self employed FI and the tax system

[aerosteve]

hi,
can anyone advise me on what can be claimed for (expenses) when working as a self employed FI. Can anyone advise a good accountant in the central scotland area that deals with aviation.

thanks in advance.

:confused:

[VFE]

There's really not much to it - firstly you need to contact the Inland Revenue and tell them your situation and they'll send you the relavant bumf in the post for you to claim VAT back and register your 'company name' ie; YOU.

You should avoid an accountant if you can as they'll rip you for some of your hard earned, however you don't wanna screw up and end up doing a Ken Dodd... however, the IR literature which they'll send you explains it all pretty much.

Best advice I can give is to collar one or two of the FI's at your airfield and ask them how they go about it - us FI's are usually an amiable bunch and I'm sure one will happily spend 20 minutes with you, showing off how they manage to bleed a little more from the system than the next man. ;)

VFE.

[aerosteve]

anyone know if i can offset my instructor training against tax?
cheers...

[SD.]

Prior to flight training I was self-employed and VAT registered.

Now, if I needed to buy any tools or when I purchased my van, I was able to claim the VAT back and offset the cost against my tax. I don't see how buying your FI rating is any different. You are purchasing something that will enable you to do your job.

Other expenses you can put through the tax are clothes - uniform, petrol to get to and from work, charts and other equipment you need to do your job.

I know others have advised not to get an accountant invloved, but a shrewd accountant will enable you to pay as little tax as possible and will know any loop holes you can exploit to get some of that hard earned cash back you have spent during training. My accountant used to charge me £350 at the end of each tax year, not a great deal on the grand scheme of things.

[The Otter's Pocket]

You have to be turning over £55K to be VAT registered.
As someone who is VAT registered...avoid it like the plague.

[Flingingwings]

No you don't!
You can voluntarily VAT register

[The Otter's Pocket]

I stand corrected, it is what I have always been told. I believe that the figure may have risen.
Can you point me to where this information is?

[Flingingwings]

Otter's Pocket,

Sorry I can't point you to where to find this info, but any accountant should be able to advise. You could try PM'ing Whirlygig 'cos she be a numbers wizzard :)

Above a certain threshold VAT registration becomes mandatory, but there is nothing to stop you registering voluntarily. This I know to be true as I'm VAT registered. Initially as an FI, more lately as an onshore corporate pilot :cool:

[The Otter's Pocket]

Cheers
I will e-mail my accountant tonight and see what she has to say.
My company is already registered for VAT.
I didnt realise an individual could be registered I thought that you had to be a company. Not sure if you can be a pure sole trader or if it is a Ltd Coy though.

[QNH 1013]

Otter's Pocket,

You can be vat registered as a sole trader, a partnership, or a Ltd company. You don't have to turn over any particular figure to vat register, but you do have to be in business.

It's all quite straightforward, and all the information you need is in the Customs and Excise guides which they will post to you free of charge. I believe they are all on the internet now too.

[Miles Magister]

As said above you can register voluntarily for VAT but if you turn over just over £61K you must be registered for VAT. As an FI I personally believe you are better not to be registered as you have to charge your customers VAT on top of what you want to earn. The reclaims are less than the lost business. Once you scale up your business then consider it.

You can claim anything necessary for your business. This includes a proportion of your property expenses if you work from home. If you add up all your start up costs you can claim any losses against your previous 4 years tax bills.

Just be carefull about IR 35 if you work for one flying club or at one airfield. Mr Inland Revenue disallowed £900 of travel expenses I claimed because they were to the same airfield and he considered it my primary place of business. However at the same time he allowed a computer I bought 5 years previously.

Your local tax office will actually send a small business tax advisor out to see you free of charge. They will tell you what oyu have to pay but not what you can claim. Visit your local enterprise council who will be more than pleased to help you.