Go Back  PPRuNe Forums > Aircrew Forums > Rotorheads
Reload this Page >

Can you reclaim the VAT and/or tax on training costs?

Rotorheads A haven for helicopter professionals to discuss the things that affect them

Can you reclaim the VAT and/or tax on training costs?

Old 12th Feb 2014, 14:37
  #181 (permalink)  
 
Join Date: Feb 2007
Location: England
Posts: 130
Likes: 0
Received 0 Likes on 0 Posts
Cost sharing - the CAA and the Aviation Insurers

Some good points here made about the ANO and how the CAA interpret public v private transport. Worth remembering that in the unlikely event of a mishap, the AAIB and Aviation Insurers will take a very close look at all the available evidence surrounding the flight. That often then results in the CAA taking a closer more forensic look at who paid for what.

I have seen aviation insurers declining to pay claims (hull and liability), and also leaving pilots in the lurch (having to fund legal bills themselves) where the line was crossed from simple cost sharing to something more commercial.
Swiss Cheese is offline  
Old 12th Feb 2014, 20:06
  #182 (permalink)  
 
Join Date: Jan 2014
Location: UK
Age: 30
Posts: 16
Likes: 0
Received 0 Likes on 0 Posts
Chopper,
I shall bare the attitude comment in mind, As I'm yet to start my training and I'm going through all the cost ect. and budgeting for all the parts of the training I'm curious to see what can be saved where hence the "push the rules to the limit comment"


(and before someone says it, YES I have read the "so you want to be a helicopter pilot" posts...ALL of them)


Pitts,
I am going to get VAT registered I have the company set up & seeing an accountant next week. I'm going to also try and import cheap RC heli's from china and sell them through the compnay on ebay to see if I can make £££ to put towards training.
GMavrick is offline  
Old 13th Feb 2014, 09:09
  #183 (permalink)  
 
Join Date: Jan 2012
Location: UK
Posts: 1,116
Received 9 Likes on 8 Posts
GM - I think we are talking at cross purposes. I think you talking about making a company in order to fund your flying? But of course a company selling RC toys is not related to your flying and so you'll not be able to reclaim the VAT.

What you could do however is get a display authorisation, maybe even do some air races. Do that and maybe someone will give you some sponsorship dollars. What that does is establish a trading position. Once you have done that - and its related to you flying it would be entirely reasonable for that company to not only fund your flying (which in the early stages is you supporting the company with a directors loan - but you'll be able to off set future profits against the early losses, etc, etc blah) but you'll be able to reclaim the VAT.
Pittsextra is offline  
Old 13th Feb 2014, 10:28
  #184 (permalink)  
 
Join Date: Jul 2002
Location: UK
Posts: 2,953
Received 12 Likes on 8 Posts
Originally Posted by Pittsextra
What you could do however is get a display authorisation, maybe even do some air races.
Hmmm, that's realistic.

GMavrick - I hope that you're beginning to spot a pattern with Pittsextra's posts and advice.
Bravo73 is offline  
Old 13th Feb 2014, 10:59
  #185 (permalink)  
 
Join Date: Jan 2012
Location: UK
Posts: 1,116
Received 9 Likes on 8 Posts
My friend what actually is your problem?

I think you have a very narrow view.

My comment vis the events company was a tongue in cheek, playing devils advocate - if you will - but sadly you are very uptight and kind of just threw out the ANO comment but actually even that doesn't really limit things.

Get a DA - you do know that covers a wide range of things and even if you think that is a step too far then what really is to stop anyone from entering an R22 in an air race just once, getting a company to give you £100 (whatever the number is its irrelevant) to establish a trading position, and then off you go.

Question for you - how do you think a bunch of sports professionals get paid?

Sorry but there is nothing wrong with that advice.
Pittsextra is offline  
Old 13th Feb 2014, 19:27
  #186 (permalink)  
 
Join Date: Sep 2007
Location: london
Posts: 741
Likes: 0
Received 1 Like on 1 Post
Sadly the days when you simply registered for VAT are over. Nowadays you have to demonstrate you have a trading company.

If you raise enough money to run your formula 1 car for the year that is fine. If daddy gives you £100 and you spend the next year flying a helicopter....... The VAT inspector will also come round for a cup of coffee every so often and cross examine you about what trading you are continuing to do. Their powers are not insignificant including fines

I am glad OP is off to see his accountant before embarking on this dubious trading
homonculus is offline  
Old 14th Feb 2014, 07:07
  #187 (permalink)  
 
Join Date: Jan 2014
Location: UK
Age: 30
Posts: 16
Likes: 0
Received 0 Likes on 0 Posts
Pitts I probably haven't explained properly.
What I've been told about claiming the the VAT back is getting up as a sole trader/LTD company, getting VAT registered but has Homo(not funny) said you need to be seen as trading, but I don't have to make any money.
The flying school I going to go to said that they would sell me r22 trail vouchers and I sell them on. (I'll advertise it, but I probably won't so any, if I do great, I'm only going buy vouchers if I sell them, not have stock) but the Rc stuff I'll have more a chance of actually making money it's more an add on and let's see what happens.

I' have no idea what display authorisation is or let's you do I'll find out.

Getting this thread back on topic, are there anymore ways to cost share then just taking a friend up and slitting the cost 50/50?
GMavrick is offline  
Old 14th Feb 2014, 08:07
  #188 (permalink)  
 
Join Date: Jul 2002
Location: UK
Posts: 2,953
Received 12 Likes on 8 Posts
Originally Posted by GMavrick
The flying school I going to go to said that they would sell me r22 trail vouchers and I sell them on.
Ah, would that be Senior Aviation? No wonder you want to sail so close to the wind.

I would avoid them like the plague. Do a search for them on here. They are a bunch of crooks.
Bravo73 is offline  
Old 14th Feb 2014, 08:24
  #189 (permalink)  
 
Join Date: Jan 2012
Location: Blackbushe City Limits
Posts: 69
Likes: 0
Received 0 Likes on 0 Posts
HMRC won't be interested in registering you for VAT unless you can show them your commercial licence and business plan etc.

Went round the houses on this one extensively last year with them.
LOZZ is offline  
Old 14th Feb 2014, 08:45
  #190 (permalink)  
 
Join Date: Aug 2000
Posts: 1,944
Likes: 0
Received 43 Likes on 25 Posts
GMaverick

The simple answer to your question is NO, so why try and get round the law ?

Put it this way you charge to take someone up and you hurt or kill them you wont be worrying about cost sharing you will be asking for some help paying a large legal bill to keep you out of the nick.
Cost share with friends fine, advertise in a club fine, fly an owners machine for free fine, position an aircraft for someone fine. As soon as money changes hands you are breaking the law.
You can do anything you want until something goes wrong !
Hughes500 is offline  
Old 14th Feb 2014, 13:26
  #191 (permalink)  
 
Join Date: Jun 1999
Location: Worldwide
Age: 72
Posts: 118
Received 2 Likes on 2 Posts
Maybe

Maybe just keep the helicopter flying as a goal for the future and do something that you can realistically afford right now without scheming. Bike licence perhaps?
All your friends would want a drink or two once they part-funded your licence.
thechopper is offline  
Old 14th Feb 2014, 16:19
  #192 (permalink)  
 
Join Date: Jan 2014
Location: UK
Age: 30
Posts: 16
Likes: 0
Received 0 Likes on 0 Posts
Bravo,
Nope I no all about senior aviation, I'm going Tiger Helicopters at shobdon seem to be good guys there, I'm not buying any vouchers unless anyone wants to buy them so I won't have a pile of vouchers that I want to shift.

LOZZ,
don't know why you have encountered that problem the accountant I'm going to see I spoke to on the phone and he said he done this before for pilots claiming the VAT from PPL onwards, I asked did you need a CPL and him and the flying school said no.
Maybe they said CPL because you can actually charge people for flying.
Where as I'm "selling vouchers" and doing training at the company's exspence.

Chopper,
I haven't actually said that I can't afford training, I just wanted to know if there are anyways to save here and there at the end of the day if I could save 10k on then who wouldn't.

Hughs,
Thanks for a definitive answer.
GMavrick is offline  
Old 14th Feb 2014, 17:58
  #193 (permalink)  
 
Join Date: Jan 2012
Location: UK
Posts: 1,116
Received 9 Likes on 8 Posts
VAT

GM - there is no issue regarding the formation of a corporate entity and making a VAT reclaim as long as you have established a trading position. i.e. you are buying things (that bit is obvious) and you are selling things (which is the bit most here don't seem to be able to grasp - and likely because they didn't do it when they were training and so it doesn't compute).

The selling of things would suggest in aviation terms that you are charging out your services as a pilot in the usual sense i.e. passenger transport or ferrying, long lining etc. However there is nothing to stop those engaged in the sporting side of aviation from charging a fee for branding on the aircraft/pilot clothing or corporate hospitality at an event in the same way other sporting personalities do.

It isn't hard to google some aerobatic pilots or helicopter competition pilots and find such branding. It is that which establishes a trading position.

As for the poster that suggested that HMRC needed to see such plan before you can register for VAT - that is utter nonsense. They do not. It would however be very normal for them to want to understand your plan should they look at your affairs - however you will have one. Which might be I was engaged in sporting aviation, liked it and thought "I'm quite good at this I'd like to continue further and gain a CPL".... Its just a simple investment in ones own skill set which enables you to earn more money and - guess what - pay VAT...

Its not hard to work out.
Pittsextra is offline  
Old 14th Feb 2014, 18:44
  #194 (permalink)  
 
Join Date: Sep 2007
Location: london
Posts: 741
Likes: 0
Received 1 Like on 1 Post
No sorry, things have changed. You are correct that in the old days you simply sent in a registration form and got a VAT number. Now they don't give you a VAT number until you have demonstrated you are a proper trading company. I have had to provide a business plan with a lot of supporting information for my latest company. They were very fair but thorough

Yes you can sell advertising, models etc etc and claim the transport costs of the business. If you have a helicopter you can fly each model to the customer, but you won't make a profit and may come unstuck with your business model. What you can't do is get the VAT man to subsidise your training. You do not need a CPL to sell radio control models nor vouchers. You do not need a CPL to brand a helicopter.

I would caution you not to go down this route. Unlike the tax man, the VAT man will come and inspect you. If he isn't happy he has draconian powers and does use them. It just isn't worth it
homonculus is offline  
Old 14th Feb 2014, 18:56
  #195 (permalink)  
 
Join Date: Jan 2012
Location: UK
Posts: 1,116
Received 9 Likes on 8 Posts
Not wishing to get into a HMRC face off but you are simply scare mongering now. Its ridiculous. You are absolutely correct when you say its not wise to try and defraud HMRC and that they have very wide ranging powers. That said there is no attempt to de-fraud anyone.

In the example I gave there is absolutely nothing dodge about that situation.

Here for example is the british helicopter team website:-

British Helicopter Team | WHC Events

Which suggests HAL, Kannad aviation, enable and dogcam are sponsors.

Are you saying that if one of the team wanted to gain a CPL that wouldn't be viewed as a positive investment in ones own skill and a potential and credible source of future revenues??

HMRC could investigate that until kingdom comes. If invoices would be there, the log book would confirm the flights absolutely and you have a clear plan to fund a CPL and if the company has no funds then the director has committed to funding the supporting things until the company becomes profitable.

Its not black magic.
Pittsextra is offline  
Old 15th Feb 2014, 17:12
  #196 (permalink)  
 
Join Date: Sep 2007
Location: london
Posts: 741
Likes: 0
Received 1 Like on 1 Post
Thanks Pittsextra

I am giving my personal experience. sorry if you think it is scary

If you are reclaiming VAT and do not have a proper trading company (and have managed to get a VAT number in the first place) you are at risk of being required to repay the VAT plus interest plus fine, but the powers they have mean they can do this….

I have looked at the website but can't see that the UK team is VAT registered. Maybe you know more than I do. Which member is getting their CPL via the website????? And has it been accepted by HMRC?????? I suspect not so this is a hypothetical situation, but I would put my money on it not being allowed. You can compete and are competing without a CPL, so what business case is there for spending £60,000?

Anyhow back to OP - I still think he should be very careful about trying to reclaim his training VAT via a company that is managing quite well selling vouchers without a CPL pilot
homonculus is offline  
Old 15th Feb 2014, 19:25
  #197 (permalink)  
 
Join Date: Jan 2014
Location: UK
Age: 30
Posts: 16
Likes: 0
Received 0 Likes on 0 Posts
Homonculus,
The way I've had the VAT situation explained to me is that the company will be more like 'Red letterdays' they sell flight vouchers and they wont need CPL's If the tax man asks "why am I claiming flight training" I explain that I'm going from PPL to CPL to FI which is employee (Me) training.
so I go from selling vouchers and passing the customer over to a qualified pilot to carry out the flight.


when I am qualified I could carry out the voucher flights, as a lot of pilots are self employed and charge out there service's that's what I will do but I charge VAT to the company who are employing me.


As the chances of getting a full time job as a pilot with a fresh FI are pretty low, the work most likely would be contract work which is where the company / I will be earning money as a pilot
GMavrick is offline  
Old 15th Feb 2014, 20:47
  #198 (permalink)  
 
Join Date: Jul 2002
Location: UK
Posts: 2,953
Received 12 Likes on 8 Posts
Originally Posted by GMavrick

when I am qualified I could carry out the voucher flights, as a lot of pilots are self employed and charge out there service's that's what I will do but I charge VAT to the company who are employing me.


As the chances of getting a full time job as a pilot with a fresh FI are pretty low, the work most likely would be contract work which is where the company / I will be earning money as a pilot
And then what happens when you end up getting a job as a co-pilot on the North Sea? Or any other job where you are an employee? Therefore, not being in a position to charge VAT.

I suspect that the VAT man will come calling, asking for his slice back...
Bravo73 is offline  
Old 15th Feb 2014, 21:17
  #199 (permalink)  
 
Join Date: Jan 2014
Location: UK
Age: 30
Posts: 16
Likes: 0
Received 0 Likes on 0 Posts
Yes, that could happen, most likely I would close the company if I got a permanent job, and because the company would have made a loss the VAT man shouldn't come knocking.
GMavrick is offline  
Old 15th Feb 2014, 21:58
  #200 (permalink)  
 
Join Date: Jul 2002
Location: UK
Posts: 2,953
Received 12 Likes on 8 Posts
Originally Posted by GMavrick
Yes, that could happen, most likely I would close the company if I got a permanent job, and because the company would have made a loss the VAT man shouldn't come knocking.
So you're in a situation where you have claimed back VAT on the expectation of charging VAT on future sales. And those sales then never materialise.

And you think that the VAT man won't want his slice back? Well, good luck with that.
Bravo73 is offline  

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.