As a professional airline pilot or flight crew, managing your finances and staying compliant with tax regulations can be time-consuming and challenging. At ESDG Accountancy, we offer a comprehensive range of accountancy services tailored to meet the needs of both pilots and crew, whether you operate on a salary basis or through a limited company.
Personal Tax Returns for Salaried Pilots and Airline Crew
For pilots or crew members on a salary, we provide assistance with personal tax returns. Our Chartered Accountants ensure that you claim all the relevant allowances and reliefs, minimising your tax liability while remaining compliant with HMRC regulations. We offer support throughout the year, staying up-to-date with changes in tax legislation and advising you on the best practices.
All pilots (and all other employees for that matter) who earn in excess of £100,000 or are self-employed must complete a tax return each year. The tax year runs to the 6th April each year, and a tax return is due by the end of the following January (giving you just under 10 months to get it sorted – although it’s best practice and helps with tax planning to get it in much earlier than this!).
Flat Rate Expenses Allowance for Pilots
As a pilot, you may be eligible for a Flat Rate Expenses (FRE) allowance to cover the cost of maintaining and replacing essential work equipment. Per HMRC, the standard FRE allowance for pilots is £1,022 per year, and may be extended by an additional £110 in some circumstances. By claiming this allowance, you can reduce your taxable income and keep more of your hard-earned money.
Limited Company Contracting for Pilots
If you’re contracting as a pilot or trainer through a limited company, our accountancy services can help you navigate the complexities of managing your finances. This model has become increasing popular over recent years as employers have more flexibility than hiring employees – the good news is that this option can often be more lucrative for the pilot too as long as you understand the trade off of job security a typical employed role may offer.
Being a company director, in addition to submitting a personal tax return you must also file Statutory Accounts and a Corporate Tax return for your limited company each year. We often recommend your company year end reference period should be in line with the personal tax year to make tax planning straightforward.
A important tax planning matter which should not be forgotten is ensuring the optimum salary for limited company directors is set each year. At ESDG Accountancy we take care of this and advise you on the most efficient remuneration structure, typically being a mixture of salary and dividends.
Limited companies bring other tax benefits for airline pilots such as the ability to claim a greater range of business expenses – this may include mileage to a temporary place of work or a one-off Christmas party expense (even if it is just a small gathering!). As part of our all inclusive Limited company accountancy service we look out for these opportunities for you and advise you how you can maximise your after-tax income.
Our limited company services include but are not limited to:
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- Limited company formation and registration.
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- Bookkeeping and accounting including providing Pandle cloud accounting software.
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- VAT, Corporation Tax and Director Self Assessment Tax Returns.
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- Payroll services
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- Year-end statutory accounts and tax returns
In addition, we of course provide strategic tax planning, helping you minimise your tax bill each year and achieving your long term business and financial aims – staying well within the boundaries of the law of course!
FAQs
1. Can pilots claim tax relief for professional subscriptions and training costs?
Yes, pilots can claim in-part tax relief on professional subscriptions to organisations like BALPA. Additionally, training costs for maintaining or upgrading licenses can often be allowable where certain conditions are met – however these should be looked at on a case-by-case basis. ESDG Accountancy can help you identify and claim these reliefs on your personal tax return.
2. Can pilots claim tax deductions for travel expenses and accommodation costs?
In certain circumstances, pilots may be able to claim tax deductions for travel expenses and accommodation costs related to their work. This includes travel to temporary work locations, training courses, and other work-related events.
3. What are the implications of the IR35 legislation for pilots contracting through a limited company?
IR35 legislation aims to ensure that contractors operating through a limited company are not disguised employees, and are in-fact genuine contractors – taking on the risk that comes with that. If a contract is determined to fall within the rules of IR35, then the individual must pay the appropriate amount of tax and National Insurance Contributions on their earnings. ESDG Accountancy can help their clients determine their IR35 status and provide support to manage any potential impact on your tax situation.
Let ESDG Accountancy handle your accountancy needs, so you can focus on what you do best – flying.
Contact us today to find out more about our accountancy and tax services for pilots.
