Freelance pilot the facts
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Freelance pilot the facts
I am looking for any information about doing freelance activity as pilot in Own name "self employed", regarding Tax imposition,Tax deduction, Social security and insurances.
Or doing it as "black work"
Or doing it as "black work"
Under which country's tax rules?
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under which country's rules
It seems after taking advise, that the process to become self-employed is a real battle if having let say 2 different flight providers, is not enough of a risk to be considered as a real self employed pilot.
Which means no tax deduction for the recurrent or medical check for example...
What can you tell me about your experience despite the fact that each country has is own rules and differences.
Thanks for any advice!
Last edited by airmen; 3rd Mar 2009 at 06:12.
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I can only speak under UK tax rules, but you might find they are similar to your own.
Self employment can be tricky if you only work for one company, as you are not really generating your own employment (I think it was called IR35 restrictions and it caught many plumbers and electricians who said they were self employed but who worked solely for a house-building company, for example).
I run a limited company with one other person, and that company invoices the companies for whom I fly for my time as a pilot. This allows me to run a profit and loss account, including paying myself if need be. Any profit comes under corporation tax rules (10% on any profit), and any personal income tax as appropriate. The aircraft owners like it because they simply pay the gross invoice and there is no PAYE or other issues to be concerned with.
Self employment can be tricky if you only work for one company, as you are not really generating your own employment (I think it was called IR35 restrictions and it caught many plumbers and electricians who said they were self employed but who worked solely for a house-building company, for example).
I run a limited company with one other person, and that company invoices the companies for whom I fly for my time as a pilot. This allows me to run a profit and loss account, including paying myself if need be. Any profit comes under corporation tax rules (10% on any profit), and any personal income tax as appropriate. The aircraft owners like it because they simply pay the gross invoice and there is no PAYE or other issues to be concerned with.
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Hello,
Eyeinthesky's answer makes a lot of sense.
If you are based in GVA you can start a SARL "Société à Responsabilité Limitée". All it requires is CHF 10'000.- capital on the day the company is founded. You get them back, less tax and notary fees which amount to a total of about CHF 2'500.-.
You are then en employee of the SARL. You decide which salary the company pays you, get to deduct your legitimate cost of doing business etc... And for the aircraft owner's it is clear as well.
Good luck
Eyeinthesky's answer makes a lot of sense.
If you are based in GVA you can start a SARL "Société à Responsabilité Limitée". All it requires is CHF 10'000.- capital on the day the company is founded. You get them back, less tax and notary fees which amount to a total of about CHF 2'500.-.
You are then en employee of the SARL. You decide which salary the company pays you, get to deduct your legitimate cost of doing business etc... And for the aircraft owner's it is clear as well.
Good luck
Sorry, been busy...
I've been freelance for 20 years now, and frankly I wouldn't have it any other way - I make far too much to consider working full-time for any one company. (Those that know me will remember that I had a lovely Rolls, even as a Co-jo).
I know nowt about France or Switzerland but in the UK, as eyeinthesky says, you need more than one source or you will likely become a sub-contractor - which you *really* don't want. I've never been a LTD though it does have its advantages - whatever you do, register for VAT!
If it works for you, you'll have the time of your life - if you prefer to know what will be in your bank at the end of any given month, it prolly won't. Then again, in these uncertain times, who knows what will be?
Either way, good luck to you and I hope the den'gi roll in!!
I've been freelance for 20 years now, and frankly I wouldn't have it any other way - I make far too much to consider working full-time for any one company. (Those that know me will remember that I had a lovely Rolls, even as a Co-jo).
I know nowt about France or Switzerland but in the UK, as eyeinthesky says, you need more than one source or you will likely become a sub-contractor - which you *really* don't want. I've never been a LTD though it does have its advantages - whatever you do, register for VAT!
If it works for you, you'll have the time of your life - if you prefer to know what will be in your bank at the end of any given month, it prolly won't. Then again, in these uncertain times, who knows what will be?
Either way, good luck to you and I hope the den'gi roll in!!
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Sepp, pascualito and eyeinthesky, thank you for your kind advise.
I see the problem coming from the fiscal side, as the state (Swiss) will decide if I am really a self employed person or not, as said according the IR35 which is also existing here on a similar way.
Right now, I have only two jobs provider, which is not enough for the state to be considered self employed, but rather subcontractor...
Any inputs here from you guys on the number of employers required?
Does anybody have an insight from the french side?
Thank you guys!
I see the problem coming from the fiscal side, as the state (Swiss) will decide if I am really a self employed person or not, as said according the IR35 which is also existing here on a similar way.
Right now, I have only two jobs provider, which is not enough for the state to be considered self employed, but rather subcontractor...
Any inputs here from you guys on the number of employers required?
Does anybody have an insight from the french side?
Thank you guys!
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Sepp,
I'm probably being thick, but why is being labelled a sub contractor by the Revenue so bad? Not being provocative, just ignorant
oap
I'm probably being thick, but why is being labelled a sub contractor by the Revenue so bad? Not being provocative, just ignorant
oap
A caveat: I'm not a legal or accounting professional! Statements reflect my own experiences in the UK - as in all the best ads "your experience may differ"
oapilot - np, mate, we're all on the same side! Basically you want to keep your relationship to your customer(s) at the longest arm's length you can manage. You wouldn't want your examining officer to decide that you're a sub-contractor and to then read in the guides that "In all practical aspects their work is like that of an employed earner and they have no business which could be said to be ongoing when they have no work. " In other words "not self-employed" and we know what that means, yes? Far better for the officer to think of you as an "independent contractor", I think.
airmen - it's not just the number that's important (here, at least) it's also how you engage with the customer. Are you bonded? If so it might well be thought that you do not have control over who (whom? was never good at English...) you work for, so you're an employee. Are you on a roster? If so, it could be said that you do not have control over when you work (or indeed for whom) Employee again. If customer 'A' prohibits you from working for other customers at the same airfield, it might fairly be said that you do not have control over where (or again, for whom) you work - employee once more.
Basically, at some stage you're likely to have to justify your self-employed status to an inspector. It is much easier to do this if you can demonstrate a range of customers, and at least some instances of your having declined to work - or even having said "I won't be available at all during .......", as you're taking the risk of losing work and dictating the 'who' and 'when' elements. 'Where' is difficult, because it generally has to be where the aircraft is! I suppose you could always say "don't ring me for a flight from XXXX, because I'm not driving all the way down there".
Phew. I'm off for a curry - phone calls will go unanswered tonight - and tomorrow for that matter.
Cheers!
oapilot - np, mate, we're all on the same side! Basically you want to keep your relationship to your customer(s) at the longest arm's length you can manage. You wouldn't want your examining officer to decide that you're a sub-contractor and to then read in the guides that "In all practical aspects their work is like that of an employed earner and they have no business which could be said to be ongoing when they have no work. " In other words "not self-employed" and we know what that means, yes? Far better for the officer to think of you as an "independent contractor", I think.
airmen - it's not just the number that's important (here, at least) it's also how you engage with the customer. Are you bonded? If so it might well be thought that you do not have control over who (whom? was never good at English...) you work for, so you're an employee. Are you on a roster? If so, it could be said that you do not have control over when you work (or indeed for whom) Employee again. If customer 'A' prohibits you from working for other customers at the same airfield, it might fairly be said that you do not have control over where (or again, for whom) you work - employee once more.
Basically, at some stage you're likely to have to justify your self-employed status to an inspector. It is much easier to do this if you can demonstrate a range of customers, and at least some instances of your having declined to work - or even having said "I won't be available at all during .......", as you're taking the risk of losing work and dictating the 'who' and 'when' elements. 'Where' is difficult, because it generally has to be where the aircraft is! I suppose you could always say "don't ring me for a flight from XXXX, because I'm not driving all the way down there".
Phew. I'm off for a curry - phone calls will go unanswered tonight - and tomorrow for that matter.
Cheers!
