A Taxing problem........

[First.officer]

Hi Ladies and Gents,

Am wondering if i could seek some general advice......back in 2008 i had the opportunity to start flying and to cut a long story short, i had to pay for my Type (well Class) Rating on the C525 (CJ) - cost £8700 GBP.

Cutting forward a little, the company i was working for went belly-up in October 2008 and i was fortunate enough to find employment again within a few days, albeit on a self-employed basis for a period from Nov. 2008 until Dec. 2009. At this moment i am in the process of having my Accounts prepared and my Tax Return for 09/10 submitted. I have recently learned that it should be possible to include my Invoice for my Type (Class) Rating against tax owed for this financial year (09/10), that said my current accountant seems to think that it cannot be included because;

1. Type (Class) Ratings are not tax deductable/allowable by the UK Inland
Revenue.

2. The Invoice was originally paid by me in 2008, outside of the current
financial year for which my Tax Return is being submitted.

What i would like to ask of my fellow PPRuNe'rs is - has anyone on here sucessfully included a Type Rating (or Class) in their accounts and subsequent Tax return, and also, i am led to believe that even though i paid for the Rating in 2008, it is still allowed to be included for the year 09/10 - anyone know if this is correct ?? Have discussed with BALPA and the best i get is technically 'yes', but it's a grey area !

Look forward to replies.....oh, and apologies - i'm no taxation expert, far, far from it......as i'm sure is apparent in my post......

:ok:

[757_Driver]

not sure it really answers your question but...

I claimed mine in the year that I did it, but my accountant said it was only claimable against income in that financial year, so it wasn't as lucrative as it may seem.

eg. if you paid £8700 for your rating, but say started work towards the end of the financail year only earned £4000 during the same financial year then you can only claim against that £4000 - so you wouldn't get much back.
It also depended on how the rating was paid for and what the contract said. (I'm not an accountant so I'm just remembering what my guy said) Basically If it was a 'speculative' type rating then definately not. If you had a letter and contract of employment that said 'you've got this job and have to pay £xxx for the rating' then it MAY be claimable.

You almost certainly cannot claim an 08/09 rating against 09/10 income. But wether you can retrospectively claim an 08/09 rating against your 08/09 income but putting it on your 09/10 return is a question for your accountant. Make sure you ask him the right question though! he may think you've asked wether you can claim last years costs against this years income.

On one final note, most tax returns are processed by some external agency (GE Captia or whomever the government employs this week) by a bunch of minions punching it into a computer. HMRC inspectors then audit SOME returns. If your return gets processed, you get a cheque, then the taxman only has 12 months to change their mind. If they don't audit yours or they do it outside 12 months then you keep the dosh. So 'grey area' stuff may be worth a punt anyway.

[First.officer]

Firstly, many thanks for the replies guys, very much appreciated !

I paid for the rating in order to facilitate a move to the RHS on a Citation...was working up to that point for the same company but as an Ops Controller, the rating allowed me the opportunity to move to a flying role within the company, no letter of offer was made to this effect though.

I spoke (albeit briefly) with a BALPA recommended adviser, who stated he thought it was a 'grey' area, he advised that as you suggest 757_Driver, that i may re-submit the cost against 08/09's expenses, he also thought it may help if included against this years (09/10) return, the fact that for a period i was self-employed in 09/10. To be fair, not being very accounts-minded, i probably am poor at explaining these things !.

Wouldn't ordinarily go too far out of my way to try and include it, but given i don't get paid a huge salary, as the saying goes for a well known supermarket, "every little helps" !!.....oh, and the fact, like everyone else, having spent huge dollops of cash in the past to get here today, am damned if i want to give any of it away to the taxman when he doesn't allow anything to us back on our initial training for licences etc. !

:ok: