Aircraft and tax

[kgwilson]

A homebuilt or owner maintained RAAus cant be used for hire and reward. I don't know if invoicing yourself thing would fall into this category but it might limit which aircraft you can choose to use. Perhaps a call to RAAus.Talk to a good accountant. The better way is for the business to own the aircraft and you pay for the time you use it for personal use. That way the costs associated with maintaining currency and training are covered by the business.

It wouldn't be used for hire or reward or commercially and it doesn't matter if it is factory built or amateur built just as long as it is registered and maintained in accordance with regulations. Just like the Ute it is an owned asset that when used for business purposes the costs associated with it are tax deductable. So if the hourly rate is all inclusive of operating costs, maintenance and depreciation that is how to do it. You can note this in the aircraft logbook and your own pilots logbook and photocopy the pages with the appropriate hours used for legitimate business purposes & give these to your accountant along with the detailed calculations of how the hourly rate is determined.

 

 

[jetjr]

You could get the business to pay for the whole lot and then pay FBT on the small personal use estimate you provide.

 

Unlike vehicles theres no standard rates or schedules for reasonable deductions for aircraft.

 

 

[Oscar]

It wouldn't be used for hire or reward or commercially and it doesn't matter if it is factory built or amateur built just as long as it is registered and maintained in accordance with regulations. Just like the Ute it is an owned asset that when used for business purposes the costs associated with it are tax deductable. So if the hourly rate is all inclusive of operating costs, maintenance and depreciation that is how to do it. You can note this in the aircraft logbook and your own pilots logbook and photocopy the pages with the appropriate hours used for legitimate business purposes & give these to your accountant along with the detailed calculations of how the hourly rate is determined.

Be VERY careful as to what CASA rules as 'commercial use' - therefore 'airwork'. I believe that a plumber was pinged on a ramp check, at Toowoomba, some years ago, because he had his tools of trade in his aircraft and was flying to a job.

 

He wasn't taking a paying passenger; the aircraft was not under hire. Prima Facie, the use of the aircraft was no different to the use of work boots for walking to the job - but CASA prosecuted him.

 

This is an area where RAA needs to get seriously involved and lobby vociferously for sensible application of definitions of what is 'airwork' and what is 'using the aircraft'. If, for example, you as a local take on a 'contract' to patrol the local beaches for sharks using your Foxbat/Gazelle/Lightwing/Jabiru as the platform for delivering that service in exchange for costs and a bit on the side for your time: is that 'airwork' for the aircraft? I would argue not; if you advertise for "Sharkspotting Joyflights " for which you charge, then yes, it is.

 

RAA class aviation is being strangled by regulations against its utility for the social good by a CASA that has no imperceptive other than to limit its liability.

 

We need to fight this - and fight it hard.

 

 

[frank marriott]

Oscar

 

The "goods of trade" (as you would obviously be aware) has been an issue for ever between Pvt Awk Chtr.

 

Personally I wouldn't go anywhere near it with RAA rego (i.e recreational flying ). But I guess there is always someone prepared to push the fact, just not me under the "current" regs.

 

 

[Oscar]

Frank: ABSOLUTELY!

 

And it's bullsh#t.

 

If my use of the aircraft involves offering services to persons that involve them taking off in my aircraft - then it's 'airwork'. My competency as a pilot, and the airworthiness of my aircraft is germane to the safety of the person who elects to sit in the RHS to witness what it is that I am trying to sell to them. The flight., is part of the sales pitch.

 

HOWEVER: if I fly into the Birdsville races with a batch of T-shirts advertising the latest Camel Race hero - the clientele does not have any direct interaction with my flight. If I head for the Watchamacallit Opal Mine with some parts to keep its generator running and the tools to install them, (plus my expertise to do the job); - nobody but ME is involved in the flight.

 

What we have here - is a failure to tell CASA to get real. A plumber does not need any special registration for his vehicle nor licence to use his ute to go to a job. His ( or her) transport is of NO BLOODY IMPACT on the job - and if he (or she) chooses to use a skateboard AND a backpack - it is still a claimable tax deduction. If he (or she) breaks the traffic rules - than that is a desperate issue.

 

IF an RAA aircraft operated by a RPC pilot can provide transport from A to B that happens to result in a commercial advantage for the pilot and does not intrinsically have value for itself from the participation of a paying third party - what is the problem?

 

If you think all that is simply fanciful: how would commerce prosper if document courier services by push-bike in the CBDs were restricted to those who had a high-level licences and bikes that were registered as comercial vehicles?...

 

 

[SDQDI]

I don't always agree with you Oscar but that is exactly how I feel about it all. (Except I don't really call a traffic violation a "desperate issue")

 

I didn't end up claiming any of my aircraft for business but have been known to use some farm small engine fuel to get me by every now and then:whistling:. So yes maybe some farm fuel has been inadvertently used but otherwise it is all down as personal. My main worry was, when going through the buying/building process, what would happen if the ATO did an audit and somehow it got casa involved how deep would I be in trouble? IMO as the rules stand I wasn't willing to risk it.

 

It is a horrible grey area that could do with some tidying up. If I was to fly some spare parts from one farm to another to fix one of our machines while contract harvesting I would theoretically be breaking the law which I think is silly.

 

 

[facthunter]

How you operate is no different from if you had a private licence and your own private plane. As far as the ATO are concerned you could be a burglar and claim the cost of your Jemmy and the get away car. Your plane could (Theoretically) be unregistered and you unlicenced. That is not the tax offices concern, But you might get into proceedes of crime etc. IF you go to the same place of work every day you can't claim the cost of going there but if you work at all sorts of places you get to claim the cost of going from your normal place of work to the other places.. Just tell CASA you carry tools to make the plane fly better in rough air. You aren't carrying tools to compete with parcel express or UPS. Nev

 

 

[nig71]

I can see CASAS issue with the plumber as most tradies charge for travel so it could be argued that he was being rewarded for his flying directly. Another way tradies charge is to charge per hour of travel at tradesman rates as it is reasonable that they could have stayed in town and earned that rate instead of sitting in a vehicle; so you are paying for their skills as such. It is possible he had an officious beaurecrat and a poor lawyer . Isn't the question that are we being rewarded financially for flying. On a farm the financial reward isn't direct. Can't you get a mustering or even crop dusting endorsement on ppl? As long as you are not being paid to do it. This maybe the plumbers issue; he was being rewarded by a third party for his flying

 

If I need a commercial license to fly to a field day where I may purchase something that will benefit my business then casa could ping everybody apart from tourists. The vast majority of GA aircraft owners probably are involved in business travel largely because of the expense of aircraft ownership puts it in the league of professionals and business owners.

 

 

[Oscar]

But, it shouldn't be CASA's concern that you might be charging for the flying. CASA isn't charged with administration of the economics of flying, it is charged with the safety of ( and though not explicit, I believe it is strongly implicit), in order: fare-paying public who cannot be reasonably expected to understand the risk involved in stepping into various classes of aircraft; 'people on the ground' who cannot in any way protect themselves from the results of a crash, and finally - actual aviators who CAN be either: a) reasonably be expected to understand the risk involved and/or b) are in a position to be made aware of the risks ( as in the Jabiru disclaimer situation).

 

I see no distinction between the case of a tradie charging for the travel he/she undertakes, on a standard private licence in a standard 'private'-registered vehicle - your average dual-cab ute, for instance. ( Yes, they would be registered as for business purposes, which as far as I am aware does not require any special rego requirement but is mainly for tax purposes and perhaps some slight increase in Third Party cost (perhaps on the assumption that they will do more than the average private vehicle kilometers and therefore have a greater annual exposure to causing third-party claims?? - I don't know exactly how that works).

 

Provided your plumber / diesel mechanic etc. is flying completely within the limitations of their licence and the aircraft operational limitations, I cannot see how there is any increased level of safety concern. One argument put forward by CASA some years ago, was that because a 'service' or 'commercial' type flight was involved, the pilot might be tempted to take additional risk. That is an assumption - not a demonstrated safety issue. To follow that logic, anybody flying with any sort of intention to get to Point B within an implicit schedule (even if that is simply 'get-there-itis) would be charged for getting into their aircraft to commence the flight!.

 

I mean this seriously: if CASA's reasoning is that because you are undertaking the flight as part of delivering a service, or some goods, you 'might be tempted to fly in an unsafe manner', then the next logical step is ramp checks of the 'where are you headed and what is the purpose of your flight?' 'Um - I'm headed for Woop Woop to attend my daughter's wedding'. ' Is this wedding being held at a scheduled time, sir?' 'Well, yes, it's been planned for months, Church booked, all that sort of thing''

 

'Then I require you to step out of the aircraft, sir, and I am serving you with a penalty notice for 'intent to fly without due regard for safety' (or some such similar 'offence'.)

 

That scenario is only a small step away from the current situation in which those using their Recreational aircraft flight as part of a 'commercial' purpose (that does NOT include a 'fare-paying passenger ' component - I have no particular issues with THAT being 'airwork') are likely to be pinged.

 

 

[Nobody]

I think that we need to be careful to not invent rules that dont exist.

 

Have a read of CASR 206. Nothing in it prevents a plumber from flying out to a site with his tools. There is nothing stopping you from returning from a feild day with your purchases.

 

The rules arnt great but they arn't as restrictive as some here believe.

 

http://www.austlii.edu.au/au/legis/cth/consol_reg/car1988263/s206.html

 

 

[Tucano]

Just read link quickly BUT

 

If you are selling kits then carrying brochures and advertising paraphernalia to a show - illegal?

 

 

[johnm]

CASA for flying & appropriate license

 

ATO for tax

 

 

[DrZoos]

So if they can't be used for any commercial advantage or trade, how then does CASA allow display of RAAus aircraft from manufacturers and importers at flyins... do they travel there on truck?

 

The act linked above is pretty clear, I think, however, I would say these aircraft breach it so its consistently not being enforced. Once a law is consistently not being enforced, that can become a legal defence. This in itself can become a precedent.

 

It wouldn't affect the finding of guilt, but it could certainly reduce the sentence / penalty for breach.

 

 

[Nobody]

So if they can't be used for any commercial advantage or trade, how then does CASA allow display of RAAus aircraft from manufacturers and importers at flyins... do they travel there on truck?The act linked above is pretty clear, I think, however, I would say these aircraft breach it so its consistently not being enforced. Once a law is consistently not being enforced, that can become a legal defence. This in itself can become a precedent.

 

It wouldn't affect the finding of guilt, but it could certainly reduce the sentence / penalty for breach.

Flying an aircraft to a flyin for the purposes of display is not a commercial operation under CASR206 that I linked to above. Taking a stock of bolts to sell at the flyin would be.

 

 

[Oscar]

I suspect that carrying advertising material - that you give away -to a show is not going to attract attention.

 

Flying a 'demonstrator', probably wouldn't either - UNLESS you actually sell it, in which case it is 'goods for trade'. Stick a 'for sale' sign in the window, and you could just be looking at trouble.

 

In theory, a plumber's tools per se are not 'goods for trade' - but a tap washer held as inventory would be.

 

Where this all goes somewhat t!ts-up, is that CASA notoriously applies its regulations to mean what it WANTS them to mean - NOT what they actually say. That situation has been a matter of combat between a number of professionals in the industry and CASA itself, for years. Look at the record recounted in the Forsyth Review of Parliamentary inquiries into CASA actions - in recent times, there has been more than one per year on average!

 

What is needed, is a clear distinction between activities that inherently pose a risk to 'third parties', and those that do not. As Nobody has stated above, 'taking a stock of bolts to sell' at a fly-in would be a clear breach of the existing regulations: yet the test SHOULD be, whether that action constituted a safety risk.

 

 

[jetjr]

Yep stupid, setup

 

Any aircraft with a for sale sign at an airshow needs an AOC to get it there if it sells, but not f it doesnt.

 

Can i get one just for a couplpa days for last week?? Howmuchizit.

 

Pure BS

 

Sounds like CASA logic though, if your successful, ie sell a few planes, you deserve to be punished.

 

 

[Nobody]

Any aircraft with a for sale sign at an airshow needs an AOC to get it there if it sells, but not f it doesnt.

FFS!!! We have enough CASA rules without making up more fictional ones. Which part of the CASA rules says what you have said above?

 

 

[SDQDI]

FFS!!! We have enough CASA rules without making up more fictional ones. Which part of the CASA rules says what you have said above?

In the link you put up earlier Nobody

1 a (viii)

 

Basically says that any goods that are for trade becomes a commercial operation

 

 

[Nobody]

In the link you put up earlier Nobody1 a (viii)

 

Basically says that any goods that are for trade becomes a commercial operation

Carriage of goods, yes. Not flying the whole aircraft!!!!

 

 

[DrZoos]

If they sacked CASA and employed Australia's most undereducated people, it would certainly improve.

 

 

[SDQDI]

Carriage of goods, yes. Not flying the whole aircraft!!!!

But if you were an aircraft dealer and you flew a plane to a show to sell it surely casa would lump that with the flying for commercial purpose?

Personally I think that is stupid and have never heard of anyone enforcing such nonsense but stranger things have happened.

 

I agree with Oscar, for people that are using a plane for work to transit from a to b or to fly tools (I've been called a tool before) around I think it is overkill to class it as commercial.

 

 

[Gnarly Gnu]

Instead, he suggested that I bill the business for any legitimate costs associated with this. I.e hourly rate.

Sorry Phil I don't quite get how this would work. So it goes from being a claimable business expense to a taxable income in that you then get to pay income tax on the hourly rate you paid yourself? Presumably you would charge yourself GST also? I might be missing something here, not big on accountancy at all.

 

 

[jetjr]

The more illogical regulations and unworkable or wasteful on costs are introduced the more people ignore and break rules

 

It is a factor that those who choose to act illeglly then choose to ignore other regulation they might otherwis have followed

 

Once people loose respect for managers and regulators, compliance drops sharply.

 

 

[Jabiru Phil]

Sorry Phil I don't quite get how this would work. So it goes from being a claimable business expense to a taxable income in that you then get to pay income tax on the hourly rate you paid yourself? Presumably you would charge yourself GST also? I might be missing something here, not big on accountancy at all.

Just claim it as an expense, like you would if you hired casual labour.

 

That's my understanding.

 

PHIL.

 

 

[facthunter]

Unless you are making a business out of selling aircraft, flying it to a place where it is displayed for sale shouldn't incur the attention of CASA. They do have FORM though, and are sore losers with Your tax money behind them. Nev