Some Newbie FI Questions

[BlueRobin]

I am coming toward the end of my ATPL theory course. With 4 subjects to go and all going well, I should be free to commence flight training about mid-March.

Taking on-board what has been said here previously, going the FI route might seem old hat at the moment but there is a valid point in deferring the IR for later, spend the Summer instructing and being on-the-ball, especially come IR training time.

To this end, I will most likely do the CPL+FI+IMC at Ontrack.

Having been spat out of the system at the other end, what do I need to prepare for?

Par example ...

Is the recruit time brief at the moment? I gather the throughput is pretty high.

Do most schools use self-employed instructors? If so, I will need set up my own company...

What tax may be claimed back? For example, can the VAT be claimed back from the cost of training if I register for VAT? On FI wages, I'm not sure if this effort vs cost saving adds up. Presumably though items used in the course of work may be claimed back. But will HMRC come after me if I jack it in to do the IR?

[sierracharlie]

Recruit time is variable; some seem to walk straight into a position others have had to wait for a post to be become available.
Possibly worth having a word with some of the Flying Schools/Clubs that you know or have flown with and explain that you are training for FI qualification and will be available at some point.
I believe that most FTOs employ Instructors. I would not bother with the hassle of going self-employed. Besides, I don't believe that Flying Instruction qualifies as self-employed in the eyes of the HMRC. Having said that, there are Instructors on here who have said that they are self-employed and have no problems dealing with the authorities.
If you register for VAT then you will have to charge VAT to your customers. More paperwork and you will also have to undergo VAT inspections. :uhoh:

[spittingimage]

Beg to differ slightly.

My amateur understanding is that any remuneration received where it is not from 'being an employee' is automatically self-employment in the eyes of HMRC. 'Tis one or the other - or you can be both at once where you have two 'jobs'; for example day job in the office and writer in your spare time.

You have to register as self-employed with HMRC within 3 months of starting and pay the UK National Insurance Self Employed rate - about £2 a week. However, the get-out from NI is if you earn over the tax year less than a minimum amount (about £5,400 ?). This might still be taxable though depending on what other income you have. You do not need to 'set up a company' to be self-employed. In fact, if you do set up a company you will be an employee of that company and will pay even more NI and involve yourself in a whole lot of administration that is way beyond what you require (as I see it).

Taking this to a logical conclusion, if you are on the beach and take a photo of some 'celebrity' and sell the photo to a tabloid for some ridiculous sum it would seem to count as self-employment. And a whole lot easier than flying instruction; but I digress.

Furthermore, I no longer instruct but still would advise that where you do the FI course be chosen very carefully. I would not do one where there was not a very good chance of being taken on as an instructor on course completion, even if only at weekends for example.

[Malc]

I registered for VAT once employed part-time as a FI, and shortly after my first return received the VAT element of the FI training back into my bank account courtesy of the tax office. I'm kicking myself for not having registered for VAT before the very first PPL lesson.
It's pretty painless, I was employed full time in a "regular" job - PAYE and NI all accounted for, and self employed as an FI; so needing to submit VAT returns just for this element. Doing the FI thing only on a part-time basis meant that my annual income from it fell short of the previously-mentioned threshold, which means that effectively you can claim VAT back on your expenditure for the FI work, but need to charge VAT on what you "sell" - i.e. your time as an instructor. Some clubs will expect you to include this in the agreed hourly rate, others will wonder what you're playing at if you include it and actually expect you to add it on, as they will reclaim it somehow anyway....it's nice when this happens.
Hope this is helpful. If I may add once small word of advice, check out where you're going to be doing your FI training really really carefully. Speak to past students if you can find any, hang around the club house and see how current PPL students appear to be treated, how satisfied they are with the set-up and the training. I made a costly mistake in choosing somewhere convenient for home, with late availability, and new I'd made a mistake after a week or two. The school I swapped to was excellent. Wish I'd done the research better! :mad:

[Whirlybird]

About VAT

they will reclaim it somehow anyway

All flying schools will be above the VAT threshold, and therefore registered for VAT. Therefore they can claim back the VAT they pay out, eg to flying instructors. So they have no reason whatsoever to expect you to include it in your hourly rate! I'd strongly question any school who did that as to their reasons; it makes no sense whatsoever.

For the record, I registered for VAT before doing my CPL and FI courses, and I too wish I'd done it earlier. It's very easy, though paying an accountant a little to set it up may be worthwhile - I think I paid mine £60, then did all the returns etc myself. I was self-employed anyway (research/writing) so had to register both businesses - my writing one, and my future flying one. In due course I got a call from the VAT people with some questions. I told them, quite honestly, that I had registered mainly to claim back the VAT on my training, and they said, "Oh yes, that's quite legal". So don't be scared to do it.

[foxmoth]

If you want to instruct this summer I would suggest that you need to crack on with it, most schools will probably start to look for their summer instructors March/April time so you need to be ready then. Good luck.:ok: