UK Pilot trying to reduce tax bill
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UK Pilot trying to reduce tax bill
Hi all
Looking for a little help.
I'm a UK based airline pilot in a self employed capacity.
I'm interested in trying to do what I can (legally) to reduce my tax payments. I'm looking for factual information and links to useful websites, not rumours or stories.
Areas I want to explore. Can I get tax relief on Duty Pay and how do I declare this. Is there an amount agreed which is free from tax? My former airline paid duty at £2.28 ph tax free. There is clearly a mechanism here for doing something similar but unsure how.
What is tax deductable? Fuel, laundry, food, sunglasses, shoes.....?
I still have a significant training loan to repay. Can my contributions to this receive any Tax relief. My previous employer had arrangements where I received training loan repayments tax free. This would be a MASSIVE benefit to my finances if I could do something similar.
Anything else anyone can think of that would make a difference?
All your help is greatly appreciated.
Cheers.
Looking for a little help.
I'm a UK based airline pilot in a self employed capacity.
I'm interested in trying to do what I can (legally) to reduce my tax payments. I'm looking for factual information and links to useful websites, not rumours or stories.
Areas I want to explore. Can I get tax relief on Duty Pay and how do I declare this. Is there an amount agreed which is free from tax? My former airline paid duty at £2.28 ph tax free. There is clearly a mechanism here for doing something similar but unsure how.
What is tax deductable? Fuel, laundry, food, sunglasses, shoes.....?
I still have a significant training loan to repay. Can my contributions to this receive any Tax relief. My previous employer had arrangements where I received training loan repayments tax free. This would be a MASSIVE benefit to my finances if I could do something similar.
Anything else anyone can think of that would make a difference?
All your help is greatly appreciated.
Cheers.
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Alrighty pablo!
Long time no speak! Several routes you can go down if a contractor however it will depend if you are working for only one company. If its more than one, ltd company is the way to go, recieving a salary of £6k a year with no tax deductions, collecting director dividends up to £42k paying very little tax on that and charging everything work related to the company and claiming that back so you can make quite a substantial amount of money!
You'll find loads that do it that way however they only work for 1 company it puts them in breach of IR35. Do a search on the net for the Dragonfly case (not aviation related but this is what the IR are trying to clamp down on) and you'll see how it can go wrong.
The IR are coming down heavily on aviation at the mo looking for reciepts for everything to prove that the allowences that are in place are justified! With Gordon Brown wanting to claw back as much money through tax as possible to pay for bailing out the banks I would be very wary to go down this route however there is a chance they may not back back date the tax so its a gamble!
Self employed is the other way, collecting your money, putting some passed for tax and NI. Oh and thats if you wanna pay class 1 NI. You can claim back deductions for various things like anr headsets if your company dont have them, replacment uniform (not intial uniform purchase), hotels and transport when working out of base, car parking to name a few!
I know your a semi clever lad
so have prob seen this but if not check it out.
Airline pilots: industry wide FRE for 2006/07 onwards: summary
There are 2 things guaranteed in life, death and paying taxes so I personally dont understand why people try to get away not paying any. With that get a good accountant, they are worth their weight in gold and will get the best in terms of deductions from your tax bill.
As for myself I went down the self employed route and have put away half of my expected 18k tax bill next year. If its less than that I'm away on holiday with the change!
Oh there is also a parasol company which you could work through but again is in a very grey area!
kempus
Long time no speak! Several routes you can go down if a contractor however it will depend if you are working for only one company. If its more than one, ltd company is the way to go, recieving a salary of £6k a year with no tax deductions, collecting director dividends up to £42k paying very little tax on that and charging everything work related to the company and claiming that back so you can make quite a substantial amount of money!
You'll find loads that do it that way however they only work for 1 company it puts them in breach of IR35. Do a search on the net for the Dragonfly case (not aviation related but this is what the IR are trying to clamp down on) and you'll see how it can go wrong.
The IR are coming down heavily on aviation at the mo looking for reciepts for everything to prove that the allowences that are in place are justified! With Gordon Brown wanting to claw back as much money through tax as possible to pay for bailing out the banks I would be very wary to go down this route however there is a chance they may not back back date the tax so its a gamble!
Self employed is the other way, collecting your money, putting some passed for tax and NI. Oh and thats if you wanna pay class 1 NI. You can claim back deductions for various things like anr headsets if your company dont have them, replacment uniform (not intial uniform purchase), hotels and transport when working out of base, car parking to name a few!
I know your a semi clever lad
so have prob seen this but if not check it out.Airline pilots: industry wide FRE for 2006/07 onwards: summary
There are 2 things guaranteed in life, death and paying taxes so I personally dont understand why people try to get away not paying any. With that get a good accountant, they are worth their weight in gold and will get the best in terms of deductions from your tax bill.
As for myself I went down the self employed route and have put away half of my expected 18k tax bill next year. If its less than that I'm away on holiday with the change!
Oh there is also a parasol company which you could work through but again is in a very grey area!
kempus
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HM Revenue & Customs: Home Page
This is a good place to start.
Get in touch with a tax inspector and get a two way communication going. Believe it or not, they are actually very helpful and will suggest all the allowances and expense claims that you are entitled to.
If you go this route, at least you are always going to be legal!
Don't evade as you know very well that you have to pay tax somehwere.
This is a good place to start.
Get in touch with a tax inspector and get a two way communication going. Believe it or not, they are actually very helpful and will suggest all the allowances and expense claims that you are entitled to.
If you go this route, at least you are always going to be legal!
Don't evade as you know very well that you have to pay tax somehwere.
