The benefits in kind can quickly erode any advantages
At 40% tax on 20% of the purchase cost, that is an understatement of the year
Let's say the Revenue go after you 5 years after you started the business which involves renting out a £200k plane. The BIK tax bill is going to be £80k, less amount made good for the proprietor's actual private flying.
The above is my understanding - correct me anybody if I have it wrong.
You can take the BIK tax on the chin and just pay it, if you do something of the order of 400 hrs/year or more. A lot of people do that with very high-end company cars (say £200k Ferraris) because it's cheaper to pay the tax than to run the car privately. But for most people this doesn't make sense.
The situation is less bad with some old banger of a plane, of course.
The thing is that the Revenue can let the business run as long as they want, and then hit you. Perhaps following a tipoff from a neighbour, when you win a planning permission on a house extension which he objected to. They just need to find some tiny accounting mistake (which they always can) and then they can open an enquiry.
I hate scaremongering on here (plenty of people do it, and aviation is so full of dark clouds already) but I think this is a real problem. In the case I am familiar with I think the tax inspector is a bit of a d1ckhead who is ahead of himself and is out to get anybody who earns more than he does (quite a common thing in today's Inland Revenue) but most targets will settle if hit hard enough (the standard practice) so justice doesn't come into it.
A limited partnership may be a better solution to the liability limitation requirement. The only other sure solution is for the proprietor(s) of the business to have no private-use access to the fleet, both contractually documented and actual.