Paying back bond - tax?

[ClintonBaptiste]

I have just resigned from my current employer and I owe them around £7000 for my current type, as I was bonded for 3 years.
As this money has technically gone towards training, is there any way to offset this against tax? The company are wanting me to pay it off in one go before my final day. So any way of reducing the amount would be great.
Thanks in advance for any help in this matter.

Cheers

[Brainy330]

Bonds longer than 1 year are frowned upon within the EU. I know of several cases of people taking these matters to court here in Germany. And all of them got out without paying as long as they stayed at least one year after training. Before coughing up the money, speak to a legal advisor

[2 Whites 2 Reds]

Frowned upon maybe, but legally enforceable as you are deemed to have entered a contract and therefore contract law will likely prevail. That's come from BALPA's legal people as well as my own after looking into this a few years ago.

Get your own advice is my shout but beware, this is a small industry and a good dispute resolution lawyer will fleece you for £7k before you can say 'Bond' should you choose to fight it.

As for the tax, I'm not sure you'll be able to offset it against your personal liability but if you're unsure it's worth a quick call to HMRC. They're pretty good these days!

All the best

[arketip]

Originally Posted by Brainy330

Bonds longer than 1 year are frowned upon within the EU. I know of several cases of people taking these matters to court here in Germany. And all of them got out without paying as long as they stayed at least one year after training. Before coughing up the money, speak to a legal advisor

That's one of the reasons quite a few companies now have the pilot pay the rating when they join.

[Avenger]

"HMRC’s stance is that no deduction should normally be permitted under Section 336 ITEPA 2003 for expenses incurred by an employee for external education. This is so even where the subject of the education is closely relevant to the nature of the employment. The expenses are not deductible because they are not incurred in the performance of the duties of the employment."

In simple terms, if the type rating was done by the employer as "part of the performance of the duties" then there may be a slim chance , on the other hand if the type rating was given by a "third party" and your contract states " on successful completion of the rating etc etc" , in other words your "contract of employment " started after completion of the rating then the answer is No. Of course this assume you have an employment contract and are paying tax within the HMRC environment, if you are working abroad than forget it.

[RAFAT]

Been there, seen it, done it, the answer is no. That was the answer from both my Accountant and HMRC.

The document mentioned above by Avenger refers.