Can you reclaim the VAT and/or tax on training costs?

[rotormad]

Ok can some PLEASE point me in the right direction..even close to it would be good...

I have started my ATPL studies and my commercial course and have been told by various flying school that if i go 'self employed' i can claim vat/tax back. When i have pushed these 'flying schools' for further info and advice they become rather tight lipped!!

Can someone pleae elaborate on this issue, i would really appreciate it, if i can save myslef a bit of cash...........i would be very grateful.

Ohh i have tried two acountants already, neither could help me!!


Cheers

rotomad

[headsethair]

0845 010 9000 - the National Advice line for VAT or see the website at www.hmce.gov.uk.

VAT has no simple rules. :mad:

[Whirlybird]

rotormad,

It really is quite simple. You set up a business as a self-employed helicopter pilot. Since you are a Sole Trader, all this involves is filling in a form telling the VAT people that this is what you are. You are then allowed to claim back VAT on your training costs. If it's your only business (I was self-employed in another capacity anyway, so it didn't quite apply) you MAY be asked for a simple business plan, ie what you're doing and when you might finish training etc - I've heard of this happening to one person. You then keep all your receipts, and claim back the VAT on a simple form every three months. Easy-peasy, and quite legal. I was told the same thing by flying schools, but my accountant asked me to check with the VAT help line. I did, emphasising that I wouldn't be earning for quite a while; they said it was legal, and even gave me the rules and time limits for claiming back VAT already paid (3 years for products, 6 months for services I think - ask them). My accountant still wouldn't believe it, and I nearly changed accountants, but the next time I went to see him he seemed quite happy, so I guess he'd checked it himself. He set it all up for me, but I do it myself now, as it really is very easy.

I believe you live quite close to me. My accountant is in Oswestry, Shropshire, and has been through all this with me already, so he knows about it. If this is convenient for you, and you'd like his phone number, send me a PM or email, and I'll get back to you as soon as I can, which may not be till next weekend as I'm off down to Thruxton again this afternoon.

Good Luck!

[rotormad]

Thanks for the info, however the only snag was that i was under the impression that you could only claim VAT back to the amount that you have invoiced for (within a business setting)...i obviously must be wrong...onto the accountants>...

Cheers all the same

Rotormad

[Draco]

"i was under the impression that you could only claim VAT back to the amount that you have invoiced for ....."

Not so. if you have more inputs than outputs, HMC&E can send the difference back to you by BACS (ie immediate bank transfer) on the due date. I had this when i set up a business in a different sphere and had up-front costs to reclaim.

The next issue to face is whether the people you will eventually work for don't mind paying VAT on your services. If you remain self employed, there's also the small issue of IR35, but let's not go there on a sunday evening.

Time limits are also not helpful.... depending where you are on the training.

[What Limits]

But IR35 is quite straightforward - you can not be self-employed and work for the same organisation all the time. You just need to show invoices to more than one company to get round it.

Uh oh, head above parapet again! :eek:

[Huwey]

;) As part of my route to becoming a QHI I did the business plan thing which with the VAT rules at the time meant being able to reclaim VAT on training including PPL and hour building plus AFI course.

The pre-trading claim period was six months then (1998) I had to be careful when I registered for VAT. It helped with "business" cash flow and reduced the amount required to be borrowed. However....the point is I had to convince HMC that I would be self-employed and that I would be in the position of repaying it in the future. I went in person with my plan....over the phone
exaplanations don't always do you justice particularly when saying I want to a ATPL.

If you subsequently found yourself working for a North Sea operator for example in a salaried position they would ask for the VAT and possibly interest on the reclamed VAT in full. They periodically checked with me to find out when I would commence trading and paying them VAT!

IR 35 has not (touch wood) affected the self employed instrutor/pilot community to my knowledge yet. We are simply sole traders. VAT is obviously now charged and added to my monthly invoice which in turn HMC get returned to them every quarter. Ideally you have an accountant to help make tax affairs run smoothly and you never ever fail to pay the VAT on time.

Hope some of this may help!

[ClearBlueWater]

Rotormad, as you can see from the above posts different people have different experiences with what should be a straight forward process.

I know some people who simply filled in a VAT form, became immediately registered and were given back the VAT charged on their costs in becoming a self employed instructor. Others (me!) had to complete business plans. On completion of a business plan I was asked to supply further evidence of intention to trade (?) including letters from potential future employers i.e. FTOs, guaranteeing that they would take me on as an instructor once qualified. Pray tell how one is supposed to arrange this?

After three years of occasional correspondence and several phone calls between me and HMC&E I was suddenly informed that I would be registered and that I could claim back to the date of my initial application three years previously.

It is legal, it's perfectly usual and all the comments in the previous posts are true too.

[rotormad]

So fairly straight forward then:confused: :confused: :confused: :confused: :confused:

[What Limits]

As with all Government departments tasked to screw money out of unsuspecting people (HMCE, IR, CAA etc) there are no quick and easy answers.

[md 600 driver]

i might also mention that if any moneys are paid into this buisness [for services rendered ] you will have to charge vat on them
but the best bit is they are income and as most of your funds are outgoings you will get these ammounts tax free up to the ammount you pay for training this can save you 25 to 40% plus ni contibutions

[Vfrpilotpb]

Rotormad,

I am self employed and run my own company, as a sole trader I am allowed to reclaim any input tax levied against me in the form of bills(invoices) and or services, I can also claim for the normal vat on every day things like fuel, stationary, transport, computers, programmes and a host of other expensive items that attract VAT, however the downside is that you are open to examination at the drop of a hat (so to speak) and if you are found to have reclaimed wrongly or worse still purposely you will suffer from a severe reprimand to your wallet, most HMCE employees have no world experience and are guided blindly by their rule book, they see Black and white only NEVER any shaded areas, so enter at your peril, however the upside is that you will be allowed to reclaim all training and hours building Vat plus books and exams and GFT's, that makes the training much easier on your pocket, and if you really are serious about becoming a CPL then if you have your own business its no problem, however if you work for only one company you may find the eyes of the Irs are upon you and you would be hard pressed to convince them you were really self employed, and to boot THEY HAVE NO HUMOUR in their pea sized brains at all. ;)

[ClearBlueWater]

Vfrpilotpb, can you clarify your comment re claiming back costs incurred on ... books and exams and GFT's... I don't think these attract VAT and are therefore outside the scope of any possible reclaim? If not I've just done myself out of a fair few quid!

[Go-Around]

What would happen if you got through the CPL and FIC claiming the VAT back and then were offered a full time job with one school or operator. Or didn't work for ages?

[rotormad]

Thanks all

I can see a problem area arising. I am, as you know, studing for my ATPL's but i am still working as a consultant once or twice a week for the SAME company and i know you cant do this...so i think i could be up s**t creek without a paddle....:(

Also, what if you can't earn as a pilot but have a source of income that is not linked with the aviation industry in anyway, where do you stand there...any ideas??

My heads spinning:yuk:

Rotormad

[Ludwig]

'scuse me butting in here but this all seems to god to be true. If one decided to get a PPL(H) as a first step nudge nudge wink wink, to being a professional helicopter flyer one could set up as a self employed helicopter instructor/driver register for VAT using a business plan that prioved in x years I will be hiring myself out for £££, claim back the VAT on all training costs a/c hire fuel WHY on th ehope of future income. When I get my PPL(H) Irealise that I am never going to cut it as a professional pilot, so can the idea, thank you very much C&E. Or I suppose I could keep struggling on hours building and never make the grade. Perhaps from a credibilty point of view it would be better to conspire to fail a class 1:cool:

Is that a fair summary, and if so why isn't every single PPL trainee doing it?

[ClearBlueWater]

Ludwig, VAT office may be pedantic but it's not stupid. They'll suss you out and recliam their tax with additional interest. Also, abuse of the system leads to it being changed to the detriment of legitimate claimants. This is what happened a few years ago when Gordon Brown decided that a system that allowed trainees to make tax claims against costs for flight training (and diving and sailing etc) would be abolished as folk were taking the piss. Cheers to those that took the tax credit but didn't actually intend to become professional pilots, it's meant that subsequently it costs an extra 20 grand to become a FI (H) as compared with costs 5 years ago.

Rotormad, you're right in that you would likely have to really go through the mill with HMC&E if you have employee status in respect of one job with the company for whom you wish to freelance in respect of another. That said you might still pull it off if you explain clearly the situation and the VAT officer is open minded to your explanation (not likely). Alternative sources of income should not conflict with a wholly separate business claim.

Go-around, the VAT office may wish to claim back a proportion of the VAT repaid if you end up becoming an employee of a company soon after being free lance. Same applies if you don't make any VAT returns after claiming VAT back i.e. don't work and therefore don't earn anything. There's no hard and fast rule for these situations, which do arise of course. It depends on the credibility of your circumstances and the zeal of the VAT officer concerned.

[Whirlybird]

FWIW, I work as a self-employed researcher/writer, mainly - but not exclusively - for one company. Since ALL your businesses, or none, have to be VAT registered, I registered this for VAT when I set up my helicopter pilot business, saying that the writing was my main business. In due course I got a "courtesy call" from my local VAT office. I explained the whole situation quite honestly, asking again if it was OK, and was told it was. I was then asked my turnover, which is way below the VAT threshold. She said: "So why have you registered for VAT; oh, I see, it's becuse you want to claim it back on your helicopter training". I said that was the case, and she seemed to think that was fine. She said I might have a visit "just to check you're coping with the paperwork" but so far the visit hasn't materialised. The company I mainly work for said it probably won't; they'll realise they're not likely to make much out of me right now, and won't bother coming out. I'm relying on being totally open and honest about what I'm doing...and keeping my fingers crossed.

[TheFlyingSquirrel]

Has anyone succesfully claimed a refund on the VAT element on flight training simply by writing to excise and outlining your situation? I understand it can be done without putting it through a company under certain circumtances - anyone?

[Spunk]

Well, FlyingSquirrel, I don't know about the tax system in England (?) but over here you don't have to pay for the VAT as long as it is considered to be training for a commercial licence.

For the PPL part this is only true if you are enrolled in a commercial course from "pedestrian" to "CPL". If you enrole for the PPL first and go for the CPL add-on, than you are screwed. VAT refund only for the CPL-part.

A friend of mine was actually able to set off his entire training costs (travel expenses, books, etc.) against tax liability.

A good tax adviser might be useful.

[Whirlybird]

FlyingSquirrel,

I and several others have done it, but you will need to put it through a company in the sense that you tell them you're a helicopter pilot, a sole trader. Any half-decent accountant will tell you what to do, though you might have problems getting them to believe that it's possible to claim VAT on training. There's also a VAT helpline; I can't remember the number, but again, an accountant should have it. Once it's set up you can easily do it all yourself, so you'll only have to pay an accountant's fee the once. :ok:

[bladewashout]

Did you carry on with the company and do your instructing through it? (e.g. you invoice your clients rather than getting PAYE?)?

Also, did you do it for the initial PPL stage, or only the CPL/ATPL?

I had considered doing the same thing but was advised that recovery for the initial training might be difficult to achieve, but recovery post-PPL is easier.

BW

[Whirlybird]

bladewashout,

I didn't find out about it till after I got my PPL and started hourbuilding. I do know people who did it for the PPL too; they tended to get asked to present a business plan and similar things, but it seemed to work.

Instrucing is usually on a self-employed basis, so I invoice the schools and include VAT; they don't care since they're VAT registered anyway.

[Camp Freddie]

Hi there,

I voluntary registered for VAT from the outset of my PPL training,
you are required to provide evidence that you intend to trade in your own right i.e self employed (not become a PAYE employee) once quailfied as a flight instructor/commercial pilot.

I provided a "business overview" rather than a full business plan which was about 3 or 4 pages long and provided a background to the industry, my place within it, how I would be charging VAT to my customers etc etc.

however my voluntary regsitration was however refused on the basis that I had not provided enough evidence of "intent to trade " by an inspector who when I phoned her to chat about the reasons was particularly abrupt and unhelpful.

at this point I hired professional help who after a delay and appeal to the controller of that VAT unit, succesfully got my registration accepted.

I therefore got all the VAT back on all the PPL, Hourbuilding and CPL training, Instructor course etc, however I was advised that there is a quid pro quo.

i.e. they expect you to charge VAT to your customers (e.g. the flight school) and pass back this VAT to the customs and excise. this makes no difference to the flight school as they claim it back.

but it could be an issue for you if you 1) get a salaried job with a flight school and therefore dont charge VAT or maybe 2) you piss of to the north sea or something and therefore again are not trading as they expected.

I believe anecdotally that if you have claimed all that money back which could be £10k or so these days, that you may not be off the hook with customs and excise until they have recieved at least the equivalent amount back from you which may take you a number of years depending on your work rate. and you may be liable for the shortfall if you never get there.

this is no problem for me as I have paid them back far more now than I reclaimed from them, but potentially this could be an issue for new starters.

so the bottom line is be careful out there and get professional help

regards

CF

[madman1145]

In Denmark it works this way ..

I myself is a modulary student, did my PPL(H) last summer, doing hourbuilding now along with ATPL(H) theory. After that, the CPL(H) will be completed ..
To get the VAT returned in Denmark as a modulary student, I just have to complete the CPL(H) after the PPL(H) and ATPL(H) theory or with no more than 1 year of break in between and as long as I have signed a contract with the respective FTO for completing a CPL(H) before starting on the PPL(H) ..
Then the Danish government consider it all as one education ..
Nothing else to it over here ..

Also the IR-rating is VAT free in Denmark, when the pilot has a CPL(H) ..

Kind of strange that things are so different from one EU country to another :suspect: ..

[Johe02]

I went to a 'tribunal' on this one. . turned out to be a test case. The final ruling was, I could claim VAT back 3 years previous to my first invoice.

The case made my accountants trade press and the ruling was viewed as a harsh decision considering my circumstances. . Sole trader with transport business, thus establishing a 'nexus'

Good luck. .

[helicopter-redeye]

My illustrious (UK) accountants take the view that claiming the VAT back on flight training (i.e. for the ATPL course) could be done through a VAT registered entity (company) would may then have a P11D implication in terms of benefit in kind.

Gordon gets ya either way ...

:{ :E :\ :uhoh: :hmm:

[Head Bolt]

It is possible to claim the VAT back on flight training, either as an individual or as a limited company, for all expenditure up to 6 years previous to the application.

The critical point is that you need to be able to prove that you INTEND to make sales that will be VAT rated once you are qualified - note that you do not have to prove that you definitely will, as none of us can do that, but that you INTEND to.

You therefore register for VAT as an 'intending trader', any accountant will do this for you for less than £100, it's a standard form.

The good news is that if you get VAT relief and then subsequently do not trade for VAT purposes, there is no mechanism for the VAT man to claim his money back - hence the need to prove the 'intent' to trade.

[TheFlyingSquirrel]

Thanks for the info guys - Can I claim back all the FW stuff i've done in the past 6 years too? Do you think they will have a problem with this?

[Whirlygig]

As a Chartered Accountant, I am not happy with some of the advice given on this page as it conflicts with my current knowledge and, until I have done further research, I wouldn't be prepared to comment.

However, the VAT registration is form is downloadable from the internet and is a relatively simply form to complete but you must have some plan as to expected turnover, costs and timescales. HM Customs and Excise are usually helpful these days and can give you much of the advice you require. Don't be afraid to ask them. Also, the decision as to whether you qualify can rest with an individual inspector so if you are unsuccessful, you can appeal.

HM Customs and Excise are a very powerful body (more so than the police!) and yes, they do have a mechanism for getting it back - they demand it back.

Cheers

Whirlygig

[TheFlyingSquirrel]

So dear Whirly - would you discount Head Bolt's info above or would you say it's all or partially Kosher? I have a lot of receipts here - can I claim the VAT on all elements of training, VAT on landing fees, fuel, books etc? I understand even parts of the distance learning course can be claimed for. We're talking a lot of dough here - Enough for another large chunk of training for me !

TFS

[Whirlygig]

The Flying Squirrel,

Please read your PMs.

Cheers

Whirlygig

[Head Bolt]

FS

There will always be conflicting advice and differences of opinion as to what can and can't be done with regards to VAT, and mostly the VAT people don't always know either.

I am not an accountant but have been in business over 20 years, and survived many a VAT audit. Whirlygig obviously knows VAT law better than me, but I hope the info I posted will help you.

I have checked with my auditor again, and I am advised that provided that you show the proper INTENT to make VATable sales, there is no ruling under which the VAT man can claim the VAT back if you subsequently do not do so.

Remember, whilst Whirlygig is quite right about the size and power of the C & E, they cannot make up rules as they go along, and a demand for payment does not mean it is due.

Get some good advice and go with what you think is right for you, there is a lot to be gained.

[helicopter-redeye]

FS, your not spending all that cash for fun right? I guess there has to be some intent there (watch the P11D thou')

h-r:8

[Whirlygig]

The P11D only applies to salaried employees.

One can set up a company and pay oneself through PAYE on a payroll system and then be subject to taxation on benefits in kind (form P11D - completed by your employer - er - you!).

However, one can be a "sole trader" or "proprietor" without a limited company (and all the hassles THAT involves).

In either case, if you put expenses through your business account which are for private purposes, they will not qualify for tax relief.

Therefore, if there is an element of your flying which is for pleasure (and why would it be - we all hate it!), both HMC&E and HMIT (Inspector of Taxes) MAY (only may) wish to disallow a proportion.

The P11D has nothing to do with VAT.

1 no. minefield opened up here!

Cheers

Whirlygig

[helicopter-redeye]

Maybe I used the wrong term. I MEANT to say 'watch out for the benefit in kind' which may be accrued if you are the director of the company you set up with the purpose (non exclusive) of getting VAT back on training, etc

Here is the (original) exhaustive reply



I have therefore, put my argument in writting and suggested that there is in fact no chargeable benefit in kind as you pay a suitable fee and that it would be equitable to grant a dispensation from completing forms P11D...... Also, we need to discuss the potential benefit if the Company pays for your flying training. I believe that you will be taxable, but the Company will be entitled to tax relief on employee costs.

There being no employee costs, there would have been no relief. However I note the use of the P11D word in my accountants reply.

He may be taking twaddle. If so I would be interested to hear ...

[bladewashout]

Probably obvious already, but a director of Ltd. co. has to fill out P11Ds even if unsalaried (unfortunately!).

What we have done is to buy a Robinson with a ltd. co and are leasing it back to a training school. I'm paying personally (and outside the company) for all my current PPL(H) training without using my own helicopter, but then I want to do a CPL and instructor rating using the purchased helicopter for training, probably renting just the instructors through the leaseback flying school.

Hopefully the company's income from leaseback could cover the training costs.

I will buy my personal use of the company's helicopter (i.e. any hours I am not being instructed) at the same rates as the leaseback company pays, which is cheaper than normal hourly rent rates but still 'market' rates in this context.

The question is whether in this context the VAT is recoverable to train a PPL(H) qualified director for CPL with a view to extending the company's income stream to include instruction or air-taxi. The secondary issue is whether the costs of in-house training for the purely commercial skills required to make that extension are a benefit in kind to the director (me!). Probably falls into some kind of training tax legislation.

My own view is that if I pay a decent slug to the company for private flying, I can argue that there is no benefit in kind (what use is a CPL other than within the context of an aviation related business?), and as the skills development is purely business related, the VAT should be recoverable.

It will always be grey, but as the company is trading and money is coming in and going out, it's a 'whiter' shade of grey than if the company was purely spending money on training that wasn't being earned.

Lastly (long post), because most of the cost of running an R22 pops up in depreciation, you can keep the company quite profitable for a year or so, and the losses come up as a big write off when you sell the helicopter. So it won't attract the same attention as a company set up which loses money from day 1!

BW

[helicopter-redeye]

My own view is that if I pay a decent slug to the company for private flying, I can argue that there is no benefit in kind

We are talking taxman and VATman here, thus (as the saying goes), assume nothing ....

Careful tax planning also reqd, once the money has been paid, if the m. Le Inspecteur subsequently admits overzealous collection, they keep the money anyway and apply the new ruling from the date of the new decision.

There is a tax man out there who failed to understand we hired out helicopters and so we paid too much tax (where do they GET these people....)

h-r

[bladewashout]

I think that the benefit-in-kind issue is covered by this piece of legislation.

http://www.legislation.hmso.gov.uk/acts/acts2003/30001--z.htm

The summary I take from it is that if the costs of training are solely the costs of providing work-related training, including the use of a company asset to provide that training, then there is no taxable benefit.

By paying for 'pleasure, or 'own use', and as long as you are strictly honest about how you do it, then this legislation can be interpreted as covering commercial training. It would be reasonable to interpret the legislation such that if you were to limit the recovery to only those flights where an instructor was present, or specifically directed as required by an instructor, or the costs of relevant exams and training courses, then it should not be considered as a benefit in kind!

BW

[TheFlyingSquirrel]

thanks to everyone who has responded.

I have it in writing from C&E. 6 months prior to registration for flight training and 3 years for goods in hand, ie computers etc, can be VAT reclaimed - but boy do they ask some questions ! So well worth making an application as soon as possible in a flying career.

[bladewashout]

Now I'm really interested... is there any chance of seeing a set of the letters too/from?

BW

[TheFlyingSquirrel]

Ring them up and ask for the VAT pack - no it's not a German CD version of Frankie and co, but a comprehensive set of booklets telling all. They are extremely helpful but watch what you tell them - it ALL gets recorded !

Vat helpline - 0845 010 9000

[g-mady]

Hi,

Just need some advice on VAT on CPL training - I have no experience in this at all!

Can I claim back vat on expenses towards obtaining my CPL?

I know some people create a buisness name - does this act like your are self employed therefore reclaiming vat for the buisness (obtaining the cpl eg flying training, S.F.H. and study materials)?

How do you go about this? Bank manager? Cumstoms?



Please help with any advice - This is a real grey area for me

G-MADY

[Whirlygig]

This is the most recent post on this topic (http://www.pprune.org/forums/showthread.php?s=&threadid=172125&perpage=20&highlight=VAT%20training&pagenumber=2)

However, please be aware that HM Customs & Excise have now amalgamated with HM Inspector of Taxes into HM Revenue & Customs. This means that they now talk to each other!

You'll find them here (http://www.hmrc.gov.uk)

There's a lot of spurious advice out there so best to speak to HM R&C yourself. If, for example, somebody managed to reclaim VAT from pre-PPL stage (and I am surprised they got it but then, I claimed for things that strictly, I shouldn't have been able to!), it doesn't mean to say YOU can. Rules and guidelines change and much can be down to an individual inspector.

Be totally straight and honest with them and you'll find them very helpful.

Cheers

Whirls

PS - I may be doing a disservice to bank managers but NEVER ask a bank manager for taxation advice! Go to a professional accountant and preferable one that is a member of a professional institute working in public practice.

[jemax]

Definately go and see an accountant, mine had experience of a couple of other people who had done similar.

I was totally transparent, he ended up negotiating with tax office to get the most advantageous solution for my particular situation, suffice to say it was well worth the money. You don't need to set up a company, you'll just need a business account.

[PushToShock]

Apologies if this has already been covered in another thread. I’ve searched the site but haven’t had any luck so far.

Probably a familiar story to most of you. I’m using the equity from a house sale to fund an ATPL(H) and then possibly a twin turbine rating and IR. My aim is to work offshore initially and then hopefully find my way to HEMS or Police work some time in the future.

I’ve been advised by many to consider setting myself up as a business in order to claim back the VAT on my training, but unfortunately have little idea of how to proceed.

The scary man at the VAT office has said that I must work freelance after training in order to claim, and that I must be able to prove that that is my aim.

Has anyone been through this particular minefield? Questions that spring to mind are…

Is this all a non-starter? Should I just crack on and accept this is going to cost a lot of money!

Is this an easy enough process or should I employ an accountant?

If I do claim VAT back and then don’t work freelance…what happens?

Plus many more……

I’d be grateful for any advice, experiences or referrals. Thanks in advance.


PTS :ok:

[helicopter-redeye]

I think the definitive post on this subject was by m'learned & gallent colleague "Kissmysquirrel" on either these very pages or that of rotorheads. Try searching for posts by him (or her?). Would have been about 12 months ago.

h-r;)

[TheFlyingSquirrel]

http://www.pprune.org/forums/showthread.php?t=172125

[g-mady]

PushToShock,

I started a thread on this a couple of months ago - Im in the same situation (PPL(H) 90hrs, and 3 weeks inATPL studies)

I think we came to the conclusion that you cannot reclaim vat unless you are going to charge it later for your buisness. Now be carefull, suppose you set up a buisness with the intent of acting as "self employed" when working for an offshore company but then after a year find another job and no longer charge vat - the tax man might not be happy!

The other consideration we found was that if you reclaim vat at training and therefore have to charge it for employement, it could hurt your chances - the company will just reclaim what you charge them but its just hassel... in a world where chances are slim enough anyway.

I have begun my ATPL training without reclaiming - but hope this could change?

MADY

[Whirlygig]

Is this all a non-starter? Should I just crack on and accept this is going to cost a lot of money!
No, it's not a non-starter and it is possible. HM Revenue & Customs are not THAT scary; they are usually very helpful.

Is this an easy enough process or should I employ an accountant?
Depends! Do you feel happy filling in your own self-assessment tax return? If so, then a VAT application form shouldn't be too much of a problem. You have to come up with a business plan. If you employ an accountant, just make sure they don't charge more than the VAT reclaimed! You should be able to find one who will give you the advice on initial set-up and then leave it to you. There are other implications as well such as self-employed status for income tax and whether you feel you ought to set up a Limited Company and invoice through that if your employment/self-employed status is in doubt.

If I do claim VAT back and then don’t work freelance…what happens?
You pay it back. Possibly with interest. If you go North-Sea, you need to find out how many freelancers there are there; I thought most were employees. Freelancers tend to be more instructors (from my understanding although I'm sure someone will correct me!)

G-Mady, it's no extra hassle for a VAT-registered operator to reclaim the VAT you have charged. No hassle at all. A certain "HERB" software that I often recommend, will do it automatically.

Cheers

Whirls

[ThomasTheTankEngine]

Hi Push To Shock

I done my training and set my self up self employed and VAT registered about 11 years ago.

As far as I know setting your self up self employed is much easier now than it was then. If you get in contact with the Inland Revenue they should be able to help you out, I went to a seminar at the Chamber Of Commerce and visited a few organisations which give advice on going self employed, this was free so I would not bother getting an accountant these organisations can tell you all you need to know.

You will have to say that you intend to make your living self employed.

When I originally registered self employed Customs & Excise told me that I would have to make my first sale before they would pay me the VAT which I had paid out for training back.

My first sale was working for the company which provided my helicopter training, I worked ground crew for them for the day, sent them an invoice, done my VAT return and got the VAT back from my training, no problem. At this point I had not even finished my training.

When you register as self employed you will be asked what type of activities you will be doing, don't just say pilot, don't forget ground crew services, helicopter sales etc. This will allow you to claim that VAT back before you finish your training.
.

[Sewing Machine Man]

Best speak to an accountant on this. Like Solicitors, many offer a free initial consultation. You will need to become self employed and register for VAT. Some of my business associates have claimed back the vat on PPL (H) training and left it to their accountants to sort it out, then justify it with the VAT people. Also talk to your local training and enterprise council and find out about a free bookkeeping and business advice course.
Whirlybird may be a good person to advise here as she was self employed before starting her PPL training. PM her.
Mike

[Sewing Machine Man]

I'm not a professional pilot, but I am a business man so.. Fact .. you can claim VAT and not charge for it... e.g If you were to manufacture childrens clothes, you would pay and claim back the vat on the fabrics and threads to make them. But would not charge vat on the finished products as there is no vat on childrens clothes. You would in fact be receiving a cheque from the vat office every three months.
These days there is no real hassle with modern accountancy software. The one I use produces a VAT return on screen. I just copy it into the paper vat return and send them a cheque for the difference between the vat I collect from customers and the vat I claim on goods and services.
Bottom line.. Talk to an accountant on the best move.
PushToShock,
I started a thread on this a couple of months ago - Im in the same situation (PPL(H) 90hrs, and 3 weeks inATPL studies)
I think we came to the conclusion that you cannot reclaim vat unless you are going to charge it later for your buisness. Now be carefull, suppose you set up a buisness with the intent of acting as "self employed" when working for an offshore company but then after a year find another job and no longer charge vat - the tax man might not be happy!
The other consideration we found was that if you reclaim vat at training and therefore have to charge it for employement, it could hurt your chances - the company will just reclaim what you charge them but its just hassel... in a world where chances are slim enough anyway.
I have begun my ATPL training without reclaiming - but hope this could change?
MADY

[PushToShock]

Thanks to all for the advice. Certainly given me a few good leads.

Cheers,
PTS :ok:

[Whirlygig]

Sewing Machine Man,

I am a little bothered by your reply as it seems to imply (or maybe I have inferred) that there is an option to charge VAT.

If your turnover/sales are over a certain amount (£60k), you must register for VAT. You can register for VAT voluntarily if your turnover is less than that and it is acceptable to do this if you can reclaim initial business set-up costs (i.e. training).

It is a little erroneous to talk about VAT on children's clothing since we are not talking about children's clothing here on rotorheads. Anyone setting up as a freelance pilot will be making VAT-able supplies. The supply is VAT-able whatever; it's just that under a certian limit, HMR&C don't mandate that you account for it.

Strictly speaking, there is VAT on children's clothes just as there is VAT on food and books. It's just that the rate of VAT is zero. This is different to items that are exempt or outside the scope of VAT. You have to make sure that you account for your zero-rated supplies differently to your exempt supplies. The reason for this is that it only requires the Chancellor's budget to raise the rate of VAT on these items; the exempt items would require an Act of Parliament to change.

I don't wish to obfuscate the issue but I don't want anyone to think that there is an option to charge VAT - there isn't in this context (unless you don't want to register and won't earn more than £60,000).

I would also add that you can only reclaim VAT on going back 6 months for services (which is what training is classified as) and 3 years for goods (i.e. your Pooley's CRP-5) from when you register. If you do a PPL and then decide you want to go CPL, then you won't get the VAT back on the PPL unless you register within 6 months and can prove that CPL was your intention all along. Whether you get that one past the VATman is down to the individual inspector.

Cheers

Whirls

[Sewing Machine Man]

Well thats cleared that up then.








I wonder what obfuscate means? I like that word.:)

Mike

[Whirlygig]

OK! Use "cloud" instead! ;)

Cheers

Whirls

[Robbo Jock]

From now on, whenever getting the Met, I shall now determine the obfuscation amount and base. :}

[Whirlygig]

Well, obfuscation is what you usually get from them anyway!! :ouch: :E ;)

Cheers

Whirls

[jemax]

And then of course there is offsetting costs of training against any PAYE you may have earnt in the same tax year.

This can bring a very pleasant surprise.

[Whirlygig]

I have been out of the business of self-employed taxation so I might be wrong but I thought professional aviation training was classified as NVQ5 as therefore, costs could not be offset against PAYE. I think it was the Tory Government who introduced that one!

Usually in order to offset expenses against PAYE, the expenses has to be incurred wholly, exclusively and (this is the killer) necessarily in the course of your employment.

If you're talking about PAYE from a previous/current career whilst training, then I can't see that being allowed. Your taxation has to be relevant to the training you are trying to offset.

When I paid for part of my accountancy exams, I could not offset that against my PAYE but that was 1990.

Cheers

Whirls

[jemax]

I'm just reporting what my accountants managed to achieve for me, this was however, after some protracted negotiation with the Inland Revenue.

Oh and I forgot to mention you should look into working family tax credits too, if your earnings are unlikly to be high as a result of high training costs/low income it can be a significant help.

[ShyTorque]

Hi Whirls,

You should start charging for all this advice and let 'em claim the VAT back. :E

[Whirlygig]

Under the rules of my august Institute, I am not allowed to charge for advice as I do not have a Practising Certificate. Not all Chartered Accountants are Chartered Accountants!

Bit like the difference between a CPL(H) and an ATPL(H)!

Cheers

Whirls

[ShyTorque]

Best I'd just kept me mouth shut again. :ouch:

[Whirlygig]

ShyT darling, there's no need to go off in huff - I've still got my work hat on!

Cheers

Whirls

[g-mady]

Under the rules of my august Institute,

Been in a place with padded walls Whirls??? Is this where words like obfuscate come from???

MADY

[mini]

May be nothing but... many EU states are now adopting the attitude/requirement that you don't qualify as self employed unless you are invoicing several "clients"...

[i4iq]

Mini

I think you're right. Otherwise it's seen as registering for VAT as Tax Avoidance I think. The Inland Revenue seem to be hot on that with computer consultants/contractors - where obfuscation is often used to hide code from those who would like to rip it off!

[Whirlygig]

The Inland Revenue used to use several "tests" to determine whether someone was self-employed and it has been discussed at length here:-

http://www.pprune.org/forums/showthread.php?t=193338

Customs and Exvise didn't seem to be so fussy but now they are one organisation, HM Revenue and Customs, they are trying to unify their rules so it may become an issue.

Quite often though, it depends on the individual Inspector and what you can sometimes get away with! Taxation legislation is not cut and dried and there are different interpretations to the rules - that's what has kept so many of my fellow ACAs in Porsches!

Cheers

Whirls

[puntosaurus]

I've just done this, and HMRC in the UK are really quite sensible about this situation IMHO.

Their tests of self-employment attempt to look through to the economic reality of the situation, and the reality of a first freelance job is that you'll tend be working for a single organisation until your business develops. If that's still all you've done after a year or so, well they might start to beef.

I got a letter from the flight school that was going to give me work and put that in with my VAT registration, and by the time my first return came round, I had a few invoices to put in (albeit not for much money !). Since I'd blitzed out the CPL and Instructor courses within the six months before registration I was able to claim back the VAT on all of that, plus the small VAT element on the books for the ATPL groundschool which was within the three years cutoff. Came to just over £3,000.

Very nice thank you !

[g-mady]

puntosaurus,

Just want to check (im in a similar situation) - You now work for a company, but have reclaimed vat whilst training (what you could).

When you say "until the buisness developes", do you mean: you become self employed eg by a company who "hire" you as an istructor/pilot.

I am currently 3weeks into ATPL studies but not claiming any VAT back, if I claim it now and get it does this mean that within a year of employment I need to have do some self employed work???

Please help here - Confusing, but I think im in your situation a few years back???

MADY

[puntosaurus]

Sorry, should have made that clear. I did the training in the expectation of teaching and flying freelance for anyone who will pay me, ie genuinely self employed. I registered for VAT on this basis, and was able to claim back VAT paid on CPL and FI training services in the previous six months and goods over the previous three years.

Things have gone roughly as planned and I am now self employed but, as I suspect is many people's experience, I have only worked for one company (as a freelance, not PAYE). The purpose of my post was to make the point (see mini above) that working for a single company (as a freelance) initially does not rule you out of self employed status, although HMRC would soon be on your tail if it went on for too long like that. They take the view that if it looks like a duck, and it goes on quacking like a duck, then it probably is a duck.

The bottom line is that you need to have the intention to be self employed (technically I think it's the intention to make VATable supplies) to claim the VAT back, and if that doesn't happen (as others have posted), or if HMRC think you are taking the piss you will be liable to pay back what you have reclaimed. Now obviously there's a bit of a grey area in your intentions, and sometimes the dream PAYE job turns up the day after you qualify.

However, I would have though that anyone who does an FI course is almost by definition planning to work freelance, because I don't know anyone who will employ an FI(R) on a PAYE basis. PMs with attached contracts please from all those employers around London who want to prove me wrong !

Hope that clarifies matters. This all happened last year BTW.

[Whirlybird]

As I've said before on here, I was self-employed as a freelance writer before I started my CPL training. I was well below the VAT threshold, but registered for VAT (I had to register my writing business and my future helicopter pilot business) to claim back VAT on training. When the VAT helpline phoned me, I was totally honest, told them what I had done and why, and asked if it was legal. I was told it was, and given advice as to how much I could backdate and so on. The VAT people aren't ogres; if you want to know if you can do anything, phone and ask them! And the forms are easy-peasy to fill in; you might need an accountant at the start, but after that it's just a quarterly mini-form, and you get your hard-earned dosh back - can't be bad.

[mongoose237]

A quick VAT question

The discussion about VAT invariably pops up with prospective commercial pilots. I am able to outline the basics about voluntary registration as a sole trader, back dating registration if necessary, time limits on claiming back goods/services already paid for etc (and of course recommending they employ the services of a good accountant or at the very least the VAT helpline).

However, the one point I can't offer any general advice on is if you wish to remain employed. Can anyone - in very vague and general terms - explain:

1. If it is possible to register as a sole trader and still be employed; and
2. If it is not possible as a sole trader, is there another route that can be used to reclaim the VAT?

I appreciate that it is a very complicated subject so I'm just after the basics

Many thanks in advance

[Whirlygig]

1. It is possible to be both self-employed and employed but HMR&C will want to make sure that any "joint" costs are fairly proportioned between the two businesses.

2. Highly, highly unlikely. In fact, I would say "no" but I have heard of people who claim they have done it. I am sceptical. All I can say is that they were dealing with an Inspector who didn't know the rules and that is also unlikely.

The point with VAT is that it is a tax on the end user. If your customer is someone who can reclaim and pass on the VAT to an end user, then you can easily obtain VAT registration.

However, the self-employed route also has some income tax advantages especially when it comes to claim tax on job-related expenses and so HMR&C are quite strict on whom they regard as self-employed and whom they do not. Some cases will go to the Commissioners. However, I do understand that they "turn a blind eye" to flying instructors as it is appreciated that that is how the industry works.

Cheers

Whirls

[mongoose237]

Thank you Whirls.

So it is possible, for example, for someone to continue their day job and be a freelance pilot on the weekends, and be registered as a sole trader purely for the purposes of their flying? My confusion arose because I thought that by registering as a sole trader whatever services you provide you have to charge VAT on them.

Or the more common scenario of maintaining current employment whilst training, but still wanting to reclaim the VAT on the flying which will stretch beyond the 6 months (I understand there is a little bit of discretion here)

[Whirlygig]

No, that scenario is perfectly possible as long as expenses for job and self-employment are kept separate.

For example, my day job is as an accountant. I could, and do, remain as an accountant whilst training for CPL. I am an employee as an accountant but can register as self-employed "future" heli instructor. All my heli instruction work would be liable to VAT to my customers whereas I could still continue to be a part-time employed accountant.

Cheers

Whirls

[mongoose237]

OK, so provided you only claim back VAT on expenses incurred in the provision of services for which you charge VAT on, Her Majesty is happy.

This is now curiosity, seeing as I'm talking to a professional ;)
Take for example a salaried offshore pilot, who in his copious time off fancies doing some onshore flying. Would they be able to be registered as a sole trader, or are the employed services/self employed services so close that they are considered indistinguishable?

I'm guessing theres no definite answer to that, depending on the mood of the inspector!

[thecontroller]

thanks. its a pain that the search function STILL doesnt work on merged threads

[Hobbit]

As a plank driver wanting to fly rotary again, I only yesterday spoke to my accountant re this very topic. Can I set myself up as a sole trader and claim the fees for my rotary instructor course against tax. Yes, without a doubt, was the reply.

[Heliblob]

Hi,
I'm just starting to hour build toward CPL & Instructor, thus spending alot of money!
I have heard of people claiming back VAT against flying training. I have spoken to a couple of accountants about this, and they are a little baffled and say it can't be done.:ugh:
I thought I saw a thread about VAT on here a while ago, but can not find it now. Can anyone out there please advise on this matter, or even better recommend an accountant that knows how to sort this out?

Many thanks
:)

[The Hustler]

Here's the thread :-
http://www.pprune.org/forums/showthread.php?t=198314

I know my accountant went on about the fact that a licence couldn't be shown as a benefit for employment or generating income - even though I explained the whole CPL/ATPL remuneration thing . . . think I need to change my accountant.

[Capt Hollywood]

I successfully claimed my CPL here in Australia. You are able, as far as I understand, to claim payment made for any training in your relevant field as a deduction from your taxable income. Prior to my CPL training I was a tour guide/bus driver. After gaining my CPL I went to work for a company that did tourist flights and there you have it, I had paid for training in my relevant field! My accountant assured me it was all above board but I did bump into him several years later and he said he probably wouldn't do it again! :rolleyes: I have related this story to many pilots over the years and am yet to meet another who successfully made a claim on his/her tax return. I trained in 1997.

:ok:

CH :cool:

[Helinut]

The rules re: VAT & tax may well vary from country to country. More than that, they might vary, in practice, depending upon which individual tax man was dealing with them.

[2bart]

I registered to voluntary registered for VAT and claimed back my training expenses. a while ago know, I had t supply a letter from an employer to show
I had employment

[Russell Sprout]

Unless you know what your doing dont bother, I spoke to the VAT people and explained what i wanted to do and they were happy with that and sent me the forms which i filled in and returned. However, the forms are far from Black and white. I spent months being chased for the tax i intended to claim back with many letters informing me of the fines i would have to pay for not coughing up. Took me ages to explain it all and cancel what i'd started.

[Whirlygig]

I registered to voluntary registered for VAT and claimed back my training expenses. a while ago know, I had t supply a letter from an employer to show
I had employment
Not sure why you were asked to do that because the whole point of being registered for VAT is that you are self-employed and in business for yourself, not employed.

Cheers

Whirls

[muffin]

This was recently discussed here at length. Its about planks but the same rules apply.
http://www.pprune.org/forums/showthread.php?t=237958

[rotorvision98]

HI a coleague of mine registered for V.A.T. during his hour building and claimed back all of the V.A.T. on this. I must admit I didnt realise you could do it but he has and has had no further problems from the revenue. He told me they sent somebody out to interview him and that was it. Happy hour building

[Whirlygig]

Just to make everyone aware - there were some other background issues with the thread link posted by muffin. This case has some unique "features" which I cannot divulge but please can everyone be aware that all cases are different and there is no substitute for some professional advice.

Cheers

Whirls

[gulliBell]

I have related this story to many pilots over the years and am yet to meet another who successfully made a claim on his/her tax return. I trained in 1997.
:ok:
CH :cool:
Pleased to meet you CH, I'm GB. You got your deduction allowed because I took the ATO to the Administrative Appeals Tribunal in 1989 for doing the same thing, and I won. The ATO reckoned I couldn't claim my flying training costs and I reckoned I could. They slugged me for the tax avoided, plus interest, plus penalty, and I had to pay whilst the appeal process was determined. There was a lot at stake because they tried to do me for 1990 as well, it involved alot of money. However we agreed beforehand that, as the elements of the two cases were the same, I would only run with the first year, and whatever the result of this case would be applied to the other.

The paperwork for the hearing was thicker than the flight manuals for the S76, B212 and B412 that I now fly, combined. To cut a long story short, I won, and they didn't take it further, so I got my money back plus interest within 2 weeks. They sure got a surprise when a young-buck wannabe helicopter pilot (as I was then) beat the might of the ATO. Best of all, they have never audited me in the years since.

So if we ever cross paths in the Qantas business lounge, I reckon you might shout me an ice cold Crown Lager or two. Any helicopter pilot can afford the prices in there, whatever predicament they might be facing with the ATO for filing a shonky tax return.

[OldRookie]

I looked into this not to long ago. Here in the U.K. the tax law is quite clear, You can not claim back any training expenses that qualify you to progress. You can claim for training expenses that allow you to continue, for example changes in the law or safety regulations that require additional qualifications to be gained in order to continue in current position. So if your starting at the bottom the first thing you will be able to claim is your medical renewal.

I think you should get a t-shirt when you leave full time education in the U.K. with the words "Qualified to be Shafted" printed on it................... Oh would the last one who leaves please turn the light off. :ugh:

After a full tax investigation going back 6 years, maybe I am just a little bitter !!

[Whirlygig]

Income tax and VAT are separate taxes with separate rules. It IS possible to reclaim VAT on training on the basis that you are going to become freelance/self-employed however, claiming back the tax relief on training is a different matter.

The vehicle by which you do this needs to be carefully considered but. Setting up a limited company may not (note MAY not) be the best way.

Cheers

Whirls

[Capt Hollywood]

G'day GB,

Consider it my shout! Although I'm usually not permitted in the Qantas lounge as my better half works for Qantas and you can't go in there when you're on staff travel! But then who's complaining at 90% off the airfare!

CH :cool:

[Heliport]

Threads Merged.

[puntosaurus]

.... and therefore invisible to the next person who does a search on VAT and Training. Can't we do something about that ? If not, would it not be better to leave the threads separate ?

[Heliport]

and therefore invisible to the next person who does a search on VAT and Training
Sorry, I'm probably being slow (long day), but I don't understand what you mean. The search feature won't find anything shorter than 4-letter words so it won't find 'VAT' or 'V.A.T.'
There were VAT reclaim questions and answers dotted around the forum before the merging. So, to make it easier to find all the information, I merged it in one place - here.
Those who use 'reclaim' as a keyword will find it more quickly than those who use 'training', for obvious reasons. Using the 'search titles' option often saves time.
If people don't find it (or haven't looked) they're given the link

(It's also one of the topics listed in Training FAQ.)

I merge threads relating to the same subject so that we build up a database of information for easier reference. eg Numerous threads discussing the same helicopter type are now merged.
It's taken many many hours merging the threads on each type, and is an ongoing process, but we now have quite a few in our database.

Examples (not the full list):
Agusta 109 (http://www.pprune.org/forums/showthread.php?s=&threadid=142459)
AB/AW139 (http://www.pprune.org/forums/showthread.php?t=204240)
AS350 (http://www.pprune.org/forums/showthread.php?t=229370)
AS355 (http://www.pprune.org/forums/showthread.php?t=229371)
AS365 (http://www.pprune.org/forums/showthread.php?t=100371)
Bell 206 (http://www.pprune.org/forums/showthread.php?s=&threadid=196414)
Bell 407 (http://www.pprune.org/forums/showthread.php?t=182751)
Bell 412 (http://www.pprune.org/forums/showthread.php?t=173574)
Bell UH-1 Huey (http://www.pprune.org/forums/showthread.php?t=184078)
Boeing AH-64 Apache (http://www.pprune.org/forums/showthread.php?t=71298)
Boeing CH-47 Chinook (http://www.pprune.org/forums/showthread.php?t=163538)
EC120 (http://www.pprune.org/forums/showthread.php?t=150069)
EC135 (http://www.pprune.org/forums/showthread.php?t=189945)
EC145 (http://www.pprune.org/forums/showthread.php?t=191377)
EC155 (http://www.pprune.org/forums/showthread.php?t=54476)
EH101 Merlin (http://www.pprune.org/forums/showthread.php?t=135616)
Gazelle (http://www.pprune.org/forums/showthread.php?s=&threadid=160829)
Hughes/Schweizer 300 (http://www.pprune.org/forums/showthread.php?t=105788)
Hughes 500 (http://www.pprune.org/forums/showthread.php?t=150449)
MD Explorer (http://www.pprune.org/forums/showthread.php?t=197460)
R22 (http://www.pprune.org/forums/showthread.php?s=&threadid=162839)
R44 (http://www.pprune.org/forums/showthread.php?s=&threadid=189931)
Sikorsky S-76 (http://www.pprune.org/forums/showthread.php?t=190924)
Sikorksy S-92 (http://www.pprune.org/forums/showthread.php?t=163206)
V-22 Osprey (http://www.pprune.org/forums/showthread.php?t=204936)


Heliport

[puntosaurus]

Apologies to you Heliport.

There used to be a problem searching merged threads - see here (http://www.pprune.org/forums/showthread.php?t=125404&referrerid=110355) but when I tested it with a search for VAT I fell foul of the four character problem and assumed the problem was still there.

The search on merged threads does seem to work now. Belay that last post !

PS That's an excellent list of types covered. Maybe you could add it to the sticky thread ?

[starshiptrooper]

Dear Rotorheads,

Nothing has come through searching threads so appreciate being pointed in the right direction or some help hints or PM's if required.

I'm doing my AS355 type rating/IR soon an wonder if there is anyway of offsetting the tax/vat on the course.

Thoughts at the moment are setting up my own limited company. That way when (or if !!) I get employment, whoever employs me will effectively employ my company.
This allows me to offset my training costs against future tax.....has anyone delt with this before ? , and would companies in the industry be willing to do this ?

2nd option is finding a heli company (not necessarily saying they will give me a job )to finance the course having already recieved a 20k cash bond from myself. As I go through training the company pays for the training through its accounts and then draws off the cash bond I supplied. At the end of the training the heli company can claim back the VAT (around the £3500) mark, take a £500 admin fee and pays me back the remaining balance of my cash bond + the VAT. This deals with VAT. My current belief is that this is not illegal at all.

If then the heli company decideds to employ me then my tax on my earnings can be offset by training cost (less the VAT now).

Hope that lot didnt sound too confusing !!!

It seems to be to a win win situation for a heli company. If they do not decided to employ me they still take a £500 fee for effectively a paperwork exercise.

Any thoughts please ?

[helicopter-redeye]

I predict a burst of comments about this having been covered before (If you search by member (Whirlygig) then it will appear as having been on the front page within the month). Say about P3 of the search screen?


h-r;)


PS which FTO are you going to?

[Camp Freddie]

Mr Trooper,

as mentioned its all been done before here, I even shoved in my own 2p worth

http://www.pprune.org/forums/showthread.php?t=198314

Regards

CF

[Whirlygig]

The subject has also been covered in the Instructors' Forum and Professional Training. In a nutshell, go and get professional advice from a qualified Accountant in practice. As everyone's circumstances are different, it would be difficult what is the best option for you. All that people can say is what worked for them.

However, Starshiptrooper, I can confirm that your 2nd option is, indeed, a big no-no!

Cheers

Whirls


PS - thanks h-r for the vote of confidence.

[helicopter-redeye]

It was more a question of remembering who had contributed the most to that debate. When I came to look for it myself, boy do you post a lot!

PS happy bithday for a few weeks ago, your Prun age-indicator flag went a bit redder

h-r;)

[starshiptrooper]

Thankyou very much for all your help

Wish me luck !!

[starshiptrooper]

Just been reading through the threads

:ugh: Crikey, my heads on fire....pass me a bucket !

Anyone know of a good accountant...please pm !!

[md 600 driver]

senario

you get your self a part time or full time job with a friendly company
while you are employed by this company you do some training you also ask the company to reimburse you for any training done by you
you also say to the company that you will pay back the company 80% if you leave within a period of time and you will give them 80% up front as a guarantee
steve

like option 2 whats wrong with that
i am not a commercial pilot only a humble ppl but i do run/own a multi millon £ turnover company

[Whirlygig]

Nothing's wrong with it as long as the amounts include VAT.

Cheers

Whirls

[helicopter-redeye]

you get your self a part time or full time job with a friendly company
while you are employed by this company you do some training you also ask the company to reimburse you for any training done by you
you also say to the company that you will pay back the company 80% if you leave within a period of time and you will give them 80% up front as a guarantee


I think that is more or less the concept of the performance bond, but removing the word 'friendly' for the avoidance of doubt.

But to get to that point you may need the IR, which leads us back to the starting point.

But its Friday so happy weekend all.

h-r;)

[heights good]

Very quick question but anticipating a very (un)quick answer :)

Can I claim back or offset tax/VAT on flying training seeing as I'm using it to obtain professional qualifications?

Thanks in advance

Heights good

[smith]

Been done many times before mate, do a search.

[heights good]

I would if it didn't keep saying "try again in 15 seconds" Why on earth is there a time limit on searching?????

[helicopter-redeye]

If you go to another more enlightened JAR country, you do not pay VAT on professional training.

h-r;)




1000 posts!

[XTEC]

I have a PPLH. Thinking ahead to CPLH and Instructor Rating costs, can I register now for VAT with a view to becoming a self-employed freelance pilot after qualifying?

Any input much appreciated.

XTEC

[VfrpilotPB/2]

Think long and hard before joining the Vat regime, these people are absolute Ars**les and will cause you long sleepless nights, and if they thought for one moment that you were having fun,... then they will stuff you ,... Got the T shirt and still having the scars worked on!!:ouch:

VfrpilotPb/2

[Whirlygig]

Yes you can but do your research first and get a good, professionally qualified accountant to help you through the process; by that, I mean a Chartered or Certified Accountant, not a retied bank manager who sets himself up for taxation services!!!

The VAT rules are more "forgiving" than the Income Tax rules; the latter have become so stringent, it is very difficult to justify self-employment especially if you just work for one operator or school.

Cheers

Whirls

[manfromuncle]

Discussed before:

http://www.pprune.org/forums/showthread.php?t=198314

Threads merged

SP

[choppertop]

Here's one that hasn't been covered...

I am a shopkeeper, owner of a limited company, and I sell menswear. I am now claiming back the VAT on my CPL training because, in due course, my admittedly rather diverse business will be supplying my piloting services as well purveying gent's underpants. My accountant assures me that, provided I am genuinely going into commercial aviation, this is a runner. Anyone here disagree? [I'm hoping for a reassuring complete silence.]

Got a nice new summer stock here in Midhurst, if you're passing...

[HeliCraig]

Choppertop... much the same situation. Have an existing (diverse) business and put my PPL(H) VAT through on the grounds that eventually it will progress to another source of income.

Received much the same advice as yourself from my accountant.

Got a notice informing me of a routine VAT inspection; at which point I expected to be told I would have to repay it all.

The chap accepted it at face value, although said they would come back out in 3 years to see how I am getting on. Apparently they accept that element of the VAT returns on an "intending trader" basis.

By all accounts though, not all inspectors are as accommodating!

[heliporto]

Hi there

Would anyone know if it is legal for an European citizen (non British) to request a VAT claim in order to try to get back the VAT payed during CPL(H) training done in the UK. If so, would anyone know an UK accountant that has already gone through this ?

Any help really apreciated
Thanks a lot

[Whirlygig]

Are you self-employed as a commercial helicopter pilot in the UK? If yes, then you can reclaim the VAT. If not, then no.

Cheers

Whirls

[Heligirl46]

Hi everyone,

I was just wondering if anyone could give me any information about how to reclaim the VAT paid on an IR course I am sitting in the UK at the moment. I am from Ireland, and some people have told me I am entitled to claim the VAT back as I am not a UK resident? I'd really appreciate any information anyone might have on this as I've gone against nothing but grey areas and brick walls so far!!! :ugh:

Thanks

[HillerBee]

skippy212

NOT FUNNY:mad:

Heligirl

That would only be possible if you have a VAT number in Ireland, but I think it only applies to goods and not services supplied in the UK.

[Whirlygig]

Heligirl46, please see my post two above yours.

Cheers

Whirls

[norunway]

You most definetly can reclaim Vat on goods and services from the uk customs office out of northern Ireland if you are an Irish citizen I know because I have done it.
You start by going to an accountant and setting up as a sole trader and get them to reclaim the vat for you,the whole process takes between 8/12 months and will cost you about 500 euro's but you will receive about £6'000 stg back so is well worth the process. Forget what any body else says as they clearly havn't been through the process,if you have any questions pm me.

[staywet]

From my point of view, vat is reclaimable and previous advise is to make your self employed business description as wide as possible and if possible make vatable sales immediately. OK, we know you cant sell your flying services until you pass the cpl, but you can sell ancillary products. T shirts, caps, . In my case, I own a jewellery business and my son intends to commence his PPLh with a genuine view for it to become his livelihood as soon as hours etc permit. I consider that as ne commences as a self employed pilot, he will also rent from my shop, a display cabinet and window space. He will purchase aviation themed jewellery and these will be sold through the shop, vat will be added to the price and paid to the vat man on his quarterly returns. He will also create a web site and use ebay to sell his products whilst he trains. Therefore he will reclaim substantial amounts of vat from his training costs, but also pay smaller amounts of vat for his income. He will not get cpl flying income for about a year, although it would be good to try to qualify inside the first year, to enable a couple flying invoices to be included and maybe thereafter a couple a month.

So, Air Law Question 1. Relates to what constitutes commercial work prior to passing cpl. I know the pilot cannot sell his flying services until cpl qualified, but can take passengers once ppl qualified. Is it therefore allowed for the non fee paying passenger (family, friend etc) to take photos etc whilst the pilot does the hour building.

If so, if the photos are of familiy and friends homes, can these be sold either by the pilot or by the passenger to the family member who owns the home? Each photo may be worth £20 in a nice frame, but could they be sold for say £350 and to include a free hours air experience flight, to be flown once the cpl is obtained?

It occurs to me that this could be tantamount to cpl work and therefore not allowed,but it could be argued otherwise and therefore allows family members to 'sponsor' the costs of training. I would think 20 or 30 such photos could be sold (probably to family members who would otherwise donate or sponsor,give a Christmas present, just to support the family member) but the income would cover a huge chunk of the commercial licence fee and show the VAT man that you are trading.

Also, would you charge vat on £20 or £350 ? (remember to pay the vat back to the vat man).

[Whirlygig]

Why don't these family members just give your son £350 as a gift. No VAT, no dodgy commercial flying schemes (yes, it's dodgy and the VAT would be on the £350).

Cheers

Whirls

[Sliding Doors]

Staywet,

Rather than make assumptions try taking a look at this :ok:

http://redirectingat.com/?id=42X487496&xs=1&url=http%3A%2F%2Fwww.caa.co.uk%2Fdocs%2F1428%2FSummaryOfCATP TAWANO2009May2010.pdf&sref=http%3A%2F%2Fwww.pprune.org%2Frotorheads%2F418486-heli-charter-open-day.html

Depending on how you intend to charge/invoice for these photographs you COULD have the photographer viewed as a crew member rather than a passenger, thus making the flight a commercial trip (for which your son will need more than simply the licence).

The bigger flaw is your assumption that as a basic CPL there will be work/any work options outside of family and friends. Plenty of threads exist, but you'll have to budget for an IR or FI rating too for your son to stand any chance of flying regularly for a 'living'

[staywet]

A £350 gift is too obvious and the thread tries to examine the vat element, which a gift would not deal with. So I have introduced a vatable product, eg a photo.

We can develop the idea examining whether a £350 gift given now, in return for an hour once qualified next year, constitutes commercial work before qualification, and therefore wrong?

If a gift is given, does that attract vat? No !

If a gift is given with the promise of a "free flight once I am ppl", does that constitute a gift or remuneration?

If the £350 constitues a gift, its not cpl? If it constitutes remuneration it is cpl and should attract vat. It is therefore a commercial transaction entered into by a ppl? Is that allowed?

I know we cant charge for flying unless cpl, but can a ppl sell flights prior to obtaining the cpl as long as the flight is not conducted until after cpl?

[Pandalet]

Not directly relevant to the VAT question, but it's worth noting that for public transport (i.e. carrying paying passengers), you need more than just a CPL. You need to be employed by an AOC-holding company, with all the paperwork and procedures (and pounds of flesh to the CAA) that implies; your aircraft needs to be approved and on the correct maintenance schedule; your insurance needs to be correct; etc.

As Whirls points out, the easiest is to have family member who are so inclined to simply donate funds to your son's training, with no reward or exchange expected or implied. If he chooses to take some family members flying later on, that's entirely up to him.

I belive there were some issues with reclaiming VAT on a PPL, as it's not a professional qualification, and doesn't affect your ability to earn (and thus pay VAT on) money. Everything after the PPL is supposed to be VAT-reclaimable (in the right circumstances). However, I'm not an accountant, so I can't put any veracity or back-up to this.

[Sliding Doors]

Staywet,

I get the feeling that you're only really concerned about the VAT element. You need to consider both the VAT and the flying. It's quite clear you've some experience of VAT, and one would therefore presume you have access to an accountant? Best advice is to run your ideas concerning VAT past that accountant. As for the flying, please have a look at the link I suggested - it is the CAA guidelines on what constitutes commercial (aka Public Transport) flying.

A £350 gift is too obvious No disagreement there

So I have introduced a vatable product, eg a photo. You have but you've completely ignored who will be paying for the flying. The photo itself is only £350 because of the flying. In your scheme who pays for the flying and what are the implications of getting your friends to pay an inflated photo price in order to cover the flying costs? (particualrly if they come along and take the photograph themselves) Do you know that link might help you?

whether a £350 gift given now, in return for an hour once qualified next year, constitutes commercial work You could look at that link again? If your friend is going to give a 'gift' on the promise of an hours flying, then your friend becomes a fare paying passenger. A PPL cannot carry fare paying passengers, and as you have already been told, merely holding a CPL won't change that legality situation. Would the friend still get the promised hour if they didn't donate so generously?

If a gift is given, does that attract vat? No ! Guess I was right, your primary concern is VAT. I'd start with a better question, 'As a PPL or a CPL what can my son do (flying wise) safely and legally?' There must be a link somewhere that'd help you start to answer that? (sensing a pattern here?)

If a gift is given with the promise of a "free flight once I am ppl", does that constitute a gift or remuneration? Would the person still be given the free flight had they not 'donated'? You answer your own question! Lets cut to the chase, you're asking if family and friends can pay your son to take them flying? In simple terms the answer is no. The link will tell you all about cost sharing trips. Your son could conduct those :ok:

If the £350 constitues a gift, its not cpl? If it constitutes remuneration it is cpl and should attract vat. It is therefore a commercial transaction entered into by a ppl? Is that allowed? What are the friends paying £350 pounds for? Answer that and you'll answer the first bit. The second answer is hidden within the licence titles - Private v Commercial. Any clearer?

I know we cant charge for flying unless cpl, but can a ppl sell flights prior to obtaining the cpl as long as the flight is not conducted until after cpl? As you know that bit, you have answered your own question. In addition you'll need more than simply the licence to conduct commercial flights. Do you know I have a feeling that a link that I might have mentioned before would help you understand the legal implications of a PPL advertising his services, even for cost sharing trips.

Dont get me wrong, I can see what you are trying to do. The bottom line though, is that there is no easy or cheap way for your son to qualify and get a flying job. It is expensive and there is no way of avoiding most of the cost. There are some legal ways that costs can be slightly lessened - cost sharing and asking to reclaim the VAT. Bear in mind the VAT angle has been abused by many over the years, and HMR+C will look at anything you suggest very closely. Zero to CPL will cost about £50K. The licence alone won't see your son working. You/he will also have to budget for an FI (instructor) rating (about an additional £25K) or an IR (instrument rating - about another £45K) for your son to stand ANY chance of finding some work.

You also have to remember that the CAA tend to take a dim view on rules being broken, and that as a PPL your son will have to sign a self fly hire agreement at the school he rents the aircraft from. This agreement will most likely specify quite clearly what your son can and cannot do whilst flying. The school too will take a dim view on your son conducting work illegally, that they pay the CAA a hefty fee to be allowed to conduct legally.

[staywet]

Now thats a great answer.

The thing is pretty well black and white. Whilst you can reclaim vat on most training costs. It means you also must pay to the revenue all vat from any income. The above answer confirms that you cannot make any income from the flying element of your training until well advanced and licenced. If you try to find small areas of 'dodgy' flying income.....like selling photos etc....you must still declare the income for tax and vat. Putting your head way over the parapet and escalating any offence.

What manner of pilot do you want to be? In seeking pefection, or at least flying with exactness and skill and artistry, then we must be prepared to balance these flying characteristics with proper and professional attitudes whilst on the ground.

As a self employed pilot, there will be plenty of other areas of income that you can develop on the ground, to show the revenue that you are in business and not just flying for fun. I still recommend that you develop these income ideas into a revenue stream. Your business will then collect vatable income to offset the refunds that the Revenue will have to make.

You might find that the profits from these ground based activities will support your training costs.

I suppose I am saying, develop a complete self employed flying business with multiple income streams , dont just fly and pretend you are a self employed pilot, whilst working only at your normal day job.

As has been pointed out, the substantial flying income might be 5 or 10 years down the road. The Revenue should know this and accept they will be refunding the vat on your training costs for many years.

The above points I have made relate largely to air law which dont really belong in a vat thread and to some degree played Devils Advocate.

[nigelh]

He can still fly these family friends and get paid ( after his cpl ) without using an AOC if they lease the helicopter .....

[md 600 driver]

what then if

you work for a vat registered company as a gofor the company pays your training costs and reclaims vat [afaik up to now vat legal ]

you pay your company back with some additional hours unpaid or lower paid

[HillerBee]

If you take an the integrated CPL route all VAT is claimable, the only problem is to find an integrated course.

Building flying hours by selling pictures (and flight hours, albeit hidden) to family and friends would need an extensive family. Seems hard to get to a 1000 hours that way.

[500e]

Our accountant said forget it the revenue will query everything & it could trigger an in depth look at the accs.
Been there cost a lot & there was not a problem at the end!! but still cost a fortune in accountants fees, (still they were tax deductible though):(
Listen to Whirls

[Gulfstreamaviator]

The word is INTENT, and any one can set up a limited company, and VAT registered in UK, and provided they trade with the intention of making a profit, then they are clear.

I had a run in many years ago with IR in regard to Benefit in Kind. They decided that I as a director of a (profitable) ltd company was using the business flying that we conducted in the "company" owned and operated aircraft, was a BIK to me, as I was the pilot, and thus getting flying for free, which otherwise would have been out of taxed income.
We were able to point out that by my piloting rather than hiring an outside person we as a company saved money, and also the aircraft was able to be a capitalist tool and assist in our exports we were actauly good boys. They went away.

I was not looking forward to my next IR renewal invoice being audited.

Glf

ps the Gas Man has almost as much power of entry as the VAT Man, I also suspect the RSPCA is as powerful!!!!!

[Sliding Doors]

GLF,

Your final comment got me wondering. FWIW 30 seconds and google found this

Visits by VAT inspectors | VATark (http://vatark.co.uk/vat/howto/visits-by-vat-inspectors/)

I am concerned though that anyone following the advice that a VAT inspector has no right of entry to premises to inspect records, so can be legitimately refused entry may find themselves on the wrong end of a charge of obstructing an officer of Revenue & Customs. An officer of Revenue & Customs has the power to demand the production of documents at the principal place of business and at “such time as the authorised person may reasonably require.” Now you could argue that this power doesn’t allow an inspector to demand entry.

Let’s deal with that issue. In Paragraph 10 of Schedule 11 of the VAT Act 1994 the officer of Revenue & Customs has “… for the purposes of exercising any powers under this Act … may at any reasonable time enter premises used in connection with the carrying on of a business.”

It’s quite clear that an officer of Revenue & Customs has the power to enter any business premises and inspect records at any reasonable time


Seems they do have more powers than the RSPCA or the Gas Man :eek:

[Whirlygig]

They do indeed ... and more powers than the police who would need a warrant to inspect same documents.

Cheers

Whirls

[staywet]

So is vat not reclaimable on modular?

[DanielSten]

Hi, I want to ask a question that will hopefully clarify everything if someone can answer the question.

I want to become a Helicopter pilot and I want to take the following courses, PPL(H), CPL(H), ATPL(H), FI(H) and IR(H). Possibly also some type ratings and of course some hours of training time as well as groundschool and books.

To reclaim the VAT on this I need to look at myself as a self-employed, correct? This is convenient as I want to start of as a instructor and therefore will be paying VAT in the future. Should I register for VAT before commencing the courses and keep the school I'm training at sending invoices and I keep paying and reclaiming VAT after each invoice?

It will probably be like one big invoice for PPL(H), CPL(H), ATPL(H) and FI(H) and after that it will be smaller for hour-building and for the IR(H) later on. For this I can just keep reclaiming VAT each quarter for the invoices I've recieved, correct?

I just want to clarify this since I want to become a helicopter pilot and the best way is to start of as a self-employed. Also, do anyone know if there's any problem being a non-UK citizen but still european? What do I need to fix before registering for VAT?

Best regards and safe flying,
Daniel

[Whirlygig]

If you are a non-UK, EU citizen and want to train and later work in the UK, get a professional accountant who understands both Swedish and UK taxes. Do not rely on any advice on here in this circumstance.

Cheers

Whirls

[staywet]

Just to clarify regarding what might happen if , having reclaimed the vat on training costs, you go straight into an employed job (lucky you). I understand that if you still have any vatable product in your company when you cease to trade, you are required to repay the vat. Therefore a self employed pilot still has the product (his training), he has not sold a single piece of it. The vat man could take the refunds back.

I dont think there would be a penalty as thesystem allows simply that the business pays back the vat on any unsold product that remains in the business upon cessation.

Is training the same as the product?

[Whirlygig]

The vat man could take the refunds back.Yes, and they have the right to charge interest at the official rate.

Cheers

Whirls

[staywet]

I am not so sure about them charging interest or even a penalty unless you have been careless or deceptive. In the case of simply ceasing to trade, you only have to repay the vat that you have claimed for items still in the business at the date of closure. So, a shopkeeper will have to pay back vat on their unsold stock. A pilot may have no unsol stock but he may have a helicopter or share, a van, sundries etc and a vat calculation may be required proportionally. The question is whether the training that has maybe had £15-£20,000 of vat refunded, still remains 'unsold' and then has to be paid back? Or, if the pilot has invoiced £100,000 of work over say 6 years, he will have repaid the revenue back £20,000. So, at what point does the vat not require to be repaid, if at all?

I would say though, who cares if after spending £100,000 on training and then getting a full time job flying, would anybody care that they might have to repay the vat man?

So anyway, is vat refundable on modular training?

[Whirlybird]

So anyway, is vat refundable on modular training?

It certainly was when I did it in 2001/2. I had an accountant who prophesied doom and gloom, but I'd been told it was OK, and I went ahead. I then got a phone call from the VAT office, checking that I was OK with all the forms etc. I asked them directly if claiming back VAT on helicopter training was legal. They said you could do that on some types of training but not others and..."Helicopter flying. I've not had that one before. Hang on while I look it up......yes, it's fine for you to claim back the VAT on training costs for that."

And, for the record, you don't need to be a limited company or anything that complicated; I was simply a sole trader - Whirlybird, Helicopter Pilot.

[staywet]

Thanks whirly. Thats what I understood. So post 136 is misleading.

[photex]

Not as simple as that now.

Just been through a long and tedious battle with the HMRC on this and didn't win in the end. Others have done it in the past but I think they've picked up on this now. You may be able to claim back some CPL costs once you have trained AND are self employed but as far as I can see now you will not be able to claim the VAT back on training flights as you go along.

As a bit of a warning to others, I paid the school I was training at a sizeable amount of money to help me do what is mentioned above. They claim in their 'Career Seminars' that lots of people have done this before and is relatively straightforward. However, when it came to the crunch they took my money and weren't much help at all, when HMRC started asking questions.

When I asked for some of this 'consultation fee' back my emails and calls were ignored. This is not a small training company either. Unbelievable.

[Johe02]

I went to court over this and almost won - the outcome was I was able to claim VAT on training up to three years preceding my first invoice for flying.

Fair enough looking back but I would have certainly got my act together a bit more had I known before the fact. :hmm:

[staywet]

So what would you differently? What training costs were you able to reclaim after the first flying invoice?

The thing is, the 17.5% spread all over the training of CPL FI amounts to either running out of money or just having enough to qualify sufficiently to get to raise that first invoice.

We maybe have to rely on those refunds in order to fund progression.

This is such an important topic that something better than rrumour needs posting.

[Whirlygig]

This is such an important topic that something better than rrumour needs posting. Agreed but all people can do here is post their personal, and historic, experiences.

Instead of hoping for free advice here, why not pay a visit to your accountant.

"One does not value what one gets for free".

Cheers

Whirls

[500e]

Whirl
Although that's what I did, your comment sounds like regression to me, more flying required:E

[Whirlybird]

Phone your VAT office and get the facts; a lot of accountants don't know about this.

[staywet]

Maybe it also depends which vat office. Otherwise why do some seem to "get away with it". Surely its either its allowed or it isnt. I spoke to another school today, and the question got "well its a bit of a lottery, some get away with it others dont". I bet the vat man says "speak to your accountant".

[Whirlybird]

staywet, unless things have changed in the last few years, there's a specific VAT Helpline number to call, and they should be able to tell you. But you need to be clear about what you're asking...write it down first. It isn't a question of getting a way with it; it certainly used to be well within the rules.

[staywet]

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.

[photex]

Staywet.

Exactly the situation I was in. I was selling helicopter tours, and flight experiences and also did a bit of trading on aviation items. Unfortunately this was not enough to convince the VAT inspector dealing with my case.
Apparently recovering 'training' costs on a PPL is seen as self supply and not counted as training.
If you get your CPL and then register you should be able to claim back everything in previous 6 months, as at that point your are an 'employable' pilot.

I think at the end of the day it's luck of the draw. I just wasn't lucky...

I'll PM you details of an accountant well versed in this type of thing.

[staywet]

So that suggests you should do the hour building after ppl and finish cpl within 6 months, to be able to reclaim about £5000 vat. (if hour building counts as training costs)? Thats not easy, especially as you need to also squeeze in the exams.

So what portions of the training have people managed to reclaim the vat.

1. All of the class one medical (certainly a class one shows intent)?
2. Ground school and exams?
3. Hour building?
4. All of cpl flight training or only 6 months worth?
5. PPL?

[Whirlybird]

staywet,

I registered as soon as I started the CPL, and claimed for everything from 6 months before this. I can't remember all the details, and my AME wasn't VAT registered anyway.

You're complicating matters unnecessarily. The VAT man told you that you could claim for training if you intended to make vatable supplies afterwards. That's it. Why do you want to sell helicopter toys anyway? You're training to be a commercial pilot/instructor. The timescale is irrelevant. Occasionally people get asked for business plans, but the bottom line is that your VAT on training costs is recoverable, at least for the CPL. I'm not sure about the PPL, but why don't you phone the helpline again and ask. At the moment you're being far more devious than the VAT people are.

[staywet]

Come on Whirly....your post is a little inflamatory. I like flying toys, other people sell caps and T shirts. The idea of selling a secondary product is simply a method that would indicate that the trainee pilot is in fact, in business, and not employed as (an accountant for instance) and using some pretence to one day be a commercial pilot, when the reality may be that the pilot is just looking for a way to save the vat on their hobby.

As all accountants would agree, the best way to fund your training is to earn the money, not borrow it. I am simply suggesting a few ways that any trainee pilot can fund (say half of the £80,000) it may take to qualify.

1. Get £15,000 paid back from the Revenue.
2. Get 45 family and friends sponsor an hours training. £13,500
3. Start being a self employed pilot and open an online supporting business offering books, puzzles, jewellery, models, radio controlled helicopters, postcards, trial flights that your instructor can fly, anything else, anything else, anything else. Say £10,000 profit in first year and continuing each year thereafter.
4. Offer..........Oh look......Pretty well covered half by cpl.
5. Use my savings to cover the other half.


One thing is certain, I will be able to show the vat and the tax man that I am intent on building a business around my flying.

As for being devious, I have come onto this site to find substantial advice, and I have pretty well found simplerumours, for what should be a very clear and understood policy. Surely as professional pilots you all should have a clearly defined, understood and court/tribunal tested methodology to deal with these matters. As it stands, pretty well every school I have approached has a very vague idea of the situation which borders on hoping your vat reclaim may be successful, afterall it worked for my last student. Then when you find a student, he says it didnt work for him.

Remember, if a flying school can offer a definitive successful answer that ensures the situation isnt just hoping for a successful reclaim, that school has effectively made their training costs 20% more affordable.

I have suggested a few ideas that might cover all your ppl and maybe all your cpl training costs. Not trying to be devious, just trying to fund the training with the knowledge that what I attempt to reclaim, is reclaimable, and not seen by the Revenue as some clever scheme.

It seems a shame that the best advise from a professional pilots website comes down to "Pay an accountant"......because they dont know either. Or "Ask the vat man" because he wont be forthcoming about the successful cases won by trainees at the appeals tribunals.

So far this thread (for the past 7 years or so) has provided nothing of substance to answer the question. Is vat reclaimable on training costs?......Well yes! Ah, but maybe not. It depends.

So come on someone......Answer the question definitively.

Actually, I would expect to have such questions already defined in the ground school. If you are training to be a commercial pilot, doesnt any governing body want its members to be 100% exact with both its flying and its business, in order not to bring the whole profession into disrepute?

I do apologise for the tone of this post, and dont wish to offend anybody.
Its just that there are too many questions. And I am still stuck on R22 or 300c? and that may be the most important question of all.

[HillerBee]

Commercial pilots are pilots not business men. I personally couldn't be bothered by the whole VAT thing, so I went to the US and did my training for a fraction of the cost in Europe.

[Pandalet]

Would you trust someone who's only connection to aviation was that he flew model helicopters to take your children flying? Of course not (I hope)! So why would you trust a bunch of people who (mostly) have no professional accounting experience to give you clear, unambiguous tax advice? If you want professional advice, pay a professional!

Ultimately, tax and taxation is not a black-and-white, simple thing. It's complicated by precedents and there is always some subjectivity. What worked for someone else may or may not work for you. The best you can do is make sure you understand the rules, do your best to play within those rules, and be prepared to defend your actions after the fact. I would suggest that given the amounts involved, the cost of some professional advice (which will take into account your specific resources and needs) is negligable. A better question to ask here might be, "can anyone recommend a decent accountant who can help with this?"

I applaud your go-getting attitude; finding the costs of helicopter training is massively difficult, especially if you don't have a first career to use as a step-up. However, the question you are asking has several complicated answers, and trying to find a way around this might find you investing more time, effort, and money than you might otherwise have done in the first place, had you accepted the complexity and worked with that.

[windowseatplease]

Basically it's going to cost you at least £85,000 to get in a position to earn decent money as a helicopter pilot.

[staywet]

Professionals dont know either. Its luck of the draw and a lot of contributors to this thread have had to fight it out at a tribunal....most appear to have lost. Thats why it is important to ask those who have reclaimed, how. Also to find out what went wrong with those that had a hard time.

If the community get this right, all schools can then give rock solid strategies rather than sell only the hope of a lower training cost. Remember, the difference in reclaiming £15,000 / £20,000 of vat, is the difference to getting UK training or US training. Or adding an FI ticket to your CPL, or a whole bunch of Jet Ranger hours etc.

The vat question is that important. I do not think it is good that all trainees consult their various accountants,across the country. All researchingthe same question,and all coming out with random answers. Surely one or two national strategies would confound the attempts of the vat man in winning the appeals.

Not wanting to become a bother on this thread, I will let you know how my plans develop in a few weeks time.

[Whirlygig]

Everyone's personal tax and business circumstances are different and that is why all those who want to reclaim the VAT should seek professional advice. There is not, and cannot be, one definitive answer to all the myriad of questions that have been asked on this thread.

However, as a general rule ... yes, you cam reclaim UK VAT on UK CPL training if your subsequent business intention is to be self-employed in the UK after qualification.

Cheers

Whirls

[Peter-RB]

I took definative advice from my Local Vat inspector, I was already Vat registered as a sole trader/Haulier, so the question was asked: I am going to use the SFH Heli to visit my wide(geographically) area of customers I will be doing this about once or twice per week, also collecting the odd visitor to show them what we do for others in similar trades(connected with International Road Haulage), Vat man checked with his head shed, and the answer came back: Any training or rental for SFH of heli that was connected with my business as long as I did not charge a fee( whic would be against the CAA rules) would be acceptable to allow full reclaim of all Vat charged to me, including any training costs, or books or exams.

So it came to pass, but I would advise anyone to check with your own VAT inspector and get it in writing, for they are well known for saying one thing when they mean another.
so as some briefs would say, "Caveat Emptor"

PeterR-B
Vfrpilotpb

[Plain Torque]

Hmmm ... 'grey areas'... what other outfit does that remind me of?

I actually think the VAT reclaim process is quite clear. I've reclaimed about £4000 of professional training costs from the VAT man.

Just ask yourself do I pay VAT on my training to become a professional pilot? If Yes then ask one further question.

Will I be working in a manner where I will be collecting VAT for my flying services/goods in the future (eg self employed)? If Yes again then the answer is you can apply to reclaim the VAT if you are VAT registered.

To become VAT registered you need to provide evidence that you are going to collect VAT on behalf of the tax man in the future. In my case it was easy. I just sent them some invoices that I had submitted as a freelance pilot and a photocopy of a cheque from my customer (the school I work for as a freelancer). If you are not already trading I'm guessing you'll need a business plan of some sort, but I didn't take this route.

The only real complications that I can see is that, as Whirlybird suggests, there is a time limit on how far back you can reclaim VAT before you are VAT registered. On goods it is 3 years and services is 6 months. Also if you don't end up collecting VAT for the tax man then they will ask for any refunds back!:eek:

Once trading you submit an online VAT return every month. This consists of half a dozen boxes. Nothing difficult, just how much VAT you have paid against how much VAT you have collected. I also claim my VAT on the petrol I use to get me to the airport. Take the difference between the two and you either hand some money over or you get a refund.

The monthly chore is a bit of a pain but the cheque was a nice little reward for my efforts. I didn't use an accountant just read this thread and did some research. Then I called the VAT helpline when I thought I knew what I was supposed to do. I was actually audited after I submitted my big claim but that was pretty painless because I had kept all my records and receipts.

I thought this thread was pretty straightforward compared to trying to get to grips with some of the CAA regulations! Thanks PPruners for an excellent thread.

Good luck with your venture Staywest. I think you need to read between the lines in this thread, remain positive and stay legal.

[Whirlybird]

Apologies, staywet. I had no intention of being inflammatory, but I see how it could read that way. That's what happens when I post when I'm tired.

It seems simple to me because it was. Maybe I was lucky. Or perhaps things have changed since I did my training. I agree with whoever suggested you gt professional advice; if there are so many differences between individuals, then you need help from an expert.

[leftskidlow]

Hi All

Wondering if any one has had any success in the last few years claiming training fees as expenses on their tax returns?

I see lots of threads regarding reclaiming VAT on training which I have successfully done. However have not seen any on the tax side of things.

After obtaining my PPL(H) I continued hour building in order to go on the CPL(H) course, then passed the CPL training and started charging for my time as a profession. The tax return was put in to include all of these training expenses and a week before the deadline the Inland Revenue decided to query it.

Has anyone had any experience of this? I would be grateful for any advice / comments.

Thanks

[hands_on123]

I imagine it will look a bit fishy to the HMRC if you suddenly put a tax return in showing thousands of pounds worth of allowances and not much income.

[puntosaurus]

I set up a VAT registered company the day I qualified, and billed my CPL and FI courses to it. I use that company to bill for my time. I think you're allowed to take service costs of company setup from up to six months before incorporation, and cost of goods (eg. ATPL groundschool books) from up to two years before.

Seemples.

[mrmum]

After I did my CPL(A) and instructor rating, submitted my first tax return as a self-employed sole-trader, tried to claim the costs of the training courses and tests to offset against income tax. Was summoned to the local tax office and told that the initial cost of obtaining a qualification couldn't be claimed, but once you had it, anything to keep it valid was acceptable. Can't see them making any difference between fixed wing and rotary. Seems like setting up a company is a better way to do it.

[trainee123]

Hi I am about to start CPL Training and I am planning on self financing it through loans etc. I have been advised to register as a Ltd company and get Vat registered, so that I can claim the vat back . Has anyone got any experience of this and how it works ? Any advice would be appreciated ?

[Pandalet]

See the whole thread above, but in summary:

You can register a limited company and reclaim the VAT on professional training (so not the PPL part). However, you need to be planning to work as a professional pilot and to charge VAT through your limited company for said work. This means that if your game plan is to get your CPL and IR, reclaim the VAT, and then go job hunting on the North Sea, you are going to have a problem.

[jemax]

I was lucky enough to claim the VAT on my PPL as it was considered to be part of the process of becoming a professional pilot.
I had given up a well paid job, started training intensively in the UK to get through as quickly as possible and presented an outline 3 year plan (obviously partly guesswork at that stage) which detailed the first 3 years of my self employment as a pilot.
On top of which I sought professional advice who negotiated with the tax office on my behalf. It's a bit hazy but perhaps the professional advice was about a £1,000 in the first year.
All (well, the majority) my costs of gaining my ratings, through to IR eventually were allowed to be offset against my earnings, which ended up being about 3 years of offset against income tax.
The Accountant did my tax returns, I put in the invoices/costs to him quarterly and he tidied them up and did the necessary.
Some people have not been able to claim as much as this, but an early professional dialogue with the tax/vat office from day 1 seemed to have paid dividends for me.
The money spent with the accountant saved me thousands down the line.

[JDurrant]

Does anyone have any useful input on the legitimacy of claiming VAT on training costs for overseas students. As a non U.K./E.U resident I am able to claim back VAT on goods purchased in U.K., but I don't see how I would be able claim the VAT back on my CPL training.
Are there any overseas students out there that have trained in U.K. and been able to recoup VAT successfully?

[Old and Horrified]

I only just caught up with this thread, so I apologise if I am repeating anything, but I can speak from (UK resident) experience.
You do not need to be a limited company to register for VAT. Being a sole trader is fine and has advantages in that tax returns are easy and can be done by yourself, while those for Limited Companies are more complex and really do need a professional advisor to ensure they are correct. £1000 for the first year is a bit steep in the current market, but not by too much.
The difficulty is persuading HMRC to allow you to register for VAT. We needed a letter from the flying school saying that he was completing a Commercial course, and that there was good employment opportunities with this qualification (it was a few years ago!). We could then claim back the VAT paid to the training school every three months. We also built up a significant trading loss (obviously) in that period which we entered as part of the annual the self assessment on-line tax return. The rules are that you can carry forward losses from previous years to offset profit in subsequent years so, for the first year or so when there were significant earnings, this reduced the tax liability to zero. However, there is a time limit on how long you can do this for.
Being VAT registered, you obviously need to charge VAT on your invoices (assuming you have stayed self employed) which you then offset against any VAT you have been charged on your expenses (OPC etc), and the rest you pay back to HMRC every three months. I recommend the Fixed Rate VAT scheme which saves bureaucracy and is normally financially beneficial also.
Finally keep very good records including every item of spend and income (spreadsheets are fine) and then, if you are unlucky enough to get a visit from HMRC, you should have no problem. The HMRC web site has loads of advice and guidance on all of these issues, so, like always, do your homework first.

Unfortunately, I cannot speak for overseas students.

[Pittsextra]

I have a question on VAT reclaim. I have an accountant that says one issue is that the company can't be classed as trading until it has raised an invoice but obviously whilst training I can't raise an invocie for my services as I'd not be qualified. Any views?

[Whirlygig]

Yes, get a new accountant. To be honest, I CBFA to look up the exact time limits but you can reclaim VAT on goods up to 6 months before trading and, for services (which flight training is) up to 3 months ... I might be wrong with the actual limits (they vary with the length of the Chancellor's foot) but I am correct in the principle.

Cheers

Whirls

[tipsock]

Anybody able/willing to recommend an accountant to help me complete my PPL(H), ATPL(H), CPL(H) and then FI(H) or MEIR(H) with the least pain to my poor savings? Please PM if you don't want to publish on here, thanks in advance!

[Swiss Cheese]

Some good points here made about the ANO and how the CAA interpret public v private transport. Worth remembering that in the unlikely event of a mishap, the AAIB and Aviation Insurers will take a very close look at all the available evidence surrounding the flight. That often then results in the CAA taking a closer more forensic look at who paid for what.

I have seen aviation insurers declining to pay claims (hull and liability), and also leaving pilots in the lurch (having to fund legal bills themselves) where the line was crossed from simple cost sharing to something more commercial.

[GMavrick]

Chopper,
I shall bare the attitude comment in mind, As I'm yet to start my training and I'm going through all the cost ect. and budgeting for all the parts of the training I'm curious to see what can be saved where hence the "push the rules to the limit comment"


(and before someone says it, YES I have read the "so you want to be a helicopter pilot" posts...ALL of them)


Pitts,
I am going to get VAT registered I have the company set up & seeing an accountant next week. I'm going to also try and import cheap RC heli's from china and sell them through the compnay on ebay to see if I can make £££ to put towards training.

[Pittsextra]

GM - I think we are talking at cross purposes. I think you talking about making a company in order to fund your flying? But of course a company selling RC toys is not related to your flying and so you'll not be able to reclaim the VAT.

What you could do however is get a display authorisation, maybe even do some air races. Do that and maybe someone will give you some sponsorship dollars. What that does is establish a trading position. Once you have done that - and its related to you flying it would be entirely reasonable for that company to not only fund your flying (which in the early stages is you supporting the company with a directors loan - but you'll be able to off set future profits against the early losses, etc, etc blah) but you'll be able to reclaim the VAT.

[Bravo73]

What you could do however is get a display authorisation, maybe even do some air races.

Hmmm, that's realistic. :rolleyes:

GMavrick - I hope that you're beginning to spot a pattern with Pittsextra's posts and advice.

[Pittsextra]

My friend what actually is your problem?

I think you have a very narrow view.

My comment vis the events company was a tongue in cheek, playing devils advocate - if you will - but sadly you are very uptight and kind of just threw out the ANO comment but actually even that doesn't really limit things.

Get a DA - you do know that covers a wide range of things and even if you think that is a step too far then what really is to stop anyone from entering an R22 in an air race just once, getting a company to give you £100 (whatever the number is its irrelevant) to establish a trading position, and then off you go.

Question for you - how do you think a bunch of sports professionals get paid?

Sorry but there is nothing wrong with that advice.

[homonculus]

Sadly the days when you simply registered for VAT are over. Nowadays you have to demonstrate you have a trading company.

If you raise enough money to run your formula 1 car for the year that is fine. If daddy gives you £100 and you spend the next year flying a helicopter....... The VAT inspector will also come round for a cup of coffee every so often and cross examine you about what trading you are continuing to do. Their powers are not insignificant including fines

I am glad OP is off to see his accountant before embarking on this dubious trading

[GMavrick]

Pitts I probably haven't explained properly.
What I've been told about claiming the the VAT back is getting up as a sole trader/LTD company, getting VAT registered but has Homo(not funny) said you need to be seen as trading, but I don't have to make any money.
The flying school I going to go to said that they would sell me r22 trail vouchers and I sell them on. (I'll advertise it, but I probably won't so any, if I do great, I'm only going buy vouchers if I sell them, not have stock) but the Rc stuff I'll have more a chance of actually making money it's more an add on and let's see what happens.

I' have no idea what display authorisation is or let's you do I'll find out.

Getting this thread back on topic, are there anymore ways to cost share then just taking a friend up and slitting the cost 50/50?

[Bravo73]

The flying school I going to go to said that they would sell me r22 trail vouchers and I sell them on.

Ah, would that be Senior Aviation? :suspect: No wonder you want to sail so close to the wind.

I would avoid them like the plague. Do a search for them on here. They are a bunch of crooks. :mad:

[LOZZ]

HMRC won't be interested in registering you for VAT unless you can show them your commercial licence and business plan etc.

Went round the houses on this one extensively last year with them.

[Hughes500]

GMaverick

The simple answer to your question is NO, so why try and get round the law ?

Put it this way you charge to take someone up and you hurt or kill them you wont be worrying about cost sharing you will be asking for some help paying a large legal bill to keep you out of the nick.
Cost share with friends fine, advertise in a club fine, fly an owners machine for free fine, position an aircraft for someone fine. As soon as money changes hands you are breaking the law.
You can do anything you want until something goes wrong !

[thechopper]

Maybe just keep the helicopter flying as a goal for the future and do something that you can realistically afford right now without scheming. Bike licence perhaps?:ouch:
All your friends would want a drink or two once they part-funded your licence.:ugh:

[GMavrick]

Bravo,
Nope I no all about senior aviation, I'm going Tiger Helicopters at shobdon seem to be good guys there, I'm not buying any vouchers unless anyone wants to buy them so I won't have a pile of vouchers that I want to shift.

LOZZ,
don't know why you have encountered that problem the accountant I'm going to see I spoke to on the phone and he said he done this before for pilots claiming the VAT from PPL onwards, I asked did you need a CPL and him and the flying school said no.
Maybe they said CPL because you can actually charge people for flying.
Where as I'm "selling vouchers" and doing training at the company's exspence.

Chopper,
I haven't actually said that I can't afford training, I just wanted to know if there are anyways to save here and there at the end of the day if I could save 10k on then who wouldn't.

Hughs,
Thanks for a definitive answer.

[Pittsextra]

GM - there is no issue regarding the formation of a corporate entity and making a VAT reclaim as long as you have established a trading position. i.e. you are buying things (that bit is obvious) and you are selling things (which is the bit most here don't seem to be able to grasp - and likely because they didn't do it when they were training and so it doesn't compute).

The selling of things would suggest in aviation terms that you are charging out your services as a pilot in the usual sense i.e. passenger transport or ferrying, long lining etc. However there is nothing to stop those engaged in the sporting side of aviation from charging a fee for branding on the aircraft/pilot clothing or corporate hospitality at an event in the same way other sporting personalities do.

It isn't hard to google some aerobatic pilots or helicopter competition pilots and find such branding. It is that which establishes a trading position.

As for the poster that suggested that HMRC needed to see such plan before you can register for VAT - that is utter nonsense. They do not. It would however be very normal for them to want to understand your plan should they look at your affairs - however you will have one. Which might be I was engaged in sporting aviation, liked it and thought "I'm quite good at this I'd like to continue further and gain a CPL".... Its just a simple investment in ones own skill set which enables you to earn more money and - guess what - pay VAT...

Its not hard to work out.

[homonculus]

No sorry, things have changed. You are correct that in the old days you simply sent in a registration form and got a VAT number. Now they don't give you a VAT number until you have demonstrated you are a proper trading company. I have had to provide a business plan with a lot of supporting information for my latest company. They were very fair but thorough:ok:

Yes you can sell advertising, models etc etc and claim the transport costs of the business. If you have a helicopter you can fly each model to the customer, but you won't make a profit and may come unstuck with your business model. What you can't do is get the VAT man to subsidise your training. You do not need a CPL to sell radio control models nor vouchers. You do not need a CPL to brand a helicopter.

I would caution you not to go down this route. Unlike the tax man, the VAT man will come and inspect you. If he isn't happy he has draconian powers and does use them. It just isn't worth it

[Pittsextra]

Not wishing to get into a HMRC face off but you are simply scare mongering now. Its ridiculous. You are absolutely correct when you say its not wise to try and defraud HMRC and that they have very wide ranging powers. That said there is no attempt to de-fraud anyone.

In the example I gave there is absolutely nothing dodge about that situation.

Here for example is the british helicopter team website:-

British Helicopter Team | WHC Events (http://www.britishhelicopterteam.co.uk/Default.aspx?id=525669)

Which suggests HAL, Kannad aviation, enable and dogcam are sponsors.

Are you saying that if one of the team wanted to gain a CPL that wouldn't be viewed as a positive investment in ones own skill and a potential and credible source of future revenues??

HMRC could investigate that until kingdom comes. If invoices would be there, the log book would confirm the flights absolutely and you have a clear plan to fund a CPL and if the company has no funds then the director has committed to funding the supporting things until the company becomes profitable.

Its not black magic.

[homonculus]

Thanks Pittsextra

I am giving my personal experience. sorry if you think it is scary:ugh:

If you are reclaiming VAT and do not have a proper trading company (and have managed to get a VAT number in the first place) you are at risk of being required to repay the VAT plus interest plus fine, but the powers they have mean they can do this….

I have looked at the website but can't see that the UK team is VAT registered. Maybe you know more than I do. Which member is getting their CPL via the website????? And has it been accepted by HMRC?????? I suspect not so this is a hypothetical situation, but I would put my money on it not being allowed. You can compete and are competing without a CPL, so what business case is there for spending £60,000?

Anyhow back to OP - I still think he should be very careful about trying to reclaim his training VAT via a company that is managing quite well selling vouchers without a CPL pilot :ooh:

[GMavrick]

Homonculus,
The way I've had the VAT situation explained to me is that the company will be more like 'Red letterdays' they sell flight vouchers and they wont need CPL's If the tax man asks "why am I claiming flight training" I explain that I'm going from PPL to CPL to FI which is employee (Me) training.
so I go from selling vouchers and passing the customer over to a qualified pilot to carry out the flight.


when I am qualified I could carry out the voucher flights, as a lot of pilots are self employed and charge out there service's that's what I will do but I charge VAT to the company who are employing me.


As the chances of getting a full time job as a pilot with a fresh FI are pretty low, the work most likely would be contract work which is where the company / I will be earning money as a pilot

[Bravo73]

when I am qualified I could carry out the voucher flights, as a lot of pilots are self employed and charge out there service's that's what I will do but I charge VAT to the company who are employing me.


As the chances of getting a full time job as a pilot with a fresh FI are pretty low, the work most likely would be contract work which is where the company / I will be earning money as a pilot

And then what happens when you end up getting a job as a co-pilot on the North Sea? Or any other job where you are an employee? Therefore, not being in a position to charge VAT.

I suspect that the VAT man will come calling, asking for his slice back...

[GMavrick]

Yes, that could happen, most likely I would close the company if I got a permanent job, and because the company would have made a loss the VAT man shouldn't come knocking.

[Bravo73]

Yes, that could happen, most likely I would close the company if I got a permanent job, and because the company would have made a loss the VAT man shouldn't come knocking.

So you're in a situation where you have claimed back VAT on the expectation of charging VAT on future sales. And those sales then never materialise.

And you think that the VAT man won't want his slice back? Well, good luck with that.

[GMavrick]

Any VAT registered company could have that happen, but most likely it would be a few years of self employed work where I can charge VAT before a full time job would come along.
This is probably going to be one of those things where i'll just have to see happens.
when the Maths is done its around £20,000 that can be saved on training I would rather save that and run the risk of possibly having to pay that one day than not saving that money in then first place.

[pepsi_max2k]

If any UK students are still thinking of reclaiming VAT, tl;dr: Don't.

If you misunderstand that, ask yourself if you've considered the following:

1. Have you read anything about VAT regulations: https://www.gov.uk/topic/business-tax/vat

2. Specifically, reclaiming VAT: https://www.gov.uk/reclaim-vat . The very first line of which is this
You can usually reclaim the VAT paid on goods and services purchased for use in your business.

3. "Business" is a legal definition. You might wanna make sure you meet this. https://www.gov.uk/set-up-business
https://www.gov.uk/working-for-yourself
Specifically, you must provide goods or services regularly for renumeration.

4. So, you're a business. In which case, which exact part of PPL(H) training relates to any of the goods or services you're selling? Oh wait, you're a PPL so can't actually "sell" anything, yet. But I'm sure you've already thought of a way of explaining this to a judge.

5. Two years later and you're a CPL(H) with a viable business and sales. You were aware of the time limits involved in reclaiming VAT right? https://www.gov.uk/vat-registration/purchases-made-before-registration

6. You're aware of the specific scheme any goods or services were sold to you under? VAT Schemes Guide ? Alternative ways of accounting for tax (http://www.marcusward.co/vat-schemes-guide-alternative-ways-of-accounting-for-tax/)

7. And retain invoices with required details? https://www.gov.uk/vat-record-keeping/vat-invoices

8. You know the VAT rate of these, and are sure they're not excempt? https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services

9. Even then, in most cases, you simply can't reclaim VAT on training for yourself. https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim35660

Now of course, if you already own a busisness for which putting an employee through a (H) training course is a viable expenditure, by all means go ahead. But if you can afford to pay for other people to train whilst employing them, you wouldn't be reading this.

[md 600 driver]

4. So, you're a business. In which case, which exact part of PPL(H) training relates to any of the goods or services you're selling? Oh wait, you're a PPL so can't actually "sell" anything, yet. But I'm sure you've already thought of a way of explaining this to a judge.

So where does it say a PPL can't be paid

Extract from uk CAA
Privileges and conditions

A PPL for helicopters will allow you to act as pilot in command (PIC) or co-pilot in non-commercial operations on helicopters.

The exception to this is for holders of a PPL (H) with instructor or examiner privileges, who can be paid for the following:

Flight instruction
Conducting skill tests and proficiency checks
for the LAPL (H) or PPL (H) and any associated ratings and endorsements.

[Whirlybird]

Before I reclaimed VAT on training for my CPL(H), I phoned my local VAT office to check that it was legal. I explained that I was a PPL(H), was training for my CPL(H), and intended to be self-employed as an instructor after that. I still remember the conversation...
"Some types of training you can reclaim and some not. Helicopter instructing? Ooo, no-one's ever asked about that; I'll have to look it up... Here we are... Yes, you can definitely claim it back."
She then gave me the time limits, which I don't remember, as this was back in 2002 or thereabouts. So of course, things may have changed since then. If they haven't, it's legal.

But of course, it would be sensible to check with your VAT office first rather than believing anything you read on PPRuNe.