one for the bean counters
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one for the bean counters
this may seem a stupid question, but....
we all know that FTO's have to charge VAT on their training and tuition. now, assuming your got the money upfront, what is to stop you setting up a company, registering for VAT and then bunging all your money into the company and paying for the course from your company. You can then claim the VAT back from the nice people at Customs and Excise.
Or am I talking out of my derriere?
we all know that FTO's have to charge VAT on their training and tuition. now, assuming your got the money upfront, what is to stop you setting up a company, registering for VAT and then bunging all your money into the company and paying for the course from your company. You can then claim the VAT back from the nice people at Customs and Excise.
Or am I talking out of my derriere?
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This is a complicated subject, which often crops up.
The simplistic answer is:-
There is nothing to stop you registering a Limited Company, Partnership or Sole Trader, for VAT, & claiming back the VAT, paid on your training.
However, before HM Customs & Excise (C & E) will accept the registration, you will have to convince them that the business genuinely intends to trade.
If you do manage to get the business registered, then if the ONLY transactions that ever went through the VAT reclaim system, were the VAT on the training, then C & E could disallow the reclaims, on the grounds that the flight training was a personal expense of the owner of the business (you) & not a genuine business expense, of a genuine ongoing business.
The simplistic answer is:-
There is nothing to stop you registering a Limited Company, Partnership or Sole Trader, for VAT, & claiming back the VAT, paid on your training.
However, before HM Customs & Excise (C & E) will accept the registration, you will have to convince them that the business genuinely intends to trade.
If you do manage to get the business registered, then if the ONLY transactions that ever went through the VAT reclaim system, were the VAT on the training, then C & E could disallow the reclaims, on the grounds that the flight training was a personal expense of the owner of the business (you) & not a genuine business expense, of a genuine ongoing business.
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thanks for the reply d-b.
if i can pick your professional brain a bit more.
I have a company that i'm currently winding up (thank you IR35
) that has been VAT registered for 4 years. So what I was actually thinking is
a) start using this company again
b) change the nature of business to be something more along the lines of flying school
c) place some money into the bank account
d) start training the employee (i.e. me)
My argument to the C&E is that I am planning to run my own flying school and as a consequence, need to train my employee accordingly. I am actually considering this as a viable option to getting employement post CPL. You never know till you try!
if i can pick your professional brain a bit more.
I have a company that i'm currently winding up (thank you IR35
) that has been VAT registered for 4 years. So what I was actually thinking isa) start using this company again
b) change the nature of business to be something more along the lines of flying school
c) place some money into the bank account
d) start training the employee (i.e. me)
My argument to the C&E is that I am planning to run my own flying school and as a consequence, need to train my employee accordingly. I am actually considering this as a viable option to getting employement post CPL. You never know till you try!
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g-h
It will not make a lot of difference to the final outcome, whether you use the existing company or start a new one. Except, you will not have to apply for a new VAT registration, so long as you have not deregistered the present one.
If you do eventually start a source of aviation related income (such as flying instruction) coming into the company, then reclaiming the VAT on training, is a lot less likely to be challenged, by C & E.
If you company is ONLY selling your time, as a pilot/instructor, it may still be classified as a Personal Services Company, by the Inland Revenue, & thus caught under the dear old IR35 If it is deemed to fall under IR35, then you cannot get tax relief on your training cost, even if you did manage to get a VAT reclaim, on it.
d-b
It will not make a lot of difference to the final outcome, whether you use the existing company or start a new one. Except, you will not have to apply for a new VAT registration, so long as you have not deregistered the present one.
If you do eventually start a source of aviation related income (such as flying instruction) coming into the company, then reclaiming the VAT on training, is a lot less likely to be challenged, by C & E.
If you company is ONLY selling your time, as a pilot/instructor, it may still be classified as a Personal Services Company, by the Inland Revenue, & thus caught under the dear old IR35
If it is deemed to fall under IR35, then you cannot get tax relief on your training cost, even if you did manage to get a VAT reclaim, on it.d-b
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g-h
I would like to add a warning to my previous posts.
As I said, I have only given a simplistic overview of a fairly complicated subject, which has been altering over recent years, both due to IR35 & various decisions in the courts.
If you, or anyone else decides, to go along this route, I would very strongly advise you to discuss the whole project with your own accountant, who will consider all your personal & business circumstances, BEFORE you set up a company etc.
Best of luck with your plans
I would like to add a warning to my previous posts.
As I said, I have only given a simplistic overview of a fairly complicated subject, which has been altering over recent years, both due to IR35 & various decisions in the courts.
If you, or anyone else decides, to go along this route, I would very strongly advise you to discuss the whole project with your own accountant, who will consider all your personal & business circumstances, BEFORE you set up a company etc.
Best of luck with your plans
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Advice heeded,
I thought I'd sound this idea out here first as everyone here is aviation minded, and would have a greater understanding of all the issues. My accountant doesn't really understand what I'm going on about. Mind you, neither do I.
Oh well, time to think up plan B then.
I thought I'd sound this idea out here first as everyone here is aviation minded, and would have a greater understanding of all the issues. My accountant doesn't really understand what I'm going on about. Mind you, neither do I.
Oh well, time to think up plan B then.
