Legality of employer covering PPL flight training costs?

[T4RG4]

Hello PPRuNe!

Long time lurker. Finally registered as I am about to start my student->PPL training. Well, I thought I was about to.

Question: In recent weeks my employer has offered to cover my PPL training. Can they legally do so without me contributing?


Background

I'm fortunate enough to be working in software development, creating flight simulations. My current job has placed me deep into the world of aviation and I've come to absolutely love everything related to flying. Over the last few months I've been thinking about getting my license. It would certainly help me better appreciate this world and therefore help with the day job. Converting the theory of piloting aircraft into solid, practical experience. It would also give me a real sense of achievement and I'm incredibly excited about the whole thing!

I am aware of the shared cost stance once qualified as a private pilot but what is the deal when it comes to student flight training? Do I have to be training for a CPL in order to have them cover my costs? I cannot find any information on this and have reached out to the CAA but to be honest I'm not expecting a speedy response for little old me. Maybe there is something I've overlooked and you can point me to the correct source. Any guidance you might be able to offer would be most welcome.

Thanks.
Steve

[ChickenHouse]

What should the employer possibly hinder to pay your further education? The employer may have discussion with tax authorities, but as you are into flight simulation programming, they most probably get it even accepted as ordinary operating expenditure and further education expense. But besides from the tax questions of your employer, nobody will care whose paying your training.

[Crash one]

Airpolice
Why shouldn't he be aware? He seems keen enough to find out all the rules.
Don't be so presumptuous.
As for the question.
Nothing in the rules to prevent someone paying for someone else's flight training.
I can't see what the taxman has to do with it either, your employer could call it salary, training expenses, whatever, but nothing to do with CAA rules.
If you take your employer as a passenger the cost must be shared, but that doesn't stop your employer giving you a brown envelope for Xmas!

[Parson]

I don't believe there is anything wrong with that in principle.

The reasons for your employer doing so would have a bearing on how it would be looked at by the tax man though. If it is deemed to be of assistance to your day job (by your employer), it could be argued that it is part of your development, ie a 'training course' funded by your employer. If however it is a perk, then that would be a taxable benefit.

[ChickenHouse]

First thing is the payment for training and I do not see any point against an employer paying this as whatsoever.

Second thing is what this is for the employers financial department, tax authorities and your wallet. This part is none of your business, as long as it is not called salary, in which case you may be eligible to pay income tax on benefit in money's worth.

Third thing I see a benefit for your work and an argument to have this declared further education. Depending on the tax clerk, this may hold or not, as it is an education "also suitable to be used for leisure". Probability is high you get through tax audit as part of business expenditure, if paid by the employer and labelled education. Probability is very low, if you try to pay yourself and later deduct from tax. CPL is different.

Forth thing is after obtaining the license and real flying afterwards. The field "what if" flying PPL in the grey areas of a commercial environment is a huge and in the end unresolved issue for many shades of the deed. Cost sharing is only one small issue in a complex framework of questions, like in which aircraft and when do you need an AOC - all unsolved issues and really, really, really juridical complicated.

[homonculus]

There is absolutely no problem with your employer paying for anything, but HMRC will consider this to be in lieu of salary and a benefit in kind unless your employer an demonstrate to them that this training is a necessary requirement for your employment duties. I very much doubt this will be the case.

Your employer will have to declare this on your P11D and you will have to declare it on your tax return. I would advise you to take independent tax advice. You may well get a significant tax bill that needs to be factored in. In some circumstances it can be better to increase your salary instead

[abgd]

I don't know the answer but I hope you manage to go ahead. Some flight simulator stuff was clearly invented by someone who's never been in a light aircraft (Saitek, I'm looking at you). Whatever f/s related work you're doing, I'm sure it will benefit greatly.

[Saab Dastard]

As Homunculus has stated, there could be a tax (and possibly NI) liability:

https://www.gov.uk/expenses-and-benefits-training-payments/overview

Unless you can demonstrate that it is Work-related Training, and your employer funds it or re-imburses you, in which case it may be exempt from tax and NI.

"Work-related" includes any training course or other activity designed to impart, instil, improve or reinforce any knowledge, skills or personal qualities which are likely to prove useful or better qualify the employee to perform his job

https://www.gov.uk/government/publications/non-taxable-payments-or-benefits-for-employees-hs207-self-assessment-helpsheet/hs207-non-taxable-payments-or-benefits-for-employees-2016#employer-funded-or-employer-reimbursed-training

Training and course fees (http://www.rossmartin.co.uk/employers/employee-expenses/265-training-and-course-fees-employeremployee#overview-and-examples)

I can't see that the CAA have any input into a purely financial arrangement between you, your employer (and the taxman).

SD

[xrayalpha]

From CAA point of view, no problem. We often have training paid for by people other than the student (teenagers come to mind!)

From the flying school point of view, we might need to keep a record for money-laundering purposes if the total exceeds Euro15k or a series of transaction might lead to that or a few other things.

https://www.gov.uk/guidance/money-laundering-regulations-your-responsibilities

For HMRC, then you are best to have a chat with an accountant, or look to a tax forum, rather than a flying one!

ps. There used to be a scheme where you saved tax on training for a CPL, the first part of which was gaining a PPL. Of course, many people stopped their CPL training shortly after completing their PPL ;-)

[clareprop]

Are you sure?

Tell us what you think the rules are.
What an arrogant, pointless and aggressive response to a genuine question from a new poster.

T4RG4 - just count your blessings and get on with it. If it's training as part of your job, the icing on the cake would be for the training organisation to invoice your employer direct.

[FerrisBueller]

Could the PPL training be classed as "research" perhaps? Might be a better bet than education or further training, tax wise I mean. I suppose it depends on how you or your employer envision it being used/beneficial. For example if you are designing a flight sim which may incorporate a flight training element like Microsoft Flight Sim then you could certainly say it has research benefits!

[late-joiner]

Effectively a company can pay for training (reinforcing, updating or a new skill) and it will be tax deductible for them and not a taxable benefit in kind for you. Does not work the same if you are a sole trader, but as an employee of a company it does work tax efficiently.

[150 Driver]

Agree 100% with the interpretation above re the CAA rules - no issues as the rules are intended to prevent a PPL holder doing commercial work (i.e. being paid for flying) which you clearly aren't doing.

As for the tax position, as a PPL and a Chartered Accountant I have to laugh about the different interpretations above. Would you take as gospel the advice of an accountants' forum about flying law ? I will refrain from giving my view as I'm sure that many will know better :=:=

I suspect your employer has an accountant, get your employer to get advice from them on the position as to whether it is a benefit in kind or taxable through the payroll - it is primarily the responsibility of the employer to get right.

Good luck with the training

[T4RG4]

Thank you all for the input thus far. I feel suitably prepared for the next step of investigation!

As for the potential tax implications - this is in the hands of my employer but I'm always interested in learning a little more.

[Checklist Charlie]

My simple mind sees no difference between your employer sending you on a PPL course, a computer course, a (god forbid) MBA course or even a tiddly winks course. For that matter any 'in-house' courses fit into the same pot.

As a course is designed to assist employees to contribute to the fortunes of the employer and therefore directly related to their employment it is A/a tax deduction (expence)for the employer B/ for the ultimate benefit of the employer and C/ nobody else's business.
Like I said, I have a simple mind.

CC

[homonculus]

Checklist Charlie I take it you are not an accountant. I suggest you re read 150 Driver's post - he has actually answered the question and put the nail in the coffin if you read it carefully.

[Whopity]

Once upon a time the CAA payed for training for staff members and got the VAT back.

[late-joiner]

150 Driver is right that here is not the best place to get financial/tax advice. It’s worth reading the actual legislation. It’s also worth reading the HMRC guidance, although keep an open mind because it sometimes reflects what they hoped the legislation said rather than what it does say. In this sort of case, accountants regularly offer differing views on their accountingweb forum, and their differing views represent both differing knowledge of the detail and differing approaches to business and HMRC in terms of boldness vs risk aversion.

The definition of work related training is actually considered to be quite wide by HMRC.
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim01220

Ultimately your employer and their accountant need to agree the approach.

As a non-accountant I observe that we in the military trained people to drive cars, motor cycles, landrovers and trucks, and fly aircraft without it being considered BIK. And HMRC never did us any particular favours.

[clareprop]

150 Driver is right that here is not the best place to get financial/tax advice. It’s worth reading the actual legislation..
Sorry, I don't want to be rude but this is complete drivel!
If an employer wants to send someone on a training course of any type, then the employee just goes. Whether it's a driving course, sailing course, IT course, typing course or flying course matters not a jot to the employee.

[The Ancient Geek]

Yebbut a 2 week first aid course in the Bahamas would raise a few eyebrows at HMRC.

[Checklist Charlie]

Yes, thank you homonculusI did read it. Apparently things are seen differently in the UK, too different for a simple mind.

CC

[India Four Two]

Yebbut a 2 week first aid course in the Bahamas would raise a few eyebrows at HMRC.

I'm reminded of a geological field course called Modern Carbonates. The participants spent a week in a resort in the Bahamas. The course days included lectures and trips in a chartered Goose. The Goose would land in various locations where the group would dive in and snorkel through reefs and lagoons, looking at the sediments.

The advertising included a suggestion that participants who were not experienced snorkelers, should come a week early to practice!

Unfortunately I never had the opportunity to go on this course. :(

T4RG4,

Don't hesitate to take up this marvelous offer from your employer. Keep us posted on how your training goes.

[late-joiner]

Sorry, I don't want to be rude but this is complete drivel!
If an employer wants to send someone on a training course of any type, then the employee just goes. .......

Oh but life were so simple. Even after the employee ‘just goes’, the employer has to decide:
- whether the company is paying its own liability or a pecuniary liability of the employee;
- whether the training costs are deducible against corporation tax;
- whether the company can claim input VAT;
- whether any Class 1 or Class 1a NIC is payable.

And if the company is a close company or the individuals involved are connected persons are the answers the same?

Different accountants do seem to approach these issues differently. If that is drivel, so be it.

Edit: Looking back at the original question, if the employer is offering, just go for it. Make sure the invoice for the training is in their name.

[Steve6443]

What an arrogant, pointless and aggressive response to a genuine question from a new poster.


Sorry, I don't view his question as 'arrogant, pointless and aggressive' - after all, there has been too much bull**** spread around about what the implications are of a PPL having others pay for his flight and the comment was, as I understood it, merely along the lines of

tell us how you perceive these rules to be and then we can see if your understanding is correct.

In fact, in terms of pointless and arrogant answers, yours appears to top the lot.

So I'll rephrase the question to the OP:

Could you perhaps please explain how you view the implications of flying, as a PPL, with someone else paying / contributing to the costs? Then we can discuss whether you've heard the right info or just gossip.

In my eyes, nothing is worse than going into a venture with totally inaccurate information or half truths....

Coming back to the topic and addressing T4RG4, the taxman would infer that the PPL could be used for private purposes and is therefore a 'benefit in kind' hence liable for tax. As others have said, I would suggest having a tax expert looking at either

1) impact of employer paying and amount of tax / NI due

or

2) possibility of having an increased salary but see if HMRC would recognise PPL as a legitimate expense in order to improve your working qualifications. In this case, you'd pay for the PPL yourself but be able to deduct a certain amount against your tax bill

and then go with the one which is most beneficial for you. But even if the only way forward is for the employer to pay for the PPL, I'd definitely take the offer, go for the PPL and enjoy!