Tax on FI Training?

[VFE]

Hi folks,

What are the circumstances which allow the VAT on an FI rating to be tax deductable?

Cheers,

VFE.

[Mark 1]

Tricky.
You can claim against tax any costs neccesarily incurred in the course of your work. Instructor upgrades and renewals are normally allowed.

But, just as graduates can't claim back university costs against future income, you won't have much chance of claiming the cost of CPL and FI against earnings.

Unfortunately, the old NVQ type allowances were scrapped due to widespread abuse.

[Whirlybird]

Mark is mistaken. You can register for VAT, and claim back ALL training expenses so long as you're planning to be self-employed afterwards. Most helicopter people do it, but not a lot of f/w; don't know why. I did it and had no problems. The VAT people phoned me, so I was totally honest and asked if it was OK. "Oooo", said the lady, "helicopter training....not sure, not had one of those before. Some sorts of training you can claim; I'll look it up....yes, that's fine".

However, I had another business too. If you don't, you could get asked for a business plan; I know some people who were. But it wasn't a big deal.

You can also backdate claims - three years for supplies, six months for services, which is what training comes under. Bet you wish you'd done it sooner now!

If you still don't believe me, phone the VAT helpline and ask. I don't have the number to hand, but it's not too hard to find - do a search.

[VFE]

Thanks for your reply Whirly!

That is very interesting stuff so thank you. I have read the Inland Revenue webpage(s) on the subject in great depth following your posting and have also PM'd you regarding the business plan aspect if you would be kind enough to spare a few moments to give me a 'heads up'?

Thanks again mate,

VFE.

[Whirlybird]

VFE,

I've replied by now, as you know. Good luck. :ok:

The rest of you - this is all tried and tested and perfectly legal. I did it for all my CPL and FI training, and had no problems. The fact that I had another business which I registered at the same time for VAT (I had to, under the rules) meant that overall I was sometimes paying them money, which may have helped. But cheques from them for refunded VAT turned up promptly with no problems.

This has been discussed before on PPRuNe - I think it was on Rotorheads. Why don't you do a search there?

[VFE]

One more for Whirlybird.....

The VAT man says one must register for tax in order to claim back services purchased for your 'business' and that you must then charge VAT yourself when selling your services.

Therefore my question is: when a student pays the school for his lesson, does the school charge the VAT or the instructor and how does the whole VAT aspect work for the instructor in these circumstances? Someone here commented that the vast majority of instructors work self-employed and are called upon as and when a school needs them, is this correct?

Obviously, I'm keen not to incur the wrath of the VAT man through ignorance!

Thank you for your time,

VFE. :ok:

[QNH 1013]

VFE, Its really very simple. I am a VAT registered instructor. At the end of each month I give each flying school, (I work for several) a vat invoice, which is just an invoice for a certain number of instructing hours at the rate the school pays all its self-employed instructors, and the total then has 17.5% vat added.
Yes the school has to charge vat on lessons, and it doesn't matter if the particular instructor is vat registered or not, the customer still has to be charged vat at 17.5%.
The only downside to being vat registered (apart from the small extra paperwork) is that when I work directly for a customer, e.g. type conversions in customer's own aircraft, I still have to charge vat. In practice, the customer doesn't know this, or care, because I charge a vat-inclusive price. It does, however, mean I get 15 % less in my pocket on these occasions. However, I balance this by getting the vat back on extra training and renewals.
Whether it is worthwhile or not depends on your individual circumstances.

[BlueRobin]

Okay so a CPL+FI is about 10 grand. Would HM R&C stretch another 10k for an IR???