Offset ATPL Course Costs against Tax
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Join Date: Jul 2008
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Offset ATPL Course Costs against Tax
Hi
Has anyone formed their own company before they started their ATPL training and then effectively ran it at a loss for 18 months whist they were completing their course. This would mean the company would be in the red at the start of year 3. Assuming you could get a job "contracting" for a few years, you could claim back the VAT and offset the losses against tax. This would mean you would pay very little tax in the early years, net result being you could effectively claim back some of your training costs.
I have heard this is done by pilots who offset their type rating course fees using Irish banks but obviously they have formed their companies after they have completed their initial ATPL training and can claim back the tax as they are qualified and effectively running a business.
I need to borrow £85,000 and I am looking at ways to ease the pain.
I do not even know if this is legal. A friend who works in the IT industry says it is. He says it is legal for a contactor to claim back training fees on courses and you can claim back losses upto 3 years.
Any advice would be really appreciated
Has anyone formed their own company before they started their ATPL training and then effectively ran it at a loss for 18 months whist they were completing their course. This would mean the company would be in the red at the start of year 3. Assuming you could get a job "contracting" for a few years, you could claim back the VAT and offset the losses against tax. This would mean you would pay very little tax in the early years, net result being you could effectively claim back some of your training costs.
I have heard this is done by pilots who offset their type rating course fees using Irish banks but obviously they have formed their companies after they have completed their initial ATPL training and can claim back the tax as they are qualified and effectively running a business.
I need to borrow £85,000 and I am looking at ways to ease the pain.
I do not even know if this is legal. A friend who works in the IT industry says it is. He says it is legal for a contactor to claim back training fees on courses and you can claim back losses upto 3 years.
Any advice would be really appreciated
Join Date: Nov 2000
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Perfectly legal, especially if you are going to earn an income out of it, and you don't need to be a limited company. Sole trader is good enough. Be aware that, in some countries, such as Canada, the training school has to be registered as well (I know you are in UK, but others may need the info).
However, I would advise a good accountant, for credibility if nothing else. PM me if you need one.
However, I would advise a good accountant, for credibility if nothing else. PM me if you need one.
Join Date: Aug 2004
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Yes in the UK for a helicopter license I did exactly that, I was lucky enough to be able to claim vat as well. Although this (the vat bit) is a contentious issue some seem to be able to claim it, while others don't. The tax/company set up is basically as you describe it and completely legal.
So if you spend say £100k training your first £100k earnt doesn't attract tax.
Amazingly you were also entitled to claim child tax credits. I owned and declared 3 properties at the time, the equity I had in the properties didn't count although the rental income was of course declared.
Your net profit carried forward is zero until you have earn't more than your training costs. In my case about 2 and a half years. This benefit was then, 2006, worth about £4k per annum.
Competent accountants will advise, they were worth every penny, saved me a fortune.
So if you spend say £100k training your first £100k earnt doesn't attract tax.
Amazingly you were also entitled to claim child tax credits. I owned and declared 3 properties at the time, the equity I had in the properties didn't count although the rental income was of course declared.
Your net profit carried forward is zero until you have earn't more than your training costs. In my case about 2 and a half years. This benefit was then, 2006, worth about £4k per annum.
Competent accountants will advise, they were worth every penny, saved me a fortune.
Join Date: Aug 2003
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Perfectly legal, especially if you are going to earn an income out of it, and you don't need to be a limited company. Sole trader is good enough. Be aware that, in some countries, such as Canada, the training school has to be registered as well (I know you are in UK, but others may need the info).
However, I would advise a good accountant, for credibility if nothing else. PM me if you need one.
However, I would advise a good accountant, for credibility if nothing else. PM me if you need one.
So, my take on it is that if you're already earning income from holding an ATPL then it's ok to claim training expenses for maintaining the ATPL. If you're not already earning income from it then it doesn't qualify as tax deductable.
HMRC seems to confirm this (Specific deductions: administration: own training courses)
