Per diem advise

[starshiptrooper]

Dear All,

This is a more pilot general question but applies to biz jet/airline pilots mostly. Thankyou for your advanced help.

What are the UK tax rules on per diems ? i.e are they subject to tax, do you need a special dispensation from the tax office ?

Does this make a difference if you are employed, self employed, work for your own company for an airline/private operator/owner ?

Accountants can be expensive so hoping someone can give me some free advise out there !!!

Many thanks in advance

Regards

SST

[cldrvr]

Yes, you need a dispensation (for tax free per diem)

[Bucket]

My understanding is that they are taxed (I am employed).

[specialbrew]

Tax free but figure must be agreed with local tax office.

[cldrvr]

Bucket,

Your company can get a dispensation from the local tax office to pay you all or part of your per diem tax free. Only fair as you use it to cover your expenses downroute.

HMRC recognises that paying income tax on your expenses is a bit extreme....

[pilotbear]

limit is £50 per day in UK tax free

[Chippie Chappie]

It depends what the per diem is for. The way I've seen it run is this:

Flight pay (part of your salary for each flight duty period) - Taxed
Subsistance pay for meals (say £15/day PLUS £35/overnight, total £50 for an overnight) - Tax free.

The tax free amount needs to be approved by your local tax office and if it's a new operation, HMRC may ask you for "evidence" of expenses down route so the crews collect all the receipts and submit them to show that the operation is legit.

Hope this helps,

Chips

[TFE731]

Pilotbear, your figures might be a little out of date. We had £65 per day tax-free approved last year. We had to fight for it but we won in the end.

TFE731

[pilotbear]

Yes I know but that is an exception at the moment

[BizJetJockey]

Tax advice

My apologies for hi-jacking the post but i thought it seemed relevant.

Does anyone know how to clearly explain the tax situation with reference to being an expat pilot working a 35on/30off roster?

i.e being in the UK for the 30 days i have off after every 35. Renting and residing in my flat when i'm back in the UK and getting my salary paid into a UK bank account.

Do i still have to pay UK tax because i return back to the UK or am i exempt from paying tax if i make sure i'm out of the UK for more than 180 days a year?

Is it better to have an off-sure account etc etc.

And what about National insurance?

It's all rather confusing!

Thanks

[Chippie Chappie]

BJJ

Best check with HMRC (try the website) but last time I looked at it, it was max 180 days/year but averaged to max 91 days/year over 4 years. i.e. If you stayed in the for 180 days for the first 2 years, you couldn't stay in the UK at all for the following 2.

Off shore account could work but if you have a presence the UK, HMRC might take exception.

Hope this helped but your best bet is to contact a Independent Financial Advisor.

Back to the topic

Chips

[BizJetJockey]

Cheers!!!

Back to the topic indeed!

[DUAL RATED]

Bizjetjockey
google IR20 and have a good read. plus hmrc p85 form which is what you need to send off when you change your residence.

[BizJetJockey]

Thanks for that Dual!!!