There is some truth to your point Very Civil Pilot, but the rate customers pay for PPL training has VAT added already. In which case for an instructor to be recognised as truly self employed the student would have to hire the plane from the club and then pay the self employed instructor separately. Hence allowing the instructor to charge VAT for his/her services separately from the amount paid to the club.
As I have mentioned in previous posts/other threads it is in my interpretation of IR35 compliance rulres that a restricted instructor cannot be self employed, therefore all instructors prior to having the restriction removed would have to be under employed status, hence it is not then possible to claim back VAT on initial FI courses.
However an unrestricted instructor working on a self employed basis though his/hers own limited company should be able to put the expense of renewals and upgrades (ie: multi engine instructor upgrades) against tax, providing all subsequent earnings are on a contract basis.
An unrestricted instructor has to work under the supervision of a FI, under IR35 an independent contractor should be able to work exactly as stated independently without supervision, therefore FI(R) cannot be self employed.
Last edited by portsharbourflyer; 4th Mar 2008 at 21:15.