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Flight club

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19 February 2013
Issue: 4391 / Categories: Forum & Feedback , Employees , Income Tax
A company, which requires extensive travelling by its employees, owns a helicopter. A director and 30% shareholder has the use of the 'copter, which is kept and maintained at a local airfield and is also used by a flying club there. The calculation of the director’s benefit in kind is reviewed

Mr X is a 30% shareholder and director in Y Ltd. The trade of the company requires the directors and other senior employees to do extensive travel at short notice often to destinations that are poorly served by commercial airlines.

Business has been good and in August last year the company purchased a helicopter at a cost of £310 000. It is used for business trips where other transport would be slow or difficult.

It is also used to transport potential international customers coming into UK airports to the company’s headquarters which is based at a small provincial airport.

To limit costs the local flying school/club manages the use of the helicopter. It provides discounted labour rates (at a 25% discount) on servicing and parts and pays the company £120 an hour to use the helicopter excluding fuel.

The flying school charges qualified pilots in the...

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