Using your plane for business
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Using your plane for business
I have afriend who owns his own company. He also owns his own aircraft and is thinking of transferring it into his company to allow it to bear all it's running costs. He would be using it for business 50% of the time.
Is this permissible if he only has a PPL and and it is on a private C of A?
Is this permissible if he only has a PPL and and it is on a private C of A?
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Your friend will not be able to pass all of the running costs to his business if only 50% of the flying is on business. Instead, he will need to pay his own company back for the personal flying that he does at a commercially tenable rate, and/or risk the possibilty of the flights being treated as a benefit in kind.
An accountant is the person to ask here. They will have the job of preparing the accounts in a way that will keep the dreaded Inland Revenue happy.
An accountant is the person to ask here. They will have the job of preparing the accounts in a way that will keep the dreaded Inland Revenue happy.
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Your friend has two options.
He could, as you suggest, sell the aircraft to "his" limited company. Since the company now owns the aircraft, the company would meet all the cost associated with maintaining and operating the aircraft. The company would be entitled to deduct these costs from its profits and would be entitled to recover some of the input VAT suffered. The company would be entitled to claim an allowance on the cost of the aircraft against it profit and on the loss, should this arise, on eventual sale. The company would be liable to tax on a profit on sale. Your friend would be liable for a personal tax liability on the private element of his use.
Alternatively your friend could charge "his" company for the commercial cost of the business element useage of the aircraft. Your friend would in these circumstances be personally liable for the maintenance and operating costs of the aircraft.
Your friend will need to consider the advantages and disadvantages of each of these options. Of course as other contributors have said he should take specific professional advice.
AIC white 21/2000 covers the restrictions applicable to an aircraft owned by a limited company in the circumstances outlined. If you wish to email me I am happy to provide a copy.
He could, as you suggest, sell the aircraft to "his" limited company. Since the company now owns the aircraft, the company would meet all the cost associated with maintaining and operating the aircraft. The company would be entitled to deduct these costs from its profits and would be entitled to recover some of the input VAT suffered. The company would be entitled to claim an allowance on the cost of the aircraft against it profit and on the loss, should this arise, on eventual sale. The company would be liable to tax on a profit on sale. Your friend would be liable for a personal tax liability on the private element of his use.
Alternatively your friend could charge "his" company for the commercial cost of the business element useage of the aircraft. Your friend would in these circumstances be personally liable for the maintenance and operating costs of the aircraft.
Your friend will need to consider the advantages and disadvantages of each of these options. Of course as other contributors have said he should take specific professional advice.
AIC white 21/2000 covers the restrictions applicable to an aircraft owned by a limited company in the circumstances outlined. If you wish to email me I am happy to provide a copy.
Why do it if it's not fun?
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Everyone is getting tied up in tax rules, and suggesting talking to an accountant. What about the PPL privileges, though?
Your friend must, according to the privileges of his PPL, pay his "fair share" of the cost of the flight. That means that if he's flying solo, he must pay for the entire flight, regardless of whether it's for business or pleasure.
That aside, there is nothing illegal about flying for business on a PPL, so long as your friend isn't required to fly as part of his job (which shouldn't be difficult to fix, since he owns the business!) Wish I could have a job where I could fly for business!
FFF
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Your friend must, according to the privileges of his PPL, pay his "fair share" of the cost of the flight. That means that if he's flying solo, he must pay for the entire flight, regardless of whether it's for business or pleasure.
That aside, there is nothing illegal about flying for business on a PPL, so long as your friend isn't required to fly as part of his job (which shouldn't be difficult to fix, since he owns the business!) Wish I could have a job where I could fly for business!
FFF
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Your friend must, according to the privileges of his PPL, pay his "fair share" of the cost of the flight.
This is specifically covered in a document on the CAA website - I'll try and find it and post a link.
Company can reimburse the costs of travel to you even as PPL.
This is specifically covered in a document on the CAA website - I'll try and find it and post a link.
Company can reimburse the costs of travel to you even as PPL.
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I agree with the good fella above me. A PPL doesnt necessarily have to pay for his share of a flight. If for example, my friend owned an a/c and was going on hols..he could ask me to take it for a spin and it'd be free..I'd be doing it as a favour and it'd not cost me anything.
Similarly, if I travelled say to Duxford on business, then my company could cover the cost of hiring an aircraft - as long as I'm not getting paid TO fly...I get a salary as a sales man or similar..I'm just using my ability as a pilot to get me there. No problems at all with using a PPL to do that.
I suspect one of the major probs would be weather...to go places regularly and on time you'll be wanting an IMC or IR rating with the British climate.
But having said that..don't let it put you off...any excuse to get extra hours and (and at less personal expense) has to be applauded
Similarly, if I travelled say to Duxford on business, then my company could cover the cost of hiring an aircraft - as long as I'm not getting paid TO fly...I get a salary as a sales man or similar..I'm just using my ability as a pilot to get me there. No problems at all with using a PPL to do that.
I suspect one of the major probs would be weather...to go places regularly and on time you'll be wanting an IMC or IR rating with the British climate.
But having said that..don't let it put you off...any excuse to get extra hours and (and at less personal expense) has to be applauded
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Flying For Fun.
It is good to be cautious, but on this occasion, your caution is misplaced.
A company may pay the costs associated with its employee flying the aircraft on thef firm's business, providing that the employee concerned is not actually employed on the basis of being a pilot.
The ANO explains it all at:
Article 130 9(a)
It is good to be cautious, but on this occasion, your caution is misplaced.
A company may pay the costs associated with its employee flying the aircraft on thef firm's business, providing that the employee concerned is not actually employed on the basis of being a pilot.
The ANO explains it all at:
Article 130 9(a)
Why do it if it's not fun?
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Seems I may be wrong on this one - sorry. Will read the ANO Article which TvR references when I get a chance - always nice to learn something new (especially when it's good news like this!)
FFF
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FFF
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Not so N, but still FG
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The CAA guidance paper on cost sharing is here:-
http://www.caa.co.uk/docs/122/summar..._transport.pdf
Article 130 ANO is here:-
http://www.hmso.gov.uk/si/si2000/20001562.htm#130
http://www.caa.co.uk/docs/122/summar..._transport.pdf
Article 130 ANO is here:-
http://www.hmso.gov.uk/si/si2000/20001562.htm#130
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I agree with all the comments above. I use an aircraft for business and am in no doubt it can provide a very good alternative means of travel. The comments about the weather are of course valid, although it is surprising that for most the year, I guess more especially in the South, how rare it is to be unable to fly. From personal view there is however little doubt that you first need to accumulate a reasonable amount of experience. When a new or newish PPL we all know there were many occasions when you would not safely conduct a flight because of the weather conditions with which you can cope perfectly well with more experience. Obviously an IMC or IR opens up the horizons even further, however that presupposes a suitable "mount" is available. As has been commented on before it is one thing to use an aircraft for occasional IMC use when conditions are benign, quite another when bases are at or around minimum and icing is a real threat. The shortness of the day and the often early closing times of airports in the winter should also not be overlooked. A night rating may help of course.
All that said there are two far more practical observations to be made. Firstly it can be falsely assumed travel by air will save time! Be very careful. Think about the time to get to the airport, the time to get the plane ready, delays at the hold, time to park and secure the aircraft at the other end, and MOST important, time and the means to get from the airport to where ever you are going. It is an interesting equation. I reckon that anywhere in the UK to which you can fly that is within an hours fly distance for me it will be much quicker to go car. Around an hour and a half it becomes marginal, particularly if the place being visited is very close to the airport (but be careful, this is usually not the case). Beyond that it starts to become quicker, but then I am reasonably close to my home airfield. Of course if the trip involves a short sea crossing the time advantages swing rapidly in favour of flying. For example a trip to the I of W by car is a time consuming event, but pretty painless by air. The advantages are even greater for the north of France and beyond, although again, and I don’t speak from personal experience, there will be a point beyond at which a commercial carrier will present a far better alternative.
The second observation is aircraft reliability. Cars rarely develop tec. faults that prevent you completing the journey, but who wants to fly on one mag.? Technical problems arise and with far greater frequency on some aircraft that on others.
In short, for business use think carefully about how close your client / customer is to the airport and how you will get to him, how much time you really will save and what the fall back is, if the weather is unkind or the aircraft develops a tec problem. Having thought about all that go and enjoy, or change jobs so that all your clients / customers are based on airfields around the country and you can afford to fly a twin a get yourself an IMC or IR rating.
Seriously on a positive I go to Oxford on business for example. For me, including all the time spent on preparation, I reckon it saves me at least three hours on the round trip, and sometimes a lot more thanks to the usual M25 congestion. I have not yet had to cancel a trip (summer and winter) but I am able to be flexible when I go, and rarely plan a visit more than a day in advance.
The most important factor I have left until last. When it all works it is of course enormously satisfying, and with a little experience I find far more relaxing than driving. The added bonus is that the Revenue are of course not concerned with whether a particular journey has costs you ten times as much as going my Shankseys pony, so go ahead and deduct the whole cost and enjoy!
All that said there are two far more practical observations to be made. Firstly it can be falsely assumed travel by air will save time! Be very careful. Think about the time to get to the airport, the time to get the plane ready, delays at the hold, time to park and secure the aircraft at the other end, and MOST important, time and the means to get from the airport to where ever you are going. It is an interesting equation. I reckon that anywhere in the UK to which you can fly that is within an hours fly distance for me it will be much quicker to go car. Around an hour and a half it becomes marginal, particularly if the place being visited is very close to the airport (but be careful, this is usually not the case). Beyond that it starts to become quicker, but then I am reasonably close to my home airfield. Of course if the trip involves a short sea crossing the time advantages swing rapidly in favour of flying. For example a trip to the I of W by car is a time consuming event, but pretty painless by air. The advantages are even greater for the north of France and beyond, although again, and I don’t speak from personal experience, there will be a point beyond at which a commercial carrier will present a far better alternative.
The second observation is aircraft reliability. Cars rarely develop tec. faults that prevent you completing the journey, but who wants to fly on one mag.? Technical problems arise and with far greater frequency on some aircraft that on others.
In short, for business use think carefully about how close your client / customer is to the airport and how you will get to him, how much time you really will save and what the fall back is, if the weather is unkind or the aircraft develops a tec problem. Having thought about all that go and enjoy, or change jobs so that all your clients / customers are based on airfields around the country and you can afford to fly a twin a get yourself an IMC or IR rating.
Seriously on a positive I go to Oxford on business for example. For me, including all the time spent on preparation, I reckon it saves me at least three hours on the round trip, and sometimes a lot more thanks to the usual M25 congestion. I have not yet had to cancel a trip (summer and winter) but I am able to be flexible when I go, and rarely plan a visit more than a day in advance.
The most important factor I have left until last. When it all works it is of course enormously satisfying, and with a little experience I find far more relaxing than driving. The added bonus is that the Revenue are of course not concerned with whether a particular journey has costs you ten times as much as going my Shankseys pony, so go ahead and deduct the whole cost and enjoy!
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I use mine on busines about 15/20 % and charge myself an hourly rate which i have calculated to be a reasonable cost of running the thing for the year (all costs maint, hangarage, insurance, fuel etc) divided by the total number of hours estimated usage that year.
For my aircraft works out at £150/hour. My business reimburses me that ammount.Same as if I were using the Train.
I would be happy for tax man or the CAA to look at the arrangements.
For my aircraft works out at £150/hour. My business reimburses me that ammount.Same as if I were using the Train.
I would be happy for tax man or the CAA to look at the arrangements.
