Tax Relief on ICAO licence conversion

[ASW19b]

Good day all.
I hope you are not all groaning about another tax relief question!

Has anyone tried claiming for the above? I had been working overseas with an ICAO licence for a couple of years and on return to the UK, converted it to a JAR Frozen ATPL 3 years ago. I have been employed in the UK since.
With the help of an accountant we claimed for costs incurred converting the licence and received money back.
The taxman has now decided to dispute some of the claims.
We are appealing and would like to know if anyone else has went down this route.

Thanks,

asw19b

[Bealzebub]

A bit too vague. There is no such thing as an ICAO licence. It can only have been a licence issued in a foreign country that was a signatory to the ICAO. That is just about every significant country and supranational aviation authority on the planet.

Most allowable expenses in the Uk for an employee, require that you incur those expenses wholly, necessarily and exclusively (all three tests to be satisfied) in connection with your actual employment, rather than simply in order to make you eligible for said employment.

I am guessing their objection is based on these tests?

[ASW19b]

Here is my background.

I gained a South African pilots licence in 2002 and worked in Africa as a freelance pilot until January 2006. From 2005 I studied for my JAR ATPL exams using a distance learning course. During the course of the year I returned to the UK to do some of the exams.
On my permanent return to the UK in January 2006 I completed the exams and proceeded to convert my SA licence to a JAR Frozen ATPL, finishing off in May 2006.
I then entered employment with a UK company in July 2006.

Last year with the help of a an accountant we submitted a tax return claiming costs incurred during the licence conversion and it was successful.

However this year the claim has been disputed. We are in the process of appealing and would like to back up our appeal with other case histories.
My accountant feels we do have a good case using the relevant legislation.

Any feedback most appreciated.

asw19

[Bealzebub]

Did you pay UK income tax on your freelance earnings in Africa?

The exams and training that you completed enabled you to convert your South African licence to a United Kingdom (or JAA) licence. These were expenses incurred by you that enabled you to apply for related employment in the UK. Upon completion of this training you were then successful in obtaining paid employment (presumably) relevant to that training.

To claim these training/examination costs as an allowable expense against your employment earnings for 2006/7 you would have to show that the expenses were wholly, necessarily and exclusively incurred as a result of that employment.

For example if you were employed in South Africa and that same employer then moved you to London where you were required to untake this conversion training at that employers behest, and that employer would not pay for this training themselves, you would have a reasonable case that satisfies the three tests. However if you decide to return to the UK and needed to obtain further testing or training in order to apply for new employment, that might satisfy the "necessary" test, but not the other two.

If you were self employed in Africa, and then returned to the UK as a self employed pilot you might have a stronger case, but I suspect this is where the original confusion came from. What legislation is your accountant suggesting you rely on?

[ASW19b]

Thanks for info B.
Didn't pay income tax on earnings as I was only in UK for a few weeks.

Will let you know what exact legislation he intends to use after I have spoken with him next week.

Cheers