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In general, engineering is a complex industry which relies on specialist expertise within the engineering sector, resulting in a demand for specialist accountancy support within the aviation industry.

Airline pilots largely enjoy a significant amount of flexibility when tailoring their career path due to the ability to select certain modules or courses when attaining their commercial pilot’s license. However, attaining an official commercial pilot’s license demands many hours of dedication and so it is understandable that when pilots are finally licensed, one of their concerns is to ensure they are working efficiently from a finance point of view.

For this reason, the idea of operating as an independent contract pilot is common. This methodology of employment offers substantial benefits mainly being able to dictate where and when you work, with many contracts offering different time scales so that you may tailor how long you are contracted with any particular company. Furthermore, contracting as a pilot means that you can experience working with a range of different companies without committing to just one so that you can find the one which best suits your lifestyle. Related to this, operating on a contractual basis enables you to establish a strong network of contacts by liaising with different companies.

Aside to this, employment as an independent contractor pilot facilitates worldwide opportunities and the exhilaration of being on standby to travel anywhere in the world with relatively short notice. With this in mind, there is a consensus that although employed pilots may receive a number of benefits from their chosen aviation company, independent contract pilots have the potential to receive greater rates of pay. In fact, due to the current economic situation, some companies are somewhat reluctant to employ full-time pilots due to the financial commitments associated with long-term contracts. This has increased the demand and rates of pay for contract pilots working independently.

Operating as a limited company

Similarly, to other contract workers, independent or contract pilots have the choice to operate through their own limited company or via an umbrella agency. Operating through a limited company offers increased control of financial management and tax efficiency. Although operating through a limited company demands increased levels of responsibility and financial administration, this is often difficult for pilots who experience unconventional working hours and are in demand worldwide. Despite this increased responsibility, the benefits of operating as a limited company are summarised below:

  • Compared to working with an Umbrella agency, operating as your own limited company typically offers the possibility for higher take-home pay
  • By working as a limited company, you are able to claim on a larger range of expenses, with training courses, uniform, pilot materials and meals often being encompassed as claimable expenses
  • Most contractors opt for the flat rate VAT scheme to maximise extra revenue per annum. Working as a limited company offers the ability to apply for the flat rate VAT scheme
  • An obvious benefit of working as a limited company is complete control of your business and financial management. This offers greater availability for tax planning
  • Increased control and greater opportunities for tax planning by efficiently reviewing financial statements throughout the year

Of course, operating as a limited company increases the demand for the time dedicated to the financial management of the business accounts and maintaining accurate records of expenditure and claimable expenses. It is also difficult to adhere to changing legislations and be aware of the appropriate paperwork to provide as evidence of company expenses. Many pilots have voiced that they often struggle to find the necessary time to financial management due to work commitments. Or despite the numerous advantages over traditional employment, many pilots find the burden of paperwork associated with establishing a limited company off-putting.

To overcome these small obstacles and enjoy the opportunity for higher rates of pay, many independent contract pilots are now opting to liaise with specialist engineering accountancy services to minimise the stress associated with increased volumes of paperwork and adhering to government legislation.

By working with a specialist accountant dedicated to your limited company, the volume of paperwork can be significantly reduced. Other services an accountant who specialises in helping contractors are as follows:

  • Complete support with financial management, tax planning and maintaining the business accounts
  • Advice on superior and assistance with setting up online packages to effectively track income, expenditure, and outgoings
  • Stress-free submission of the required paperwork to Companies house per annum. With support offered for the filing of accounts, company tax and calculation of corporate tax
  • Assistance with other matters such as the provision of references for rental properties or any other guidance related to compliance

In summary, working as an independent contract pilot offers numerous benefits, particularly offering the potential to attain higher rates of pay. You may increase your tax efficiency by operating as a limited company. However, due to the complexity of the paperwork required, we highly recommended seeking advice from a specialist accountancy firm who can tailor their services to your bespoke demands.

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