Company Ownership Structure for Light Aircraft

[Penguinracer]

Do any of you own your aircraft (G-reg) through a private company as opposed to outright private ownership in your own name? I'm not talking about the whole N-reg trust thing. I was thinking of VAT implications on importation, tax losses on running costs etc.

[Merritt]

Apparently you have to be VERY careful doing this as the IR see it as a Benefit In Kind. I don't know the ins and outs but I believe there are plenty of groups that have been caught out by it...

[Eric Mc]

If you make use of an asset owned by an entity (e.g. a limited company) other than yourself, then you are open to a Benefit in Kind assessment from HMRC.

Edited by Eric Mc on Tuesday 8th December 15:05

[Mattt]

Eric Mc said:

If you make use of an aseet owned by an entity (e.g. a limited company) other than yourself, then you are open to a Benefit in Kind assessment from HMRC.

Presumably exclusive use for travel to business meetings would be ok?

[Eric Mc]

Mattt said:

Eric Mc said:

If you make use of an aseet owned by an entity (e.g. a limited company) other than yourself, then you are open to a Benefit in Kind assessment from HMRC.

Presumably exclusive use for travel to business meetings would be ok?

The BIK would be charged on "private useage" element. HMRC would expect the company to keep adequate (and accurate) records to show which flights were business related and which were not.

The company would need to register as an "Employer" and submit the annual "Benefit in Kind"(P11D) returns. Failure to do so would result in penalties and possibly interest charges.

[Penguinracer]

Would it be possible to operate the company as one which provides aircraft for training purposes, use the aircraft for your own flight training (I have an aerobatic aircraft in mind) & pay the company an hourly rate based on useage but still be able to show an annual loss after running costs & have the benefit of avoiding VAT on importation. No doubt HMRC will apply a market value to the hourly rate to assess if there has been a P11D BIK. Often you see warbirds operated by single-purpose private companies & I mean an individual warbird not a just major collections like the Fighter Collection. I suppose they are in the business of hiring their aircraft for display & film work.

[Eric Mc]

You can do what you want - just make sure you jump through all the hoops, prepare and keep accurate paperwork and be prepared for the ensuing bureaurocracy.

It's perfectly doable.

[Geneve]

If you are importing and want to avoid the vat, and you are very quick, then check here

www.opmas.com

[Simpo Two]

Penguinracer said:

to assess if there has been a P11D...

In this context I found myself thinking - 'what aircraft is a P11D?'

[Merritt]

Penguinracer said:

Would it be possible to operate the company as one which provides aircraft for training purposes, use the aircraft for your own flight training (I have an aerobatic aircraft in mind) & pay the company an hourly rate based on useage but still be able to show an annual loss after running costs & have the benefit of avoiding VAT on importation. No doubt HMRC will apply a market value to the hourly rate to assess if there has been a P11D BIK. Often you see warbirds operated by single-purpose private companies & I mean an individual warbird not a just major collections like the Fighter Collection. I suppose they are in the business of hiring their aircraft for display & film work.

You would need to double check but I believe you would need to operate the aircraft under the public transport category with the CAA to do this.. A whole new can of worms.

See section 2.2.4 of THIS CAA DOC

[Eric Mc]

Simpo Two said:

Penguinracer said:

to assess if there has been a P11D...

In this context I found myself thinking - 'what aircraft is a P11D?'

It always amuses me, being involved in tax and being an aeroplane nut, the various "P" forms used by HMRC. As far as I know, very few of the commonly used current "P" forms equate to any famous US "P" series fighters from the 1920s - 40s.

P38 - Return of Part Time and Casual staff
P-38 Lightning

Edited by Eric Mc on Tuesday 8th December 21:24