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Old 2nd Nov 2003, 00:30
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distaff_beancounter
 
Join Date: Oct 2001
Location: Dorset, UK
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Getting VAT Registered

There is one problem that is often encountered when trying to register for VAT, before any VATable sales, are on the horizon. This is proving to the Customs & Excise's (C&E) satisfaction, an "intention to trade".

An intention to spend money on flight training is not deemed to be an intention to trade. C&E usually ask for some evidence of where the future income is coming from. eg have you got any definite sales or contracts to supply services?

Then you have to consider where C&E regulations collide with Inland Revenue (IR) regulations. Once you have got your fATPL, you are probably hoping to get work with an airline. In which case, to comply with IR regulations, the airline will usually treat you as an employee, & pay you net pay after deduction of PAYE/NIC. In these circumstances you cannot charge the airline VAT on your services as a pilot. So no VATable sales.

The only way to show the C&E potential VATable sales, would be to show self-employed income as a pilot. eg can you find an airline, flying school or other aviation company, that will hire your services as a self-employed sub-contractor? If so you can then charge VAT on your services as a pilot.

However, under IR regulations, a worker (you) and an employer, cannot simply decide to treat the worker as self-employed, even if both worker & employer agree to the arrangement. It is another complicated question that depends on the terms of service, amongst other things.
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