Legality of employer covering PPL flight training costs?
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Legality of employer covering PPL flight training costs?
Hello PPRuNe!
Long time lurker. Finally registered as I am about to start my student->PPL training. Well, I thought I was about to.
Question: In recent weeks my employer has offered to cover my PPL training. Can they legally do so without me contributing?
Background
I'm fortunate enough to be working in software development, creating flight simulations. My current job has placed me deep into the world of aviation and I've come to absolutely love everything related to flying. Over the last few months I've been thinking about getting my license. It would certainly help me better appreciate this world and therefore help with the day job. Converting the theory of piloting aircraft into solid, practical experience. It would also give me a real sense of achievement and I'm incredibly excited about the whole thing!
I am aware of the shared cost stance once qualified as a private pilot but what is the deal when it comes to student flight training? Do I have to be training for a CPL in order to have them cover my costs? I cannot find any information on this and have reached out to the CAA but to be honest I'm not expecting a speedy response for little old me. Maybe there is something I've overlooked and you can point me to the correct source. Any guidance you might be able to offer would be most welcome.
Thanks.
Steve
Long time lurker. Finally registered as I am about to start my student->PPL training. Well, I thought I was about to.
Question: In recent weeks my employer has offered to cover my PPL training. Can they legally do so without me contributing?
Background
I'm fortunate enough to be working in software development, creating flight simulations. My current job has placed me deep into the world of aviation and I've come to absolutely love everything related to flying. Over the last few months I've been thinking about getting my license. It would certainly help me better appreciate this world and therefore help with the day job. Converting the theory of piloting aircraft into solid, practical experience. It would also give me a real sense of achievement and I'm incredibly excited about the whole thing!
I am aware of the shared cost stance once qualified as a private pilot but what is the deal when it comes to student flight training? Do I have to be training for a CPL in order to have them cover my costs? I cannot find any information on this and have reached out to the CAA but to be honest I'm not expecting a speedy response for little old me. Maybe there is something I've overlooked and you can point me to the correct source. Any guidance you might be able to offer would be most welcome.
Thanks.
Steve
Last edited by T4RG4; 18th Aug 2016 at 20:44.
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What should the employer possibly hinder to pay your further education? The employer may have discussion with tax authorities, but as you are into flight simulation programming, they most probably get it even accepted as ordinary operating expenditure and further education expense. But besides from the tax questions of your employer, nobody will care whose paying your training.
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Airpolice
Why shouldn't he be aware? He seems keen enough to find out all the rules.
Don't be so presumptuous.
As for the question.
Nothing in the rules to prevent someone paying for someone else's flight training.
I can't see what the taxman has to do with it either, your employer could call it salary, training expenses, whatever, but nothing to do with CAA rules.
If you take your employer as a passenger the cost must be shared, but that doesn't stop your employer giving you a brown envelope for Xmas!
Why shouldn't he be aware? He seems keen enough to find out all the rules.
Don't be so presumptuous.
As for the question.
Nothing in the rules to prevent someone paying for someone else's flight training.
I can't see what the taxman has to do with it either, your employer could call it salary, training expenses, whatever, but nothing to do with CAA rules.
If you take your employer as a passenger the cost must be shared, but that doesn't stop your employer giving you a brown envelope for Xmas!
I don't believe there is anything wrong with that in principle.
The reasons for your employer doing so would have a bearing on how it would be looked at by the tax man though. If it is deemed to be of assistance to your day job (by your employer), it could be argued that it is part of your development, ie a 'training course' funded by your employer. If however it is a perk, then that would be a taxable benefit.
The reasons for your employer doing so would have a bearing on how it would be looked at by the tax man though. If it is deemed to be of assistance to your day job (by your employer), it could be argued that it is part of your development, ie a 'training course' funded by your employer. If however it is a perk, then that would be a taxable benefit.
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First thing is the payment for training and I do not see any point against an employer paying this as whatsoever.
Second thing is what this is for the employers financial department, tax authorities and your wallet. This part is none of your business, as long as it is not called salary, in which case you may be eligible to pay income tax on benefit in money's worth.
Third thing I see a benefit for your work and an argument to have this declared further education. Depending on the tax clerk, this may hold or not, as it is an education "also suitable to be used for leisure". Probability is high you get through tax audit as part of business expenditure, if paid by the employer and labelled education. Probability is very low, if you try to pay yourself and later deduct from tax. CPL is different.
Forth thing is after obtaining the license and real flying afterwards. The field "what if" flying PPL in the grey areas of a commercial environment is a huge and in the end unresolved issue for many shades of the deed. Cost sharing is only one small issue in a complex framework of questions, like in which aircraft and when do you need an AOC - all unsolved issues and really, really, really juridical complicated.
Second thing is what this is for the employers financial department, tax authorities and your wallet. This part is none of your business, as long as it is not called salary, in which case you may be eligible to pay income tax on benefit in money's worth.
Third thing I see a benefit for your work and an argument to have this declared further education. Depending on the tax clerk, this may hold or not, as it is an education "also suitable to be used for leisure". Probability is high you get through tax audit as part of business expenditure, if paid by the employer and labelled education. Probability is very low, if you try to pay yourself and later deduct from tax. CPL is different.
Forth thing is after obtaining the license and real flying afterwards. The field "what if" flying PPL in the grey areas of a commercial environment is a huge and in the end unresolved issue for many shades of the deed. Cost sharing is only one small issue in a complex framework of questions, like in which aircraft and when do you need an AOC - all unsolved issues and really, really, really juridical complicated.
There is absolutely no problem with your employer paying for anything, but HMRC will consider this to be in lieu of salary and a benefit in kind unless your employer an demonstrate to them that this training is a necessary requirement for your employment duties. I very much doubt this will be the case.
Your employer will have to declare this on your P11D and you will have to declare it on your tax return. I would advise you to take independent tax advice. You may well get a significant tax bill that needs to be factored in. In some circumstances it can be better to increase your salary instead
Your employer will have to declare this on your P11D and you will have to declare it on your tax return. I would advise you to take independent tax advice. You may well get a significant tax bill that needs to be factored in. In some circumstances it can be better to increase your salary instead
I don't know the answer but I hope you manage to go ahead. Some flight simulator stuff was clearly invented by someone who's never been in a light aircraft (Saitek, I'm looking at you). Whatever f/s related work you're doing, I'm sure it will benefit greatly.
Last edited by abgd; 19th Aug 2016 at 04:03.
Spoon PPRuNerist & Mad Inistrator
As Homunculus has stated, there could be a tax (and possibly NI) liability:
https://www.gov.uk/expenses-and-bene...ments/overview
Unless you can demonstrate that it is Work-related Training, and your employer funds it or re-imburses you, in which case it may be exempt from tax and NI.
https://www.gov.uk/government/public...ursed-training
Training and course fees
I can't see that the CAA have any input into a purely financial arrangement between you, your employer (and the taxman).
SD
https://www.gov.uk/expenses-and-bene...ments/overview
Unless you can demonstrate that it is Work-related Training, and your employer funds it or re-imburses you, in which case it may be exempt from tax and NI.
"Work-related" includes any training course or other activity designed to impart, instil, improve or reinforce any knowledge, skills or personal qualities which are likely to prove useful or better qualify the employee to perform his job
Training and course fees
I can't see that the CAA have any input into a purely financial arrangement between you, your employer (and the taxman).
SD
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From CAA point of view, no problem. We often have training paid for by people other than the student (teenagers come to mind!)
From the flying school point of view, we might need to keep a record for money-laundering purposes if the total exceeds Euro15k or a series of transaction might lead to that or a few other things.
https://www.gov.uk/guidance/money-la...sponsibilities
For HMRC, then you are best to have a chat with an accountant, or look to a tax forum, rather than a flying one!
ps. There used to be a scheme where you saved tax on training for a CPL, the first part of which was gaining a PPL. Of course, many people stopped their CPL training shortly after completing their PPL ;-)
From the flying school point of view, we might need to keep a record for money-laundering purposes if the total exceeds Euro15k or a series of transaction might lead to that or a few other things.
https://www.gov.uk/guidance/money-la...sponsibilities
For HMRC, then you are best to have a chat with an accountant, or look to a tax forum, rather than a flying one!
ps. There used to be a scheme where you saved tax on training for a CPL, the first part of which was gaining a PPL. Of course, many people stopped their CPL training shortly after completing their PPL ;-)
Are you sure?
Tell us what you think the rules are.
Tell us what you think the rules are.
T4RG4 - just count your blessings and get on with it. If it's training as part of your job, the icing on the cake would be for the training organisation to invoice your employer direct.
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Could the PPL training be classed as "research" perhaps? Might be a better bet than education or further training, tax wise I mean. I suppose it depends on how you or your employer envision it being used/beneficial. For example if you are designing a flight sim which may incorporate a flight training element like Microsoft Flight Sim then you could certainly say it has research benefits!
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Effectively a company can pay for training (reinforcing, updating or a new skill) and it will be tax deductible for them and not a taxable benefit in kind for you. Does not work the same if you are a sole trader, but as an employee of a company it does work tax efficiently.
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Agree 100% with the interpretation above re the CAA rules - no issues as the rules are intended to prevent a PPL holder doing commercial work (i.e. being paid for flying) which you clearly aren't doing.
As for the tax position, as a PPL and a Chartered Accountant I have to laugh about the different interpretations above. Would you take as gospel the advice of an accountants' forum about flying law ? I will refrain from giving my view as I'm sure that many will know better
I suspect your employer has an accountant, get your employer to get advice from them on the position as to whether it is a benefit in kind or taxable through the payroll - it is primarily the responsibility of the employer to get right.
Good luck with the training
As for the tax position, as a PPL and a Chartered Accountant I have to laugh about the different interpretations above. Would you take as gospel the advice of an accountants' forum about flying law ? I will refrain from giving my view as I'm sure that many will know better
I suspect your employer has an accountant, get your employer to get advice from them on the position as to whether it is a benefit in kind or taxable through the payroll - it is primarily the responsibility of the employer to get right.
Good luck with the training
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Thank you all for the input thus far. I feel suitably prepared for the next step of investigation!
As for the potential tax implications - this is in the hands of my employer but I'm always interested in learning a little more.
As for the potential tax implications - this is in the hands of my employer but I'm always interested in learning a little more.
My simple mind sees no difference between your employer sending you on a PPL course, a computer course, a (god forbid) MBA course or even a tiddly winks course. For that matter any 'in-house' courses fit into the same pot.
As a course is designed to assist employees to contribute to the fortunes of the employer and therefore directly related to their employment it is A/a tax deduction (expence)for the employer B/ for the ultimate benefit of the employer and C/ nobody else's business.
Like I said, I have a simple mind.
CC
As a course is designed to assist employees to contribute to the fortunes of the employer and therefore directly related to their employment it is A/a tax deduction (expence)for the employer B/ for the ultimate benefit of the employer and C/ nobody else's business.
Like I said, I have a simple mind.
CC
Checklist Charlie I take it you are not an accountant. I suggest you re read 150 Driver's post - he has actually answered the question and put the nail in the coffin if you read it carefully.
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150 Driver is right that here is not the best place to get financial/tax advice. It’s worth reading the actual legislation. It’s also worth reading the HMRC guidance, although keep an open mind because it sometimes reflects what they hoped the legislation said rather than what it does say. In this sort of case, accountants regularly offer differing views on their accountingweb forum, and their differing views represent both differing knowledge of the detail and differing approaches to business and HMRC in terms of boldness vs risk aversion.
The definition of work related training is actually considered to be quite wide by HMRC.
https://www.gov.uk/hmrc-internal-man...anual/eim01220
Ultimately your employer and their accountant need to agree the approach.
As a non-accountant I observe that we in the military trained people to drive cars, motor cycles, landrovers and trucks, and fly aircraft without it being considered BIK. And HMRC never did us any particular favours.
The definition of work related training is actually considered to be quite wide by HMRC.
https://www.gov.uk/hmrc-internal-man...anual/eim01220
Ultimately your employer and their accountant need to agree the approach.
As a non-accountant I observe that we in the military trained people to drive cars, motor cycles, landrovers and trucks, and fly aircraft without it being considered BIK. And HMRC never did us any particular favours.
150 Driver is right that here is not the best place to get financial/tax advice. It’s worth reading the actual legislation..
If an employer wants to send someone on a training course of any type, then the employee just goes. Whether it's a driving course, sailing course, IT course, typing course or flying course matters not a jot to the employee.