Annual pilot tax free allowance...
 

Afternoon,

Does anyone have any information regarding the annual £900 (UK only) tax free allowance pilots are entitled to? I realise you need to a fill in a tax return but I was wondering if there is a list anywhere dictating what you are actually allowed to claim?

I intend to claim back tax on a headset and hopefully a netbook, both used for flying. But I've heard other flight crew talk of being able to claim things such as food and drink, assuming they were brought +/- 1hr from a duty or anytime away from base during a duty period and assuming you've kept receipts.

Official links and citations to answers would be greatly appreciated

HMRC's website should answer most of your questions.

This is a Fixed rate expense allowance available to uniformed airline crew. It substitutes for the submission of a variety of variable expense claims.

There are a number of capital expense allowances where tapered relief may be given, however it is unlikely you could claim for a notebook or for a headset, unless it is a noise cancelling headset where no alternative provision is made by your employer.

There is no provision for "food & drink" under the FREA. I think you may be confusing the recent submission audit conducted by HMRC in respect of the taxation of aircrew allowances, where these elements were in part included in those submissions.

Food and drink, do not normally pass the "wholly, exclusively and necessary" tests for submission as allowable expenses for aircrew.


The website should help.

How do you go about claiming for a noise cancelling headset if your employer doesnt supply one

Flat Rate Expense Allowance
 

Hi

Does anyone actually use this allowance of £850? Click on this link for information:

Airline pilots: industry wide FRE for 2006/07 onwards: introduction

From what I understand we don't have to prove how we spent the £850, we can just claim it in a tax return.

Cheers

Yes I would like to know how you go about claiming, I presume they may just change your tax code? Would like some more info thou.

There are frequent misconceptions about this allowance.

It assumes zero employer contributions ie per diems. Total untaxed per diems for the year should be deducted, as should any direct expense claims you have made to the employer.So there is a choice between using this flat allowance, or claiming individually for items, which may or may not be allowable. However, you cant just pocket your per diems AND pocket the £850 allowance (unless your per diems happen to be £850 short of your actual costs, which in my case flying long, long-haul trips on pitiful allowances, is possible).

The easiest (only?) way of making the claim is by doing a self assessment form, which anyone can choose to do.

Whilst on the subject.... would anyone be able to shed some light on the issue of claimimg for an iPad through the tax return, i.e. is this something that can be offset on "expeneses necessary for the job"?

Thanks

Where on the self assessment tax form
 

Hi

Whereabouts exactly/under what heading or in which box do you claim the FRE£850?

Thanks in advance.

On the tax return, in the 'Employment' section, there is a box with the title 'Fixed deductions for expenses', it goes in there.

I added it on years ago I just called the tax office and told them that I was a pilot they added it onto my tax code.

Did exactly the same. No need to fill in a tax return. It was negotiated by BALPA and you can back date it to 2006. All you do is call the PAYE section of HMRC (it's an office in Liverpool), tell them you're a pilot, quote the code mentioned earlier and they'll adjust your tax code for you (and send you a nice cheque for previous years). Simples.

The noise cancelling headset you can claim as a capital expense if your employer does not provide one. Not sure if you have to fill in a tax return or not (I do for several other reasons). You have to claim for it for several years in a row to get the maximum tax relief (on a self assessment form anyway).

The notebook is very hit and miss wether the tax office will allow the claim or not. Very dependant on who oversees your return I think. Some pilots have been successful others not.

I found all this out through balpa (and I claim my sub back too, well 66% of it anyway).

You have the right to claim a lot of tax relief for many things and it always stuns me when I fly with very long serving experienced pilots who only have the basic tax relief code (722L this year I think). The tax office have decreed you're entitled to this relief, take advantage of it!

To clear up a misconception,
YOU DO NOT GET £850.

The figure is an additional amount added to your "tax -free" earnings allowance.

If, for example, you were earning £850 a year over the higher-rate threshold, you'd pay 40% ? tax on it. by claiming the fixed allowance, you'd get £340 back (or that much more in your year's take-home pay.

Many trades and professions have a negotiated agreement with the taxman. AFAIK, in the absence of any employer contribution (your per diem allowance IS a contribution) you are entitled to claim the fixed allowance irrespective of what you ACTUALLY spent.

If you spent more than the fixed allowance, you have to weigh up if it's worth the effort of making up accounts and submitting a tax-return to claw back the overpaid tax.

Usually, the taxman's test is that the expense was"necessarily and wholly" incurred in the performance of your job. In the case of the notebook, if you can prove it's used solely for work, it's claimable, if there's a private-use element, the allowable expenditure will be reduced proportionately. likewise the headset (your Union could put up a strong case for the inadequacy of the standard airline issue h/set, though the "elf n' safety " aspect of inferior hearing protection, may mean the employer would strenuously deny their offering was lacking.

REMEMBER, you do NOT "get back" what you paid out.....you only get it allowed as tax-free income.....but the plus-side is that it "Top-slices" your tax,- that is, the allowance is at your highest rate.
I'm NOT an accountant nor a tax-expert and i'm rapidly losing touch with the arcane rules of tax and employment...so don't take this as gospel!

Call the tax office and they will add it to your allowance, I did it years ago.

You don't need to do a tax return to claim the tax relief. All it took when I did it earlier this year was a phone call to HMRC. I claimed for the last 5 years I think. A simple phone call and my tax code was changed and barely 2 weeks later a refund cheque for £1300 arrived on my doorstep.

With the allowance you keep an extra £28-£29 per month on higher rate PAYE. It is intended to compensate for sundry expenses like uniform dry cleaning etc.

May be wrong, but think it's £950. Claimed on SA tax return.

FRE Increase for Next Year :-)
 

EIM50050 - Airline pilots: industry wide FRE for 2013/14 onwards: introduction
EIM50051 - Airline pilots: industry wide FRE for 2013/14 onwards: summary
EIM50052 - Airline pilots: industry wide FRE for 2013/14 onwards: details

Any FR pilots managed to claim this?

Why would you need to claim this when your accountant does it already?