UK Pilots’ Tax Rebate Guide

UK pilots are entitled to specific tax relief from HMRC that many fail to claim fully.

From uniform maintenance to professional subscriptions, the aviation industry has unique allowances that can significantly reduce your tax burden.

The standard fixed rate expense allowance of £1,022 for uniformed pilots is just the beginning – additional claims for travel expenses, equipment, and training can further maximise your rebate.

As a pilot, navigating the UK tax landscape requires specialised knowledge of the allowances and reliefs available to you.

This guide for UK pilots provides clear, actionable information on pilot tax relief, breaking down complex HMRC regulations into simple steps.

With proper planning and documentation, you can significantly reduce your tax burden and keep more of your hard-earned income.

What tax refunds are available to UK pilots?

Pilots can claim tax relief on various expenses. You may need to provide proof of your expenditure based on whether you’re claiming a fixed rate allowance or the specific costs incurred.

Fixed rate expense allowance (FRE) under EIM50050

The fixed rate expense allowance is specifically designed for uniformed commercial pilots and co-pilots and other uniformed flight deck crew.

It is designed to cover job-related expenses without requiring detailed receipts and is worth:

£1,022 per tax year

It specifically covers uniform cleaning, currency commission, duplicate passport, torch, CRP5, knee board, trifold, chart plotters, mileage scale rule, atlas, protractors/ dividers, pens, travel iron, calculator, stopwatch, clipboard, flight case, reference material, and sunglasses.

Fixed rate expenses allowance for travelling under EIM50060

In addition Pilots can choose to claim an extra £110 without receipts when travelling to:

Medical examinations, Flight Simulator sessions, Technical refresher sessions, Crew resource management training (CRM), Emergency and safety equipment training (SEP) and Fire and smoke training (F&S).

Cabin crew have their own fixed rate expense and guidance which our cabin crew tax guide covers.

Claim actual costs of uniform, equipment and travel

Pilots have the choice of claiming either the flat rate expense for uniform etc or the actual cost of what the FRE covers.

HMRC states: “if a pilot wishes to obtain relief for the actual costs of other allowable items in a particular tax year they cannot take advantage of the FRE.”

Receipts should be available for the actual costs and a claim sent to HMRC.

HMRC gives the same option for the flat rate expense for travelling stating:

“Pilots are not obliged to accept the £110. Any who can show that their allowable expenses of travelling to those events exceed £110 per year are entitled to relief based on their actual, vouched expenses (or mileage allowance relief based on their actual mileage) in respect of such journeys.”

It’s ultimately down to each pilot to decide which way to claim after taking into consideration the pros and cons of each.

BALPA and professional membership tax relief

HMRC has made an agreement with The British Airline Pilots’ Association to allow tax relief on membership fees.

BALPA members can reclaim tax on 67% of their membership fee which is a saving of £408 for higher rate taxpayers.

Pilots belonging to the IPA are entitled to tax back on half of their annual subscription fees.

This tax relief no longer applies if you are reimbursed by your employer for this work expense.

Allowable expenses pilots can claim for

Beyond the FRE, pilots can claim for expenses that are “wholly, exclusively, and necessarily” incurred for their job, including:

• Uniform laundering costs.
• Noise-cancelling headsets (if not provided by employer).
• Navigation flight computer.
• Sunglasses (specifically for professional use).
• Flight case.
• Stopwatch.
• Travel and subsistence (if not provided in full by your employer).
• Costs related to temporary workplaces.
• Mileage costs for job-related travel (not regular commuting).
• Accommodation costs when away from base (if not covered by FDA).
• Professional development.
• Professional subscriptions.

Important Note: HMRC expressly states that the cost of luggage for airline pilots is NOT an allowable expense for tax purposes.

Flight duty allowances (FDA)

Flight duty allowances and sector pay are designed to cover costs incurred during time away from your base. These allowances are typically agreed upon between airlines and HMRC.

If the standard FDA doesn’t cover all your expenses, you can in theory submit individual claims based on your actual expenditure, but you must keep meticulous records to support these claims.

How much tax relief can you claim?

The amount of tax relief you can receive varies according to your tax bracket, with different rates offering distinct levels of returns on your claims.

Basic-rate taxpayers (20%): For every £100 you claim in expenses, you’ll receive £20 back from HMRC. This means you get one-fifth of your claim returned.

Higher-rate taxpayers (40%): When claiming £100, you’ll get £40 returned. This equates to two-fifths of your claimed amount coming back to you.

Additional rate taxpayers (45%): A claim of £100 will refund tax of £45. Which is nearly half of what you have spent.

You don’t get back the full cost of what you have spent but a refund does provide welcome financial relief for work-related expenses you’ve had to pay for personally.

Essential documentation for your pilot tax claim

For FRE Claims

For fixed rate expense claims, you don’t need to provide receipts or detailed documentation.

It’s best practice to maintain:

• Proof of your employment as a pilot.
• Evidence of your uniformed status.
• Details of any reimbursements already received from your employer.

For additional expense claims

For claims beyond the FRE, maintain comprehensive records including:

• Detailed receipts for all purchases.
• Bank statements showing payments.
• Mileage log for job-related travel.
• Employment contract showing your base location.
• Training certificates for professional development claims.
• Calendar/diary documenting dates of work-related travel.

How do you submit your pilot tax refund claim?

You can claim tax relief via:

• Self-Assessment tax return (mandatory for claims exceeding £2,500) or if you already complete a tax return for a reason other than claiming tax relief.
• Personal tax account with HMRC for claims under £2,500 and you want to submit online.
• Form P87 for claims under £2,500 and you want to post your information to HMRC.

How can tax code adjustments benefit pilots?

Following a successful tax rebate application, HMRC typically revises your existing tax code to incorporate any flat rate expenses you’ve claimed.

This proves advantageous as the allowance becomes automatic, eliminating the need to submit claims for each subsequent tax year.

Your updated tax code instructs your employer to lower your taxable income, resulting in reduced tax deductions from your regular pay.

HMRC will inform both you and your employer about the revised tax code. It’s important to verify the code’s correctness which you can do by using your personal tax account.

Tips for maximising tax rebates

• Claim for past years. Pilots can claim the FRE and other eligible expenses for up to four previous tax years.
• Keep comprehensive records.
• Maintain a dedicated folder for all receipts and documentation.
• Use a digital system to scan and categorise receipts.
• Record mileage immediately after travel and consider using a mileage app.
• Understand your employment status.
• Different rules can apply depending on whether you’re employed (PAYE) or self-employed.

Common tax scenarios and solutions for pilots

Scenario 1: Newly Qualified Pilot

Situation: You’ve recently qualified as a commercial pilot and have purchased various equipment for your new role.

Solution: Keep all receipts for equipment purchases. Claim capital allowances for eligible items like noise-cancelling headsets. Ensure you’re at minimum claiming the full FRE allowance of £1,022 plus the additional £110 for travel to training.

Scenario 2: International Pilot

Situation: You regularly fly international routes and incur various expenses in different currencies.

Solution: Keep detailed records of all expenses, including currency conversion fees. Consider using a dedicated credit card for work expenses to simplify tracking. Document subsistence costs that exceed your FDA.

Scenario 3: Training and Professional Development

Situation: You’ve paid for simulator training and professional development courses.

Solution: If these expenses weren’t reimbursed by your employer, keep all receipts and certificates. Claim tax relief on these costs as they are “wholly, exclusively, and necessarily” for your job. Also claim the travel costs associated with attending these courses.

Maximising your tax position as a pilot

Understanding and utilising the available tax reliefs can significantly impact your take-home pay as a UK pilot.

By maintaining proper documentation and claiming all eligible expenses, you can ensure you’re not paying more tax than necessary.

Remember to claim for past years if you haven’t already done so, as this could result in a substantial rebate.

For complex tax situations, consider consulting with a tax professional who specialises in aviation industry tax matters to maximise your benefits while ensuring compliance with all HMRC regulations.