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Birky
18th Oct 2004, 14:10
Aiming for a CPL I have realised that flying schools all charge VAT on their courses. Does anyone know whether there are ways around this? VAT on a £40,000 modular course is considerable! Could one argue, as a VAT registered sole trader, that one is entitled to the VAT back? Tall order I know, but all info gratefully received.

Birky

Sensible
18th Oct 2004, 14:57
:} :} :} Could one argue, as a VAT registered sole trader, that one is entitled to the VAT back? Nice idea, unfortunately, not the first time to be thought of. If your business activity is not in aviation, you may as well argue that you should get the VAT back on a shiny new TV for your lounge. You could phone your VAT office for a definitive answer though. I for one would be amazed if the answer was yes!

cliste
18th Oct 2004, 16:32
Hi Guys

Just for the record there is no VAT on flight training in the Republic of Ireland.

www.nfc.ie

www.ptc.ie


Regards,


Cliste

distaff_beancounter
18th Oct 2004, 18:05
Could one argue, as a VAT registered sole trader, that one is entitled to the VAT back?
Only if your VAT registered business is such, that it can prove it needs the services of an in-house CPL and can justify the cost of the commercial flight training as a genuine business expense.

So for instance, British Airways can legitimately reclaim the VAT it pays on training fees to FTOs, that train BA's sponsored pilots.

helicopter-redeye
18th Oct 2004, 19:09
I checked this out with my friendly neighbourhood account, based on owning a business that is aviation related (hiring planes) and if you claim back the VAT on the ATPL training then you become liable for personal tax on the P11D benefits schedule based on the 'benefit' you gain personally from it being paid for by the company you are putting it through.

Thanks to Mr G Brown for this complex, sewn up tax system.

h-r

(but if you find a legal way around it let me know!)

daw
19th Oct 2004, 08:12
Its not really that complex. The whole point of the VAT system is that the end user pays 17.5%, period. When you go to a UK flight school and buy services from them you are the end user and the one that benefits from these.

The only way around it is to setup a company and register for VAT but then you will fall down if HMC&E ask you what your intended business is once the training is over. That is because unless you are planning to land a job which allows you to invoice for your services and thus charge VAT to your client then you will never ever be in a position to charge VAT. They will also more than likely require some sort of evidence that you intend to carry on this company of yours as a taxable activity generating income and hence VAT which will be charged onto some punter.

You of course also get hit for the other reasons that your accountant has advised by the revenue.

Birky
22nd Oct 2004, 19:22
Thanks for the feedback guys, particularly the info on Irish flying schools.

Given that there are always lots of qualified FI's out there looking to build hours, added to my desire to build hours and to avoid VAT, maybe then it makes sense to start a flying business.

This would then show HMCE that I had a legitimate reason for claiming VAT back on my training, plus VAT back on fuel and maintenance for the aircraft. The sub-contracted instructor is happy cause he gets his hours, I'm happy 'cause I get my hours cheaply and don't pay VAT and the Vatman is happy 'cause I've adhered to the letter of the law.

Just a thought...

Birky

Incidentally, why on Earth don\'t pilots get some sort of zero rating for their training anyway? Seems very unfair to me. You don\'t pay VAT on college courses do you?

BIG MISTER
24th Oct 2004, 12:07
Of course if you are an MP you can have a working wage for the odd day at the house of commons, claim on average £120,000 a year in expences, run a company Jag and pay for your 2, 3 or 4 houses poll tax with tax payers money.........

Oh and its handy if you want a holiday too. Just arrange a meeting with some overseas minister to talk about trade for a couple of hours over a 5 star dinner (paid for of course) and then stay in either a Governent building or get put up by a diplomat....just one point.....you might have to pay the standard BA ticket rate for the wife and kids to come...but hey your ticket is free....and you all get to go 1st class anyway so bargin ! !

No problem dear boy........The guys paying VAT on Flight training are paying for it all !

:mad:

Flingingwings
25th Oct 2004, 17:20
BM,

Ah not quite so my little furry rodentesque no longer sunning himself friend.
That Met Cd proving useful yet :O

What you have to do is speak nicely to an accountant and create a limited company where you plan to act as a self employed pilot.

You then ask the VAt people nicely to allow you to become VAT registered before completion of training and the subsequent start of trading.

I waited till after all the ATPL's were passed ( as you will need to show you are serious and doing more then is simply required for a ppl) and most of the hours building was done. You can only claim back 12 months so I didn't get it all but did get most of it.

VAT peeps are wary as this has been abused before, but I found no real problems and forms are straight forward - even by heli pilot standards!

Fill in a from to claim VAT back every three months. C+E reserve the right (Ie WILL) to claim back any repayments should you fly straight into a job and then never trade as self employed.

Have even carried on the claiming for the hours building and course costs towards the Instructors rating with no problems.

FW

Birky
7th Nov 2004, 15:10
Thanks for the VAT info Flinging Wings. Much appreciated.

Went to the Flyer exhibition yesterday. Jerez in Spain seem to be as highly regarded as Cabair and Oxford and yet don't appear to charge any taxes on your flying.

Cheers