bookkeeping and business advice course.
Whirlybird may be a good person to advise here as she was self employed before starting her PPL training. PM her.
Mike
Whirlybird may be a good person to advise here as she was self employed before starting her PPL training. PM her.
Mike
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I'm not a professional pilot, but I am a business man so.. Fact .. you can claim VAT and not charge for it... e.g If you were to manufacture childrens clothes, you would pay and claim back the vat on the fabrics and threads to make them. But would not charge vat on the finished products as there is no vat on childrens clothes. You would in fact be receiving a cheque from the vat office every three months.
These days there is no real hassle with modern accountancy software. The one I use produces a VAT return on screen. I just copy it into the paper vat return and send them a cheque for the difference between the vat I collect from customers and the vat I claim on goods and services.
Bottom line.. Talk to an accountant on the best move.
These days there is no real hassle with modern accountancy software. The one I use produces a VAT return on screen. I just copy it into the paper vat return and send them a cheque for the difference between the vat I collect from customers and the vat I claim on goods and services.
Bottom line.. Talk to an accountant on the best move.
Originally Posted by g-mady
PushToShock,
I started a thread on this a couple of months ago - Im in the same situation (PPL(H) 90hrs, and 3 weeks inATPL studies)
I think we came to the conclusion that you cannot reclaim vat unless you are going to charge it later for your buisness. Now be carefull, suppose you set up a buisness with the intent of acting as "self employed" when working for an offshore company but then after a year find another job and no longer charge vat - the tax man might not be happy!
The other consideration we found was that if you reclaim vat at training and therefore have to charge it for employement, it could hurt your chances - the company will just reclaim what you charge them but its just hassel... in a world where chances are slim enough anyway.
I have begun my ATPL training without reclaiming - but hope this could change?
MADY
I started a thread on this a couple of months ago - Im in the same situation (PPL(H) 90hrs, and 3 weeks inATPL studies)
I think we came to the conclusion that you cannot reclaim vat unless you are going to charge it later for your buisness. Now be carefull, suppose you set up a buisness with the intent of acting as "self employed" when working for an offshore company but then after a year find another job and no longer charge vat - the tax man might not be happy!
The other consideration we found was that if you reclaim vat at training and therefore have to charge it for employement, it could hurt your chances - the company will just reclaim what you charge them but its just hassel... in a world where chances are slim enough anyway.
I have begun my ATPL training without reclaiming - but hope this could change?
MADY
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Sewing Machine Man,
I am a little bothered by your reply as it seems to imply (or maybe I have inferred) that there is an option to charge VAT.
If your turnover/sales are over a certain amount (£60k), you must register for VAT. You can register for VAT voluntarily if your turnover is less than that and it is acceptable to do this if you can reclaim initial business set-up costs (i.e. training).
It is a little erroneous to talk about VAT on children's clothing since we are not talking about children's clothing here on rotorheads. Anyone setting up as a freelance pilot will be making VAT-able supplies. The supply is VAT-able whatever; it's just that under a certian limit, HMR&C don't mandate that you account for it.
Strictly speaking, there is VAT on children's clothes just as there is VAT on food and books. It's just that the rate of VAT is zero. This is different to items that are exempt or outside the scope of VAT. You have to make sure that you account for your zero-rated supplies differently to your exempt supplies. The reason for this is that it only requires the Chancellor's budget to raise the rate of VAT on these items; the exempt items would require an Act of Parliament to change.
I don't wish to obfuscate the issue but I don't want anyone to think that there is an option to charge VAT - there isn't in this context (unless you don't want to register and won't earn more than £60,000).
I would also add that you can only reclaim VAT on going back 6 months for services (which is what training is classified as) and 3 years for goods (i.e. your Pooley's CRP-5) from when you register. If you do a PPL and then decide you want to go CPL, then you won't get the VAT back on the PPL unless you register within 6 months and can prove that CPL was your intention all along. Whether you get that one past the VATman is down to the individual inspector.
Cheers
Whirls
I am a little bothered by your reply as it seems to imply (or maybe I have inferred) that there is an option to charge VAT.
If your turnover/sales are over a certain amount (£60k), you must register for VAT. You can register for VAT voluntarily if your turnover is less than that and it is acceptable to do this if you can reclaim initial business set-up costs (i.e. training).
It is a little erroneous to talk about VAT on children's clothing since we are not talking about children's clothing here on rotorheads. Anyone setting up as a freelance pilot will be making VAT-able supplies. The supply is VAT-able whatever; it's just that under a certian limit, HMR&C don't mandate that you account for it.
Strictly speaking, there is VAT on children's clothes just as there is VAT on food and books. It's just that the rate of VAT is zero. This is different to items that are exempt or outside the scope of VAT. You have to make sure that you account for your zero-rated supplies differently to your exempt supplies. The reason for this is that it only requires the Chancellor's budget to raise the rate of VAT on these items; the exempt items would require an Act of Parliament to change.
I don't wish to obfuscate the issue but I don't want anyone to think that there is an option to charge VAT - there isn't in this context (unless you don't want to register and won't earn more than £60,000).
I would also add that you can only reclaim VAT on going back 6 months for services (which is what training is classified as) and 3 years for goods (i.e. your Pooley's CRP-5) from when you register. If you do a PPL and then decide you want to go CPL, then you won't get the VAT back on the PPL unless you register within 6 months and can prove that CPL was your intention all along. Whether you get that one past the VATman is down to the individual inspector.
Cheers
Whirls
