I phoned the vat helpline today. Training costs are reclaimable as long as you intend to make vatable supplies. I explained that the training costs could be between £60,000 and £100,000 over three years, but vatable invoices relating to actual flying activities would be at least a year off and very slowly increase as additional training continues. I explained that some commercial work may happen after one year and maybe additional flight instructor work some months later. But it could take six years before meaningful amounts af vat would be returned to the Revenue.
I was advised that training costs must not be older than 6 months prior to date of registration. There are no specific vat notices relating to pilot training, but he suggested it was no different to driving instructor training. I did not mention that at least a driving instructor already knows how to drive and would the vat on the ppl be reclaimable?
He did not advise regarding potential grey areas but reiterated "intent".
He said that if I voluntarily registered, I would have to charge vat on all my supplies from that date. Therefore if I sell a flying toy anciliary to my piloting invoices, I would have to repay the vat on the toy, even though I had not reached the vatable turnover threshold.
I reckon by selling anciliary things, you are showing intent to trade. But the issue I have now is this. You volunteer to register and start selling goods that attract vat and you are liable to pay this back. Then you get your ppl and cpl and then make a few flying invoices (preferably within your first financial year). Then the Revenue disallow the vat on your ppl, but allow it from your cpl. The question is, if you have voluntarily registered, will you still owe the vat on your sales, even though you neednt have paid them had you waited to register until the cpl.
So yes, time to ask the accountant.......but they wont know and by the time they do the reasearch, you have spent an hour or two of flight hours. So, maybe I should ask the local vat man. But he will give you the party line and not tell you about the tribunals where pilots have won the day.
So, next. A visit to the vat man with a no holds barred list of questions. I bet I dont get definitive answers.
Last edited by staywet; 23rd Aug 2010 at 19:01.