Self Employed FIs - Advice Needed
Thread Starter
Join Date: May 2003
Location: UK
Posts: 13
Likes: 0
Received 0 Likes
on
0 Posts
Self Employed FIs - Advice Needed
Hi,
I am thinking of doing an FI rating so that I can work as a FI on a part time basis on weekends. Unfortunately, I can’t afford to give up the ‘day job’ that pays all the bills.
I have had a chat with a local flying school who indicated that all their instructors are treated as ‘self-employed’ and invoice the flight school for hours worked on a periodic basis.
If I were to do this also, would I be able to offset the income from working as an FI against the costs incurred?
I am thinking of things such as the costs of doing the FI course initially as well as the ongoing costs of travel to the flying school, medicals, etc.
Also, could any profits/losses arising from this part time job be applied against my 'day job' income?
I suspect that I probably need professional advice on this and wondered if anyone else has been through this process and whether they can recommend any accountants who could assist me.
Thanks
I am thinking of doing an FI rating so that I can work as a FI on a part time basis on weekends. Unfortunately, I can’t afford to give up the ‘day job’ that pays all the bills.
I have had a chat with a local flying school who indicated that all their instructors are treated as ‘self-employed’ and invoice the flight school for hours worked on a periodic basis.
If I were to do this also, would I be able to offset the income from working as an FI against the costs incurred?
I am thinking of things such as the costs of doing the FI course initially as well as the ongoing costs of travel to the flying school, medicals, etc.
Also, could any profits/losses arising from this part time job be applied against my 'day job' income?
I suspect that I probably need professional advice on this and wondered if anyone else has been through this process and whether they can recommend any accountants who could assist me.
Thanks
Absolutely you can. I put in a tax return, and claim for LPCs, medicals, travel to/from flying, and sundries like charts etc.
Make sure you keep receipts - and HMRC also has a specific group of people dealing with the self-employed, who are most ready to help you out.
Make sure you keep receipts - and HMRC also has a specific group of people dealing with the self-employed, who are most ready to help you out.
Thread Starter
Join Date: May 2003
Location: UK
Posts: 13
Likes: 0
Received 0 Likes
on
0 Posts
Thanks for the responses so far.
Do I need to do anything in specific in setting up as 'self employed' - registering as a company, etc? Or, is it simply a case of collecting all expense receipts and invoices and declaring the profit/loss arising in that tax year them on the annual tax return?
If I need to set up a compnay or regsiter with someone - has anyone used an accountant who is familiar with how FI's and flying schools work and can sort out all the administration?
Do I need to do anything in specific in setting up as 'self employed' - registering as a company, etc? Or, is it simply a case of collecting all expense receipts and invoices and declaring the profit/loss arising in that tax year them on the annual tax return?
If I need to set up a compnay or regsiter with someone - has anyone used an accountant who is familiar with how FI's and flying schools work and can sort out all the administration?
Join Date: Jul 2007
Location: Berkshire
Posts: 116
Likes: 0
Received 0 Likes
on
0 Posts
I would assume you would need to be a LTD company - better for liability in case it all goes wrong - this is not strictly self employed.
I assume you could probably claim back (offset) - the course fees for the FI too - alwasy a technical aspect this - but i assume after the CPL you can work for pay - and as FI is just an "expansion" of this ie: next level on a paid career - I assume HMRC would allow this....(as oppose to you cannot claim for your PPL after which you still do not have a business !)
...but someone hopefully more knowledgeable than me will confirm !!
Hopefully Whirlygig will be along shortly - having contributed to threads such as these before with some great insight and knowledge (i think they are a chartered accountant !)
I assume you could probably claim back (offset) - the course fees for the FI too - alwasy a technical aspect this - but i assume after the CPL you can work for pay - and as FI is just an "expansion" of this ie: next level on a paid career - I assume HMRC would allow this....(as oppose to you cannot claim for your PPL after which you still do not have a business !)
...but someone hopefully more knowledgeable than me will confirm !!
Hopefully Whirlygig will be along shortly - having contributed to threads such as these before with some great insight and knowledge (i think they are a chartered accountant !)
Last edited by Need money; 10th Sep 2007 at 12:35.
Join Date: Feb 2000
Location: UK
Posts: 789
Likes: 0
Received 0 Likes
on
0 Posts
Despite what most people claim, most FIs are employees according to the HMRC:
(I think the last one's great - if the student doesn't do well in PFLs, you take him home for the weekend, and keep on going until he gets it!)
HMRC give a good overview to self employment here
I think the worst case that will happen if you think that you are self-employed and HMRC decide that you are not, is that you will not be able to offset costs (other than the industry agreed amount of £950) and the flying club will have to pay your PAYE and employers NI.
In reality you'll probably get away with it, but if they do decide to investigate it is an extra hassle to worry about (known from experience!)
Throws open for discussion!!
Employed or self-employed?
Employee
If you can answer 'Yes' to all of the following questions, you are probably an employee.
* Do you have to do the work yourself?
* Can someone tell you at any time what to do, where to carry out the work or when and how to do it?
* Do you work a set amount of hours?
* Can someone move you from task to task?
* Are you paid by the hour, week, or month?
* Can you get overtime pay or bonus payment?
Self-employed
If you can answer 'Yes' to all of the following questions, it will usually mean you are self-employed.
* Can you hire someone to do the work for you or engage helpers at your own expense?
* Do you risk your own money?
* Do you provide the main items of equipment you need to do your job, not just the small tools many employees provide for themselves?
* Do you agree to do a job for a fixed price regardless of how long the job may take?
* Can you decide what work to do, how and when to do the work and where to provide the services?
* Do you regularly work for a number of different people?
* Do you have to correct unsatisfactory work in your own time and at your own expense?
Employee
If you can answer 'Yes' to all of the following questions, you are probably an employee.
* Do you have to do the work yourself?
* Can someone tell you at any time what to do, where to carry out the work or when and how to do it?
* Do you work a set amount of hours?
* Can someone move you from task to task?
* Are you paid by the hour, week, or month?
* Can you get overtime pay or bonus payment?
Self-employed
If you can answer 'Yes' to all of the following questions, it will usually mean you are self-employed.
* Can you hire someone to do the work for you or engage helpers at your own expense?
* Do you risk your own money?
* Do you provide the main items of equipment you need to do your job, not just the small tools many employees provide for themselves?
* Do you agree to do a job for a fixed price regardless of how long the job may take?
* Can you decide what work to do, how and when to do the work and where to provide the services?
* Do you regularly work for a number of different people?
* Do you have to correct unsatisfactory work in your own time and at your own expense?
HMRC give a good overview to self employment here
I think the worst case that will happen if you think that you are self-employed and HMRC decide that you are not, is that you will not be able to offset costs (other than the industry agreed amount of £950) and the flying club will have to pay your PAYE and employers NI.
In reality you'll probably get away with it, but if they do decide to investigate it is an extra hassle to worry about (known from experience!)
Throws open for discussion!!
Last edited by A Very Civil Pilot; 10th Sep 2007 at 23:32. Reason: spelling (again)
Join Date: Sep 2004
Location: Down at the sharp pointy end, where all the weather is made.
Age: 74
Posts: 1,684
Likes: 0
Received 3 Likes
on
3 Posts
Accountant advice
I formed a Limited Company to offer aviation related training when I left full-time employment in March.
My accountant who helped me set this up advised that the cost of the FI course would most probably be able to be set against tax and I've kept all the associated reciepts. The accountancy firm have set up a paye and NI arrangement for me so that I can still buy a stamp etc. This applies to the first £5k or so of earnings, the rest is drawn as director's fees. Actually, everything I've earned so far has been absorbed by set-up costs and waiting for creditors to pay up etc.
I've just been taken on at a large school as a FI(R) on the basis that I'm self-employed and plan to submit invoices to them. I understand they have one or two other people doing this, though most are on paye. I consider this legitimate as this won't be my only source of income and I'm working when I choose to, not a set number of hours a week.
I think it would be a bit unrealistic for us all to buy an a/c each to do training on though I am aware of at least one-person (!) band who does this. I have bought all my own equipment, uniform, headset, whiteboard markers, laptop projector etc.
I can't say I can particularly recommend my accountant as I was the first and only Instructor he's come across. Perhaps this time next year, whan a set of accounts has been prepared and submitted to HMRC, we'll have more experience.
There are considerable costs and risks associated with setting up a Ltd company as opposed to being an empoyee, which is reflected by the Treasury choosing to charge a lower tax rate than employees, to encourage more of us to become entrepreneurs. The figures for me at the moment for the first year of trading at least are that I'll make a loss, with loans to my company from the family budget (i.e. overdraft on the joint account!) I can only hope it gets better next year! Unlikely if I just rely on FI income, 5 days a week. I used to earn more from just one Saturday night shift overtime.
Don't forget, no flying, no income! Self-employed people are the healthiest in the country.
Cheers,
The Odd One
My accountant who helped me set this up advised that the cost of the FI course would most probably be able to be set against tax and I've kept all the associated reciepts. The accountancy firm have set up a paye and NI arrangement for me so that I can still buy a stamp etc. This applies to the first £5k or so of earnings, the rest is drawn as director's fees. Actually, everything I've earned so far has been absorbed by set-up costs and waiting for creditors to pay up etc.
I've just been taken on at a large school as a FI(R) on the basis that I'm self-employed and plan to submit invoices to them. I understand they have one or two other people doing this, though most are on paye. I consider this legitimate as this won't be my only source of income and I'm working when I choose to, not a set number of hours a week.
I think it would be a bit unrealistic for us all to buy an a/c each to do training on though I am aware of at least one-person (!) band who does this. I have bought all my own equipment, uniform, headset, whiteboard markers, laptop projector etc.
I can't say I can particularly recommend my accountant as I was the first and only Instructor he's come across. Perhaps this time next year, whan a set of accounts has been prepared and submitted to HMRC, we'll have more experience.
There are considerable costs and risks associated with setting up a Ltd company as opposed to being an empoyee, which is reflected by the Treasury choosing to charge a lower tax rate than employees, to encourage more of us to become entrepreneurs. The figures for me at the moment for the first year of trading at least are that I'll make a loss, with loans to my company from the family budget (i.e. overdraft on the joint account!) I can only hope it gets better next year! Unlikely if I just rely on FI income, 5 days a week. I used to earn more from just one Saturday night shift overtime.
Don't forget, no flying, no income! Self-employed people are the healthiest in the country.
Cheers,
The Odd One
Join Date: Sep 2002
Location: Spain
Age: 61
Posts: 124
Likes: 0
Received 0 Likes
on
0 Posts
I had a issue with the flight school I used to instruct at.
Now for legal reasons I can't say to much.
However what I can say is don't be taken for a ride. The instructor market in eurpoe at the moment is in a real bad way. schools can't get instructors, there is talk of 'short-cut licence ' to teach nppl's. This is not going to happen.
Most schools take you on as self employed , they may even get you to sign a contract ( not worth the paper it is written on ) the law states that if your employer provides the main tools ( aircraft ) and the customers ( students ) then you are deemed a 'worker' as a 'worker' you have all the stat rights of an employee. i.e. holiday pay, sick pay and the likes. Check it out with a employment law firm. I was paid off not to give details so I won't.
Now for legal reasons I can't say to much.
However what I can say is don't be taken for a ride. The instructor market in eurpoe at the moment is in a real bad way. schools can't get instructors, there is talk of 'short-cut licence ' to teach nppl's. This is not going to happen.
Most schools take you on as self employed , they may even get you to sign a contract ( not worth the paper it is written on ) the law states that if your employer provides the main tools ( aircraft ) and the customers ( students ) then you are deemed a 'worker' as a 'worker' you have all the stat rights of an employee. i.e. holiday pay, sick pay and the likes. Check it out with a employment law firm. I was paid off not to give details so I won't.
Thread Starter
Join Date: May 2003
Location: UK
Posts: 13
Likes: 0
Received 0 Likes
on
0 Posts
As no specific accountant has been recommended, I think I'll have a chat with the existing FI's at the school to see whose services they use and whether they think they are any good.
Thanks for the all responses.
Thanks for the all responses.
