Per Diems

[robash]

Ok, so I've searched for per diems throughout this section but cannot find what I am after which is an agreed definition for 'per diems'.

From what I have read there seems to be a a grey area (but that may be my misunderstanding) between Flight Pay - an extra amount paid on each day you fly and therefore taxible -and per diems which I thought was to cover overnight meal expenses while away from base (under the proviso that b&b is covered by hotel) and therefore not taxible.

Any advice?

[hawker750]

You have it pretty well right. Flight pay is a supplement to a basic salary that has to be taxable. Allowances or per diems, however they are paid, are to cover crew expenses down the route, food, laundry beer etc. A % should be tax free in the UK dependent upon how well one has negotiated with the revenue. We have 80% tax free and is paid on an hourly away from base formula.

[robash]

Thanks h750 - so if we are paid per diem every day we fly, even if we return to base that same day, this is really flight pay? I had it that per diems only applied when overnighting down route?

[Miles Magister]

Per Diems are specific to each company as negotiated by them or by you personally with your own tax office. I believe, not being an expert, that all income is taxable unless agreed in writing by your tax office. The IR have made several attempts to tax allowances in line with the rest of the business alloances paid to all UK employees, you get your meals paid but no more. If you receive more than you spend on meals then that is taxable income. IR 2063 from memory.

The aviation industry has traditionally negotiated a set amount in lieu of meals because we often can not make it to a restaurant with BA setting the precedent. However episodes in the past like BA allegedly paying cabin crew double allowances tax free to get them to do extra duties did not endear us to the IR.

The current chancellor is allegedly attacking our per diem scheme again. The IR have often said that whatever we can produce in receipts which are dated and timed for meals during our FDP will be accepted as tax allowable with any balance between receipts and per diems taxed as income.

Bottom line is you have to negotiate any tax free per diems yourself with your tax office. There is no rule or law but the precedent already set. You may find your company will negotiate on behalf of all your crews but not all companies have the will or possibly the expertise.

MM

[hawker750]

Per diems, as I said cover expenses the crew have when they are away. Lunch, dinner etc, it does not matter that you are not away over night, you still have to eat! The revenue will allow the comapny to pay tax free for lunch etc UPON RECEIPT OF SUCH EXPENDITURE. However, you can negotiate with the revenue for the company to pay an hourly amount in lieu of actual costs involved. BA set this precident many moons ago when a shilling got you a three course lunch at the Ritz! Mention this precident in your negotiations with the revenue. As I said ours is 80% tax free. It is a battle with them but if your company is persistent they can win through.

[robash]

thanks h750, makes sense.

My confusion came as I am being offered the same per diem amount if I leave home base at 0900 and return at 1200 on the same day (ie no meals required) as if I overnight away from base (so have to fund lunch and dinner fromt he same pe diem.) Doesnt seem to stack up to me...but what do I know.

[Bucket]

We only qualify for a per diem for an overnight stay. So if we do a long stay with no overnight stop then all expenses for meals etc down route are for our pocket and not covered, which seems a little harsh.

Following what I have read I will be keeping all reciepts for day expenses and presenting them to the IR.

[Gulfstreamaviator]

A per diem is payable to cover the estimated cost of providing crew with the equivelent services that they would use, if at home, and covers the "on cost". In theory the per diem should not result in a profit for the crew member.

In theory.

However as the cost of living varies in different countries and different cities, it is usually but not always a spacific sum.

Usually but not always it does not cover lunch or dinner spacifically.

Robash: In your example, it is just an administrative facilitator.



So in general a per diem, should (depending on which sector of aviation you are operating in) cover a reasonable sum for food drink, and entertainment.!!!!!!!!!!!!!!!!!.

Most companies will cover outside of the per diem: Bed and breakfast, limited unifrom laundry, internet access (if the company is in the 20 or 21st century. ), plus transport to and from the hotel to the airport. Plus if the hotel is a vast distance from any eating facilty, then transport tere too.

The Marriott hotels and several others are well suited to aircrew, and for example my previous company was in Moscow many many nights. We used the Marriott Hotels, and the crewsd actaul cost of living: ie perdiem equivelent was -0. The hotel provied everthing for the crew, to live without eating a per diem.

A per diem should not be taxable, as previously mentioned there should be no taxable gain for the use of a per diem.

Duty pay, Block pay etc, is part of a salary package and would normally be taxable.

glf