Tax relief on training.
Guest
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Hi, Avrodamo (North Yorkshire was always a better force! 
)
One avenue you may consider -
An accountant may give you sound advice on setting up as self-employed, offsetting aviation costs against expenses, and particularly getting VAT registered on a voluntary basis to reclaim VAT.
But you'd need to demonstrate to the VAT man that you were running (or hoping to run) a business (even training costs count).
Just an idea.
Cheers
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If you're not on the edge, then you're taking up too much space.
)One avenue you may consider -
An accountant may give you sound advice on setting up as self-employed, offsetting aviation costs against expenses, and particularly getting VAT registered on a voluntary basis to reclaim VAT.
But you'd need to demonstrate to the VAT man that you were running (or hoping to run) a business (even training costs count).
Just an idea.
Cheers
------------------
If you're not on the edge, then you're taking up too much space.
Guest
Posts: n/a
I thought about this a while ago. I already have a limited company that I could use which is VAT registered and trades in the IT sector.
If you did pay for training through a company, you could offset the whole training cost against tax and claim back the VAT. You could even claim reasonable expenses during the training against tax.
I spoke at great length to my accountant about this, and his advice was not to go ahead: he said he would be very surprised if the Inland Revenue would allow the training to be tax-free, as it was obviously training in a different sector to that which the company is trading. Even though any training which 'enhances the earnings potential of the company' is tax-deductable, the Revenue have seen most tricks before, and if they don't like it, it's up to you to prove at a tax tribunal that it is genuine.
If you did go ahead and do this, and the Revenue didn't like it, they would judge that you personally had a 'benefit-in-kind' from the training, and tax you as if that money had been paid direct to you. Customs and Excise would also want their VAT back as well. Net result: no gain. The Revenue is also getting tougher with people who they think are really trying it on, and might want to bring charges against you: the law was made tougher recently regarding tax-evasion.
If you don't already have a company that is trading, you can't just set up a company to pay for your training, as this is a 'Sham Company' and that's illegal.
Anyway, in the end I decided not to go ahead with this: my personal tax situation is in enough of a mess with this whole IR35 fiasco, basically allowing the Revenue to turn round at any time in the next seven years and say I owe them a sh!tload more tax: adding extra indecision from expensive training sat on the company's books that may or may not end up a benefit in kind would be too much for me.
If you did pay for training through a company, you could offset the whole training cost against tax and claim back the VAT. You could even claim reasonable expenses during the training against tax.
I spoke at great length to my accountant about this, and his advice was not to go ahead: he said he would be very surprised if the Inland Revenue would allow the training to be tax-free, as it was obviously training in a different sector to that which the company is trading. Even though any training which 'enhances the earnings potential of the company' is tax-deductable, the Revenue have seen most tricks before, and if they don't like it, it's up to you to prove at a tax tribunal that it is genuine.
If you did go ahead and do this, and the Revenue didn't like it, they would judge that you personally had a 'benefit-in-kind' from the training, and tax you as if that money had been paid direct to you. Customs and Excise would also want their VAT back as well. Net result: no gain. The Revenue is also getting tougher with people who they think are really trying it on, and might want to bring charges against you: the law was made tougher recently regarding tax-evasion.
If you don't already have a company that is trading, you can't just set up a company to pay for your training, as this is a 'Sham Company' and that's illegal.
Anyway, in the end I decided not to go ahead with this: my personal tax situation is in enough of a mess with this whole IR35 fiasco, basically allowing the Revenue to turn round at any time in the next seven years and say I owe them a sh!tload more tax: adding extra indecision from expensive training sat on the company's books that may or may not end up a benefit in kind would be too much for me.
Guest
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Dreamcatcher:
Sorry, but Hampshire was always the best force, until the government started meddling with Europe. Then Europe started meddling with the government - now all is a pile of poo!
But here is not the place to vent my anger!
"I am going to enjoy this!"
Sorry, but Hampshire was always the best force, until the government started meddling with Europe. Then Europe started meddling with the government - now all is a pile of poo!
But here is not the place to vent my anger!
"I am going to enjoy this!"
Guest
Posts: n/a
Tax relief for training??
Lifted this from an article on the internet:
(Can anyone confirm if this is true, or is it already taken into account when you are billed by the training college??)
"....NVQs and Tax Relief for Commercial Pilot Training
note: see NVQ page for latest news
While the cost of paying for your CPL/IR training can undoubtedly be a major concern, help may be at hand in the form of tax relief to the tune of 23% (or 40% if you’re in the higher tax bracket). This is applicable on any flight training towards a CPL/IR as the training is in line with the current National Vocational Qualification (NVQ) scheme. NVQs can be applicable to any number of training courses, from catering to shop retailing to learning how to be a commercial pilot. It refers to a series of levels of competence which, once completed can, according to the level achieved, result in a qualification considered equal to a senior management position. With the CPL training curriculum falling into line with existing levels of NVQ assessment, the tax relief becomes available.
Of course, there are certain criteria which must be met before application for tax relief can be accepted. These include that the applicant must be a resident in the UK for at least 183 days a year, isn’t entitled to any other tax relief and isn’t only undertaking the training for recreational purposes. What this means is that if are applicable you will only be required to pay 77% of your training fees, with your training college able to claim the rest back from the Inland Revenue.
For further details of NVQ tax relief, either contact your training college or the Aviation Training Association on 01494-445262. ......."
What do you think??
(Can anyone confirm if this is true, or is it already taken into account when you are billed by the training college??)
"....NVQs and Tax Relief for Commercial Pilot Training
note: see NVQ page for latest news
While the cost of paying for your CPL/IR training can undoubtedly be a major concern, help may be at hand in the form of tax relief to the tune of 23% (or 40% if you’re in the higher tax bracket). This is applicable on any flight training towards a CPL/IR as the training is in line with the current National Vocational Qualification (NVQ) scheme. NVQs can be applicable to any number of training courses, from catering to shop retailing to learning how to be a commercial pilot. It refers to a series of levels of competence which, once completed can, according to the level achieved, result in a qualification considered equal to a senior management position. With the CPL training curriculum falling into line with existing levels of NVQ assessment, the tax relief becomes available.
Of course, there are certain criteria which must be met before application for tax relief can be accepted. These include that the applicant must be a resident in the UK for at least 183 days a year, isn’t entitled to any other tax relief and isn’t only undertaking the training for recreational purposes. What this means is that if are applicable you will only be required to pay 77% of your training fees, with your training college able to claim the rest back from the Inland Revenue.
For further details of NVQ tax relief, either contact your training college or the Aviation Training Association on 01494-445262. ......."
What do you think??
Guest
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Long gone.. sorry.
pointless amount of paper work to achive a HND in 'flying stuff' only usefull if you wanted to go on for a uni degree. didn't take into account that the CPL/IR at the end of it would be proof itself you had dont the work. another bit of daft goverment publicity, when commercial flight training should be regarded in its own right as a qualification.
pointless amount of paper work to achive a HND in 'flying stuff' only usefull if you wanted to go on for a uni degree. didn't take into account that the CPL/IR at the end of it would be proof itself you had dont the work. another bit of daft goverment publicity, when commercial flight training should be regarded in its own right as a qualification.
Guest
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I saw something about this issue in IR119 which I have a copy (althougt I cannot find it anymore in the IR website) which states that when the NVQ cannot be applied there is what is called an "alternative route" which effectively works exactly in the same way as the previous NVQ scheme. I cannot provide more details now, but I can provide the text later on if that is of interest. There is also a number to call for more information. The only thing I remember is that it applies to over 30's only and for full time or substancially(?) full time study.
Anyone heard of this "alternative route"?
TheNavigator
Anyone heard of this "alternative route"?
TheNavigator
Guest
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Navigator,
As far as I know what you are referring to is VTR (Vocational Tax Relief) which has also now gone. If it really has been replaced by anything else I'd love to know about it, but sadly I don't think so.
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Whirly
To fly is human, to hover, divine.
As far as I know what you are referring to is VTR (Vocational Tax Relief) which has also now gone. If it really has been replaced by anything else I'd love to know about it, but sadly I don't think so.
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Whirly
To fly is human, to hover, divine.
Guest
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I remember something about this Navigator. Yes it was for over 30s and the course had to last over 2 weeks and (I think) under 6.
Best bet would be to ring someone like OATS and ask - they're sure to know of any tax dodges to bring down th efees and attract more students.
Best bet would be to ring someone like OATS and ask - they're sure to know of any tax dodges to bring down th efees and attract more students.
Guest
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This is what I found about this issue. Aparentely one of the exclusions of this new system is precisely Pilot Training. Very unfortunate this is ....
As the new national system for Individual Learning Accounts is introduced, Vocational Training Relief (VTR) is to be withdrawn with effect from 31 August 2000. Payments made upto and including 31 August 2000 will be eligible for relief. Payments made after that date will not be eligible.
Further information about Individual Learning Accounts is available on this website or by ringing the Individual Learning Account Centre
on 0800 072 5678. http://www.dfee.gov.uk/ila
Anybody thought of starting out an activity as a self employed and getting relief from the training provided for the exercise of the profession?
[This message has been edited by TheNavigator (edited 12 June 2001).]
As the new national system for Individual Learning Accounts is introduced, Vocational Training Relief (VTR) is to be withdrawn with effect from 31 August 2000. Payments made upto and including 31 August 2000 will be eligible for relief. Payments made after that date will not be eligible.
Further information about Individual Learning Accounts is available on this website or by ringing the Individual Learning Account Centre
on 0800 072 5678. http://www.dfee.gov.uk/ila
Anybody thought of starting out an activity as a self employed and getting relief from the training provided for the exercise of the profession?
[This message has been edited by TheNavigator (edited 12 June 2001).]
Guest
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TheNavigator, it sounds like you feel the same way I did when I realised that VTR2 had been disbanded. It was one benefit of being 30+. I too looked at the Individual Learning Account system and indeed now have one! But what is it worth? I have yet to find the answer to that one.
Not wanting to get political but the removal of the Tax relief is discourages personal development, something that was well touted in the "education education education" blah.
So tax relief has gone - we get over that.
ILA's are here - they specifically ban "flying lessons" so I accept that the government won't hire the aircraft and instructor but are you sure that it really bans "Pilot Training". ie ground based theory, exam fees etc toward a commercial licence?
The other problem is finding a training establishemnet that:
1) Has heard of ILA's
2) Has done anything about it to enable you to get a discount.
Has anyone used an ILA to any effect in the aviation world?
Is it not in the interests of the ground schools to make their expensive training courses accessible to more punters? Even if it is a "mere £150" I recall a few years ago almost every advert had some mention of NVQ discount but today there is no mention of ILAs.
Not wanting to get political but the removal of the Tax relief is discourages personal development, something that was well touted in the "education education education" blah.
So tax relief has gone - we get over that.
ILA's are here - they specifically ban "flying lessons" so I accept that the government won't hire the aircraft and instructor but are you sure that it really bans "Pilot Training". ie ground based theory, exam fees etc toward a commercial licence?
The other problem is finding a training establishemnet that:
1) Has heard of ILA's
2) Has done anything about it to enable you to get a discount.
Has anyone used an ILA to any effect in the aviation world?
Is it not in the interests of the ground schools to make their expensive training courses accessible to more punters? Even if it is a "mere £150" I recall a few years ago almost every advert had some mention of NVQ discount but today there is no mention of ILAs.
Guest
Posts: n/a
Navigator,
I'm doing just that. I'll be filling in all my expenses for the last tax year, and asking that they be offset against future profits. My accountant says that should be OK, but advised against offsetting them against current profits from my other business (I'm self-employed anyway at present). The reason is that if I either don't get work or am not self-employed as a pilot in the future, the IR may claim back their due with interest!
I've also VAT registered so I can claim back the VAT paid for training. Most helicopter students seem to do this and I even phoned the VAT helpline who said it was fine.
The snag is that none of this may work if you're not likely to become self-employed and earn something eventually. Most helicopter instructors are classed as self employed - but I'm not sure this is the case in the f/w world. Worth looking into though.
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Whirly
To fly is human, to hover, divine.
I'm doing just that. I'll be filling in all my expenses for the last tax year, and asking that they be offset against future profits. My accountant says that should be OK, but advised against offsetting them against current profits from my other business (I'm self-employed anyway at present). The reason is that if I either don't get work or am not self-employed as a pilot in the future, the IR may claim back their due with interest!
I've also VAT registered so I can claim back the VAT paid for training. Most helicopter students seem to do this and I even phoned the VAT helpline who said it was fine.
The snag is that none of this may work if you're not likely to become self-employed and earn something eventually. Most helicopter instructors are classed as self employed - but I'm not sure this is the case in the f/w world. Worth looking into though.
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Whirly
To fly is human, to hover, divine.
Guest
Posts: n/a
Cypres,
My accountant had the forms and is helping me with it. But if you ring the VAT Helpline, 0845.010.9000, they can answer any questions and send you everything you need. You can backdate training expenses for six months too - they volunteered this information when I asked about it; they're very helpful. Better than my accountant in fact; he's a bit vague on VAT - especially for helicopter training!
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Whirly
To fly is human, to hover, divine.
My accountant had the forms and is helping me with it. But if you ring the VAT Helpline, 0845.010.9000, they can answer any questions and send you everything you need. You can backdate training expenses for six months too - they volunteered this information when I asked about it; they're very helpful. Better than my accountant in fact; he's a bit vague on VAT - especially for helicopter training!
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Whirly
To fly is human, to hover, divine.
Guest
Posts: n/a
Nor Me! Funny how you never meet a labour voter! It seems the only ones that openly declare it are soap-dodging vermin!
"Education Education Education" they Bliared.
It is not just Pilot training that has been hit by the axeing of Vocational Tax Relief.
"Education Education Education" they Bliared.
It is not just Pilot training that has been hit by the axeing of Vocational Tax Relief.
Guest
Posts: n/a
The other little bombshell is that for those that paid before the 31 Aug 2000 deadline to get the NVQ but intend to undertake the training after that date eg money on account with a training provider - THE TRAINING HAS TO BE COMPLETED BY 30 JUNE 2001 - thats about 2 weeks off. Otherwise the NVQ on training after that date is ineligble and your training provider will have to refund the Inland Revenue for any tax relief on your account, which they will take from you!
This has been checked with the Inland Revenue VTR section!
MTMA
This has been checked with the Inland Revenue VTR section!
MTMA