Inland Revenue - Advice
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Inland Revenue - Advice
Can anyone provide any advice in dealing with Inland Revenue for using a company Heli as a 'benefit in kind' for private uses i.e. not company related?
Any experiences / advice would be much appreciated
Apologies if this has been posted before
Any experiences / advice would be much appreciated
Apologies if this has been posted before
Hovering AND talking
Join Date: Feb 2003
Location: Propping up bars in the Lands of D H Lawrence and Bishop Bonner
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I thank you Tarman - as if by magic .....
Your employer will have to declare the private use on your P11D form and you will have to pay tax and National Insurance on that amount of private use. Your employer will also have to pay Employer's National Insurance.
The value on which you get taxed will be 20% of the helicopter's market value
http://www.hmrc.gov.uk/helpsheets/hs210.pdf
Cheers
Whirls
Your employer will have to declare the private use on your P11D form and you will have to pay tax and National Insurance on that amount of private use. Your employer will also have to pay Employer's National Insurance.
The value on which you get taxed will be 20% of the helicopter's market value
http://www.hmrc.gov.uk/helpsheets/hs210.pdf
Cheers
Whirls
John is correct, best way is for your company to charge you a market rate for your own private use of the machine. A lot better than a 20% per annum tax charge, designed originally (apparently) for guys who used suits provided by their company. Now extended to any asset used except those specifically excluded, like cars.
I decided to own the aircraft personally and charge my company a commercial rate for hiring the aircraft from me. But it's a utilisation/risk call of course.
Both methods should prove acceptable to the taxman, but expect him (or in my case, her) to issue veiled threats at every opportunity.
Be careful if you decide to 'risk it'. I have heard of green-eyed officers sitting outside helo owners properties and logging ins and outs, then cross checking against diaries.
I decided to own the aircraft personally and charge my company a commercial rate for hiring the aircraft from me. But it's a utilisation/risk call of course.
Both methods should prove acceptable to the taxman, but expect him (or in my case, her) to issue veiled threats at every opportunity.
Be careful if you decide to 'risk it'. I have heard of green-eyed officers sitting outside helo owners properties and logging ins and outs, then cross checking against diaries.
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I have one owned by a ltd company, and rent it out to a few people, then charge myself the same rates as they are charged. No benefit in kind arises.
If you're loaded enough to own one without needing to rent it out to help cover costs, then you are loaded enough to forget the company ownership route and just pay the costs!
For the rest of us mere mortals, the above keeps it clean, and saves a reasonable amount of cost with low risk.
Lafite
If you're loaded enough to own one without needing to rent it out to help cover costs, then you are loaded enough to forget the company ownership route and just pay the costs!
For the rest of us mere mortals, the above keeps it clean, and saves a reasonable amount of cost with low risk.
Lafite
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Owning the machine personally (no LTD) and hiring it out can work, but depending on country concerned be careful with the VAT situation.
In UK, HMRC take the position that an individual owning a machine and renting it out is unlikely to have a business and to be able to register for VAT. They are very likely to try to refuse your application for VAT registration and then argue with you for a couple of years, citing case law (some of which may have been overturned), and ignoring case law which does not fit their agenda.
If you have the right facts, you do your research and you stick to your guns you can win.
The VAT cost of owning a machine with private and rented use can be better using this route compared to using a LTD vehicle to own the macine and charge you - which is why HMRC try to resist registration. There is a partial disallowance of input VAT based on the proportion of private use, rather than a VAT charge on the hourly cost of renting the machine (you can't rent to yourself).
In UK, HMRC take the position that an individual owning a machine and renting it out is unlikely to have a business and to be able to register for VAT. They are very likely to try to refuse your application for VAT registration and then argue with you for a couple of years, citing case law (some of which may have been overturned), and ignoring case law which does not fit their agenda.
If you have the right facts, you do your research and you stick to your guns you can win.
The VAT cost of owning a machine with private and rented use can be better using this route compared to using a LTD vehicle to own the macine and charge you - which is why HMRC try to resist registration. There is a partial disallowance of input VAT based on the proportion of private use, rather than a VAT charge on the hourly cost of renting the machine (you can't rent to yourself).
