Peter wrote:
. In the UK, we have lots of stupid laws (“stupid” varying according to who you ask, obviously) but very few ambiguous laws.
Interestingly enough, some very important regulation (e.g. Financial market abuse) is just based on principles – essentially you are told the intent of the law (regulation? – I’m not a lawyer), and you have to make sure you comply with it. There is no “letter of the law” describing specific offences. The regulator sentenced a few people to jail / millions in fines, so it works.
In a system like the financial one, I’d rather have something like that than a very prescriprive regulation where lawyers “add value” by finding loopholes.
If you have general laws, which DO need interpretation, but also give more freedom, things are judged on a case by case basis according to the INTENT of the law and less the letter, because there are so few letters to go by.
Agree. I think (but not entirely sure) that in the old regulations the intent about cost sharing was explicitly written. The intent was also made perfectly clear in other documents and info. The intent was to be able to bring along family and friends and share the costs on a strictly non commercial basis. Exactly how and exactly what was shared was irrelevant as long as the real cost could be verified somehow. Hence advertising was not allowed.
What exactly is the intent of the EASA cost sharing regs? For clubs and renting facilities to operate the aviation answer to Uber? For what reason? And why shouldn’t this require a CPL? It obviously doesn’t work using your own plane, where you can share only a fraction of the costs, even if you bring along only family and friends.
I think the most likely (only?) large penalty that could come up from being on the other side of the grey line would have to do with insurance payouts. When looking at a certain grey area, I’m much more scared about the insurance not paying out rather than being fined what is likely going to be a fraction of that payout.
If you look at flying under N-Reg rules (e.g. night landing currency – FAA rules are more restrictive than the ones here) in the UK, the only real enforcer is the insurance.
Peter wrote:
The plane is Ltd Co owned, you own the company, you rent the (PA28) plane from the company for €1000/hr and then, under the old regs, carrying 3 passengers, you could recover €750/hr from the passengers. You paid the other €250/hr yourself. The company ended up with €1000/hr in its bank account. Take away expenses, say €100/hr, and you can draw out the €900/hr as a salary or a dividend. You pay tax on it of course, plus the non cost effective bit of paying tax on the (already taxed) €250/hr which you put in, but you still come out with a post-tax €500/hr or thereabouts, which is quite nice
As a tax and figures boffin, I’ll bite. You also have to pay VAT on the 250 €£ that you self-pay. That’s about 20 %, or 50 €£. So the computation, based on rates in “big and medium Western European countries” rates is:
Net left in your pocket, approx: 190 €£ in the UK, 80 €£ in France. And you have charged the passengers 900 €£ (750 €£ + VAT).
Obviously, if you do this “small scale” and have no other dividend income, you have tax-free bands, if your overall income is low you are into lower rate tax bands, you have reduced corporate tax for small businesses, etc.
Travelling with just a phone, but how about a non VAT registered company.
UK threshold is 85k gbp.
Peter wrote:
Travelling with just a phone, but how about a non VAT registered company.
UK threshold is 85k gbp.
It’s not realistic scenario because if you buy the aircraft which is above this figure and you sell it at one point in the time, you’ll exceed this threshold.
That 85k figure is for turnover is it not?
Normally wouldn’t the aircraft just be a capital addition?
Also if you did run as vat registered you would then recover the VAT on fuel, maintenance, parts, hangarage, etc.
The company doesn’t have to own the plane.
Off_Field wrote:
hat 85k figure is for turnover is it not?Normally wouldn’t the aircraft just be a capital addition?
In my understanding, selling the aircraft is a VAT-taxable transaction. But maybe since you sell a VAT-paid asset (you didn’t deduct VAT on the purchase, nor on maintenance, nor on enhancements), it doesn’t count in your VAT turnover. Not sure. Anyway, in my understanding, if you liquidate the company instead, and you sell the aircraft yourself, sale of the aircraft would not incur VAT.
Peter wrote:
how about a non VAT registered company.
The company’s expenses go up by 20%; your personal outlay is 50 €£ less. My computation leads to about 225 €£ net in the UK, and 120 €£ in France, for having charged 750 €£ to the passengers.
Peter wrote:
The company doesn’t have to own the plane.
I’m not sure who you would own the plane.
Anyway, the company would have to rent it, then. You end up with a company that rents the aircraft to the owner for… 100 €£/hour, and then rents it to you for 1000 €£? Just so that you can “cost share” the 1000 €£ instead of cost sharing the 100 €£? That’s so blatant, you wouldn’t stand a chance in any proceeding / court.
