We are proud of the high quality services we provide to members. Beyond the core industrial, legal, flight safety and technical issues, members regularly request information surrounding tax matters. Our work in this area over the years has made being a BALPA member fantastic value for money.
Pilots, like any individual, can incur obvious expenditure in respect of professional membership fees and annual subscriptions. However, if these costs are not settled directly by the employer, the employee may be entitled to a deduction against their taxable employment income.
In order to qualify for tax relief, the fee or subscription must be relevant to the employment concerned and the professional body involved must have been approved by HMRC. BALPA is listed as one such approved body, meaning that members can claim 67% of their BALPA subscription against their taxable employment income. That’s a good start.
Flat-rate expense allowance (FREA)
In addition to tax relief on subscriptions, BALPA secured an increase in the flat-rate expenses allowance (FREA) in 2013. With effect from the 2013/14 tax year, the rate was increased to £1,022 plus an additional £110 for allowable travel.
This is by far the most generous FREA of any industry in the UK and, coming on top of the agreed 67% deduction against a member’s BALPA subscription, it means that a member paying average subscriptions of £700 per year and paying 40% tax should be able to claim around £640 back from HMRC. Even better.
Add in the negotiated pay deals within each company year-on-year (of the 18 pay awards negotiated in 2016, many were at or above the rate of RPI inflation and the national average) That’s not to mention the £35million back-pay we have placed into members’ pockets since 2012 after success in the European Court of Justice on holiday pay.
And for those that haven’t quite made the grade yet, BALPA continues to call for the removal of VAT on pilot training and seeks to protect the benefits of new joiners in industrial negotiations as best we can.
The taxation of airline pilots is one particular area where we work to offer regular improvements to our members. Working in conjunction with our tax advisors, Crowe Clark Whitehill, we have recently updated and expanded the content of our tax advice service.
Our advice service links members to a reputable London-based audit, tax and advisory firm. Tax advisors respond to frequently asked questions on important matters such as tax relief on member subscriptions and how to go about claiming flat-rate expense allowance. This service is part of the BALPA membership fee and at no extra cost to members for brief answers to work-related tax queries.
This service is backed up by our free BALPA members’ tax guide, which has recently been reviewed and updated to take account recent changes in HMRC regulation. Changes of Government always bring new tax laws, but our tax guide booklet is as up to date as we can make it.
The guide provides a helpful overview of the UK tax system and examines the issues which are of greatest interest to pilots. The BALPA members’ tax guide, which can be downloaded by members for free here, includes useful information on:
• Income tax
• Important dates for submitting tax returns
• Fixed-rate expense allowance and your BALPA subscription
• Other employment expenses
• Flight duty allowances and sector pay (FDA/SP)
• Residence and domicile issues including statutory residence tests, the home base rule, and employer liability
• Sample draft claim letters, and expense forms
• FAQs and salary sacrifice
Ensuring BALPA members get good value for money is one of our many targets and through specialist tax advice, established industrial negotiations, professional engagement and robust legal representation we aim to ensure that being a BALPA member is always a good investment.
If you have any queries or comments about the tax guide, please email email@example.com
Posted on 06 December 2016