Tax free salary - for repayment of training costs?

[BLUEBARON]

Hears an interesting thought.

If i spend, say 25,000pounds (no pound sign) on a CPL/IR and then get a job can i offset that against my wages as training costs?

I know the answer is probably no but consider this.....

I set myself up as a limited company and invest the said 25,000 in the company to train myself. I then get a job (on contract)and my employer pay's the money into my company account. I then draw wages from that account and deduct training costs before tax.

Does that make sense?

Comments please??!!

[foghorn]

Blue Baron,

I've given this one a great deal of thought meself and talked to a few accountants about it.

First question, no, our wonderful government will not let you offset professional training against personal income tax (which is disgusting and bad for the country IMHO).

There are several problems with the Limited Company route:

1. When you set the company up it will have zero cashflow. Banks won't want to lend a non-earning company a bean so you'll have no cash to fund your training. Intentionally running a company at a loss is fraudulent.

2. Getting a job on contract with anything less than several thousand hours turbine command time and a type rating is not easy

3. The new IR35 tax. If you do work as a self-empoyed person and that work 'has the characteristics of employment', you can't claim business expenses and training. I think that contract pilots will be caught by IR35

You could probably get round 1. by making dosh for the company by, say, IT contracting, but you then have to convince the Inland Revenue that pilot training will 'increase the company's earning potential' - very difficult given 2. This is what I discussed with several accountants and they all advised me not to do it as the Revenue would be very suspicious.

cheers!
foggy.