Single vs twin insurance

mostly a UK problem

This is off topic but every modern country must have a “benefit in kind” attack otherwise every businessman would buy a Ferrari (or whatever) on the firm, apply the maximum capital allowances, reduce the firm’s corp tax bill, and use it mostly privately. And then do the same with a house, everything in the house, his wife’s boob job, everything in his private life paid by the firm. And a plane on the firm too, operated most for non-business flying. I believe the Isle of Man has no BIK but they are a very unusual case.

And given that there must be a way for the Revenue to defeat this sort of thing, there must be rules in place which place limits on what is allowed.

Peter wrote:

This is off topic but every modern country must have a “benefit in kind” attack otherwise every businessman would buy a Ferrari (or whatever) on the firm, apply the maximum capital allowances, reduce the firm’s corp tax bill, and use it mostly privately.

Yes, exactly, that’s what you can do under German tax law. As long as the car is produced in a “serial production”, it can be a company asset (if purchased) or expense (if leased/rented). The private use can either be calculated by maintaining a journey log (the standard case) adding 1% of the car’s new list price as virtual income on your personal income tax. That rule (1% of new value) is the reason there are only new cars around. The rule is specific to cars but it works basically the same way with the aircraft other than there is no 1% rule so you have to agree on something with the inspector. Boats on the other hand are generally exempted from being considered a company expense.

I see no correlation between a pilot name on the insurance and “benefit in kind” though.

1% Wow! In Ireland, the BIK is 30% of the original new value of the car is treated as additional income. (That includes company paying all running costs & fuel).

The company’s deduction is limited to €24K (over 8 years) irrespective of the actual cost of the car.

Well guess why Germany is the country of the car. No law passes that would come in the way of the car industry.

But it’s 1% per month, not per year. If your dT is let’s say 38% and your car costs new 50 000 €, it’s 50 000 € * 0.12 * 0.38 = 2280 € tax for unlimited use of the car, usually including fuel, cleaning and maintenance (paid for by the employer, you get fuel cards from an oil company). That is not much for a factory new car and therefore most company offer cars to their employees.

For aircraft you have to establish a private/business split with the tax inspectors. You have to provide flight logs, convince them of the business nature of those you declare as business flight and then they will agree on a %age with you. Both the airplane and you have to be instrument rated.

achimha wrote:

I see no correlation between a pilot name on the insurance and “benefit in kind” though.

I don’t either.

Emir,
So I understand the reasoning of your insurance company is that it’s MTOM (and not value) of the aircraft is what influences the premium.
That sounds pretty illogical. Logical would be that the increase is caused by the fact that your aircraft would cause 2 more holes in the roof of the house you landed it on, or actually 3 more because of the high horizontal stabiliser
Seriously, this does not make sense. If they would use a statistical figure of some sort that light twins create more havoc than light singles, good, but this smells of just ripping you off because you can afford a twin. Please give them some heat and don’t give in too easily even though you can afford it..

This was about third party liability. And the potential damage one can make to third parties is related to MTOW.

It may be that damage to third parties has some correlation with MTOM but there are many more factors at play that make the risk profile of singles vs twins different., and that probably drown out the MTOM effect. That’s why one should simply use statistics when they are available.

Doesn’t 3rd party also pertain to passengers? I would wager that the average number of passengers per twin is higher than for a single, even if the number of seats is the same.