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grey area (in my knowledge at least!)

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Old 25th January 2007 | 08:32
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From: somewhere in the middle!!
grey area (in my knowledge at least!)

Just a quick question. If I had a PPL could I use it for business travel? I’m thinking of replacing the normal airline/eurostar trips to Paris or Brussels that I do with something a bit more fun. Obviously the company would be paying for the costs (i.e. as an business expense, and I wouldn’t be flying for reward), but I’m not sure whether this is allowed with a PPL, or whether a CPL would be needed.

Thanks

Fritz
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Old 25th January 2007 | 08:47
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From: Propping up bars in the Lands of D H Lawrence and Bishop Bonner
Depends on whether you're an employee, a director of your own company or self-employed.

If you can persuade your employer (and you're not a director) that it's more cost effective for you to fly rather than drive and they reimburse your costs (say SFH at £100 per hour), then the worst that can happen is that you pay tax on this £100 through your P11D.

If you're a director or self-employed, then it gets a little more sticky and depends on a number of factors e.g. is your business aviation, does it work out to be cost effective etc?

Cheers

Whirls
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Old 25th January 2007 | 09:33
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Time to spare, Fritz, go by air.

Don't do this unless you are really passionate and fired by flying. It will be enormous hassle and expensive to set yourself up to do this safely in a fashion that will mostly allow you to beat the North European weather.

It's a major commitment which risks killing you if you don't take it very seriously indeed.

Of course, it's fun too, but only after a lot of expensive, hasslesome hard graft.
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Old 25th January 2007 | 09:54
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From: EuroGA.org
If you can persuade your employer (and you're not a director) that it's more cost effective for you to fly rather than drive and they reimburse your costs (say SFH at £100 per hour), then the worst that can happen is that you pay tax on this £100 through your P11D.

Do you have a reference for the above in the tax legislation, Whirlygig?

There is no requirement for anybody to travel using the most cost effective route. if there was, we would all have to hitch-hike, and nobody could travel first class, etc. The exceptions to this are the ludicrous e.g. travelling to a customer using a hot-air baloon.

A PPL can fly on the business of his employer. The pilot can have the entire cost of the plane+flight reimbursed by the employer (not just "direct costs" - that is the CAA PPL Cost Sharing concession from Aerial Work and is not relevant here) and that is OK with both the ANO and HMRC.

If the PPL owns the plane personally, he is entitled to claim from his employer the pro-rata cost of business flying, of the total cost. Let's say the plane cost him £10,000 in the year and 30% of his airborne time was on business flights, then he can claim £3,000 from his employer.

Many pilots opt for the simpler route of claiming 60p/mile or some such figure; occassionally some have agreed a higher rate. I know of one who IIRC was claiming an agreed rate of £1.50/mile. This was on a spamcan; obviously a TBM850 would be more.

If the pilot doesn't own the plane, the company can provide the plane (owns it, rents it in, etc) and provide it to the pilot free of charge (he pays nothing).

In the above case, especially where the company has bought the plane, the crucial thing is that the pilot doesn't have access to the plane for private flying; if he has access (even if he doesn't actually do any private flying) then he is exposed to Benefit in Kind and that can be a killer. Various defences to BIK do exist but if your local HMRC inspector is a b*stard and decides to make your life a misery then all you can do is take it to General Commissioners (with a tax barrister costing some £10,000) or throw them a similar sum to make them move on to their next easy target (I have just done the latter; this is how HMRC prefer to operate these days, with anything involving yachts, planes, and racehorses). The whole area of BIK is complicated and lots of people have done private deals with their local inspector (e.g. 75% business flying) which they obviously won't advertise on pprune...

IMHO the only "sure" defence against BIK is to (a) have an employment contract which bans the use of the plane for private flying and (b) not actually do any private flying. That is how it works in a typical big corporate operator, otherwise everybody including the tea lady would get done for BIK.

As a result, the best way IMHO of flying on business is one of

(a) The firm owns the plane and all flying is 100% business (with careful logs kept of course), OR

(b) The pilot owns the plane himself and charges his employer as described above (pro rata or mileage based

A requirement in the ANO is that the pilot is not contractually required to fly. He must have the option of taking a train, etc. Otherwise, he needs a CPL.

As cjboy says, an IR is a must for general business flying around Europe - unless you just visit "friendly" customers who don't really care when you turn up, e.g. your own European distributors.
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Old 25th January 2007 | 09:58
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From: Propping up bars in the Lands of D H Lawrence and Bishop Bonner
No I don't have a reference have for it; I have experience.

Most employers (not the tax man necessarily) may well react along the lines "No Way Jose" when asked if they would reimburse the cost of Self Fly Hire; mine did when I tried it!! That is why I said cost-effective - to the employer, the boss, the head honcho, the one who writes the cheque!

I am not arguing with you again.

Cheers

Whirls
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Old 25th January 2007 | 10:02
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It is not that difficult. The detractors are usually the DAY/VFR only flyers with a map and stop watch.

I manage to amass a lot of hours each year doing just that. I claim expenses for the flight in the form of milage and landing fees just the same as I would claim for driving and parking.

VFR you will be very limited but even then I managed 80% of my trips. With an IR I manage 95% of my planned trips and at worst have to delay a few days before doing them.

You would need a properly equipped aircraft with GOOD avionics not the flying school hacks that nothing works in. You need to be very current and confident in your ability (not over confident!). The sort of level I refer to is getting in the aircraft and flying anywhere with same sense of ease as doing the trip by car. There are many of us on here who use our aicraft in this way. IO, CJBoy, Timothy etc.
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Old 25th January 2007 | 10:03
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Whirlygig - Yes, but what the employer thinks of it is a separate issue. Lots of big companies ban private flying on company business, for insurance/liability reasons.

Arguing with me again? I thought we discussed it pretty amicably last time I think I got done for BIK rather more recently than you, and I am happy to pass on what I learnt so others can benefit.

Bose-x - I agree 100% but I think your 80% figure is possible because you are a competent instrument pilot, so you automatically fly as if IFR all the time. An instrument-capable pilot can fly "VFR" an awful lot more than a basic PPL.
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Old 25th January 2007 | 12:18
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Originally Posted by IO540
Bose-x - I agree 100% but I think your 80% figure is possible because you are a competent instrument pilot, so you automatically fly as if IFR all the time. An instrument-capable pilot can fly "VFR" an awful lot more than a basic PPL.
I think you're spot on there!

A VFR only pilot will not be happy flying at the extremes of VFR privlidiges. They just don't have the experience to do so.

An IFR pilot will probably be happy to fly VFR in the more marginal weather, knowing that they have the skills and options to safe themselves if needed.

dp
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Old 25th January 2007 | 13:09
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From: somewhere in the middle!!
Thanks for all the replies guys.

It looks like it's legally possible at least (i.e. within the restrictions of the PPL), but yes I do accept the advice about needing to be highly confident to regularly do such a trip, and probably with an IR of some kind.

Actually, would this only cover me to be in the plane? or would passengers be allowed? maybe that's pushing it too far?

Yes the tax implications are a good point but it really would be a genuine alternative (cost wise) to taking a regular flight for these shorter European routes. I work for a company and I'm not a director so I was hoping it would be the same as just paying for a rental car, or booking a flight etc. I certainly wouldn't be doing any extra "private" flying and hence I don't see it as a BIK, although I guess this would have to be agreed with the tax man first.

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Old 25th January 2007 | 13:10
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Good point. The point I was making is that it is perfectly possible to do if you have the right experiance and aircraft.
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Old 25th January 2007 | 13:23
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Business use - IR is a must

An IR is a must for serious business use. I have flown to/from work every day this week.

Yesterday evening I left work at 7.00pm in Gloucester.
7.23pm I was sitting in my Mooney with the engine running.
7.29pm I was retracting the gear climbing out into the dark.
37 mins and 2 light snow showers later (-9C at FL60 but little ice accumulation) I was on final approach to Plymouth.
Mooney safely in the hangar I had a 6 minute trip home in my R44.
PCL activated at 3.5 miles lighting up the helipad like a christmas tree and R44 back into hangar/barn for the night.

I reckon on 90-95% success rate for business use fixed wing with a deiced A/C and an IR.

The helicopter is far more versatile at getting you to the exact point you want to be at (and much more tolerant of strong winds) but slower and more limited by poor weather/night.

Yes, it costs a fortune but... I can't think of anything better to spend my money on.


SB
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Old 25th January 2007 | 14:20
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From: Propping up bars in the Lands of D H Lawrence and Bishop Bonner
but slower and more limited by poor weather/night.
Slower granted but limited by poor weather? Helicopters can fly in lower visibility than fixed wing!

WR, you're quite right for car mileage; those are the rates but I remain to be convinced that HMR&C would accept those rates for an aircraft! I don't know; I've never tried it!

Cheers

Whirls
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Old 25th January 2007 | 14:27
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would this only cover me to be in the plane? or would passengers be allowed?

I am not aware of any problem carrying goods or passengers on a PPL so long as all belong to your company. This is routinely done on a PPL, on both G-reg and N-reg.

The grey area is when you take up people not employed by your company, or goods in the same category. I don't know where the line would be drawn. Obviously you will always carry something not made by your company (e.g. your underpants) but if you started carrying a plane load of crates for an unconnected firm (even free of charge) then it might be illegal but I will leave it to better brains than me to work out the likely bits of the ANO.

There have been many prosecutions over the years but they tend to be over the carriage of paying passengers, which (for a PPL) is illegal for a whole bunch of reasons, and some cases were pretty provocative.

maybe that's pushing it too far?

Everything not expressly prohibited is 100% legal

I think you will be taxed as a BIK on anything over 40p/mile for the first 10,000 miles and then on anything over 25p/mile (IIRC) thereafter

Please supply a reference. Those figures are no more than HMRC business concessions for business travel in private cars which, if utilised, don't need to be declared on the tax return. If this were the end of it, nothing bigger than a microlight could ever be used for business flying.

I know for a fact that this is not the case; you can claim the full cost of the trip in the plane, just like you can claim the full cost of a 1st class ticket on a 747, or indeed the full cost of chartering a bizjet for the trip.

What you can't do is make a profit. This is illegal for a PPL, and HMRC would tax you on it anyway.

I know for a fact that there are several practicing accountants reading this forum and you bet I will be jumped on (with references) if I write some rubbish.
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Old 25th January 2007 | 16:15
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From: An island somewhere
Originally Posted by IO540
A PPL can fly on the business of his employer. The pilot can have the entire cost of the plane+flight reimbursed by the employer (not just "direct costs" - that is the CAA PPL Cost Sharing concession from Aerial Work and is not relevant here) and that is OK with both the ANO and HMRC.
Untrue, it's the 'recovery of direct costs' exception that's relevant, IO540. Article 161 of the ANO makes it clear (as does the April 2005 CAA paper 'Summary of the meaning of public transport and aerial work') that if the employer reimburses more than the direct costs in these circumstances, the flight is aerial work ... with all the attendant ramifications for licensing and airworthiness.
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Old 25th January 2007 | 16:52
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From: EGLL 270° 4DME
Originally Posted by scooter boy
Yes, it costs a fortune but... I can't think of anything better to spend my money on.
SB
how about charity?
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Old 25th January 2007 | 18:04
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From: Sth Bucks UK
Originally Posted by Bandit650
how about charity?

How about me?
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Old 25th January 2007 | 18:19
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was hoping it would be the same as just paying for a rental car, or booking a flight etc.
One thing to bear in mind is your access to an aircraft.

If you purchase an aircraft yourself you obviously have all the access that you need, though the tax situation might be a little more complicated. The costs will also be higher, particularly if you aren't flying it much.

If you are renting the aircraft, you will likely need to book the aircraft well in advance (do you know well in advance when you are traveling?). Also, if you are traveling and staying there for a number of days, a rental organisation will likely require a minimum number of hours to be flown (or at least billed to you!). So renting early on a Monday morning, flying 2 hours into France, parking up on the ramp until Friday evening when you fly 2 hours back home again isn't likely to be acceptable to anyone renting an aircraft. You'd need to purchase one if that is your requirement.

dp
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Old 25th January 2007 | 18:55
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Blimey all the taxation experts!

I charge £1 per mile in expenses for my air travel. I charge the landing fees and parking fees as direct costs. I have not been a company director for quite awhile since selling my company. I am employed directly by a VERY large financial institution who pay my expenses and it was they who agreed the rates. When I fly to the USA which is every month I get a first class ticket, I get picked up from home in an S Class and returned home in the same way when I get back. When I fly around Europe commercial I get a business class ticket. When I drive my car I get the Revenue recomended rates.

As a "Senior Executive" I receive expenses according to my level. Flying my own aircraft for these trips should not be any different.

Bandit: As far as giving to charity over 50% of my income seems to go that way........
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Old 25th January 2007 | 19:51
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Islander2

There are several cases to consider:

a) The business owns the plane, or rents/leases it in. In this case there is no doubt that a PPL can fly on the company's business, free of charge, so long as not contractually required to fly. IOW the company simply provides the plane to the pilot to fly, if he so chooses. This one has been done to death many times. It is also common practice, both G-reg and N-reg.

b) The pilot rents/leases the plane from somebody, and flies in it on his employer's business. In this case, the "direct costs" is exactly 100% of what he is paying to the school/club/whatever, and every penny he is paying is recoverable from his employer. This is also clear, on G- reg and N-reg.

c) The pilot owns the plane. This one could be debated. As far as HMRC go, the owner/pilot can recover the business-flying proportion of his total costs as I mentioned above, without a hit on BIK. As far as the ANO goes, one would need to unravel article 161 and all its cross-references to other places, plus you'd need to understand the whole context of the ANO. I recall this being done somewhere recently and it turned out to be OK. It may also be OK in an N-reg. It is certainly common practice.

An important point here is that "direct costs" has never to my knowledge been defined. I have written to the CAA (saying that the expression should logically include everything that is proportional to airborne time, e.g. 50hr & 150hr checks, engine fund, prop fund) and while they avoided giving me a direct affirmative they did say that the cost of the Annual is excluded (which I agree with). Now, an element of the depreciation of the plane is also hours-related, and (unless you are flying something totally decrepit) this could amount to a sum which dwarfs some of the other costs and very effectively prevents the CAA arguing that the amount recovered exceeded the "direct costs"! If the ANO defined "direct costs" as say just fuel and landing fees (which so many forum inhabitants seem to think is the case) that would be something else, but it doesn't.

I am not aware of any recent prosecution (e.g. see this) on this subject, other than cases of arguably blatent public transport where (presumably) a nearby AOC holder got mightily miffed and reported the PPL to the CAA. I know that doesn't confirm legality but we could spend so much time debating why something "should be illegal"....
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Old 25th January 2007 | 20:19
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From: Brussels - Twin Comanche PA39 - KA C90B
Originally Posted by scooter boy
An IR is a must for serious business use. I have flown to/from work every day this week.

Yesterday evening I left work at 7.00pm in Gloucester.
7.23pm I was sitting in my Mooney with the engine running.
7.29pm I was retracting the gear climbing out into the dark.
37 mins and 2 light snow showers later (-9C at FL60 but little ice accumulation) I was on final approach to Plymouth.
Mooney safely in the hangar I had a 6 minute trip home in my R44.
PCL activated at 3.5 miles lighting up the helipad like a christmas tree and R44 back into hangar/barn for the night.

I reckon on 90-95% success rate for business use fixed wing with a deiced A/C and an IR.

The helicopter is far more versatile at getting you to the exact point you want to be at (and much more tolerant of strong winds) but slower and more limited by poor weather/night.
SB
I did not knew you also flew a R44!!! You are my hero!! :-)
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