Edgar
| Jurisdiction | UK Non-devolved |
| Judgment Date | 01 January 2011 |
| Neutral Citation | [2011] UKFTT 245 (TC) |
| Date | 01 January 2011 |
| Court | First Tier Tribunal (Tax Chamber) |
[2011] UKFTT 245 (TC)
John M Barton, WS (Chairman), James D Robertson, CA
John E Sutton FCA, Goldwells, Nairn, for the Appellant
Mrs Joyce Ballingall, for the Respondents
Income tax - deduction for expenses - airline pilot - expenses incurred for issue of a licence with the civil aviation authority - Income Tax (Earnings and Pensions) Act 2003, Income Tax (Earnings and Pensions) Act 2003 section 343s. 343 - appeal refused
1.The Appellant ("Mr Edgar") made a claim under Income Tax (Earnings and Pensions) Act 2003 section 343s. 343Income Tax (Earnings and Pensions) Act 2003 ("ITEPA 2003") in respect of the expenses incurred for issue of a licence with the Civil Aviation Authority. The general expenses amounted to £17,382.60 with travelling expenses of £2,611.68, of which £8,691 and £1,304 were set against his earnings for the year 2006/2007. Her Majesty's Revenue and Customs ("HMRC") allowed expenses amounting to £2,518 and disallowed the balance of the general expenses amounting to £6,173 and all of the travelling expenses. The Tribunal refuses Mr Edgar's appeal against that decision.
2.A Notice of Appeal had been lodged on behalf of Mr Edgar on 4 May 2010. A Statement of Case was lodged by HMRC, and the Appeal was set down for hearing at Inverness on 21 March 2011.
On 27 October 2010, a Direction was issued whereby HMRC were required to lodge with the Tribunal two copies of a bundle incorporating inter alia all the documents on which each party intended to rely. Two copies were duly lodged with the Tribunal.
3.The documents in the bundle were as follows:
(A) Items 1-51, comprising correspondence between the parties.
(B) Items 1-71 comprising other documents, namely a list of receipts and other invoices, Mr Edgar's Tax Return for the year 2006/2007 and the Notice of Appeal with accompanying papers.
(C) Items 1-20 comprising documents supplied for Mr Edgar.
(D) Items 1-8 comprising the relevant legislation, namely Taxes Management Act 1970 section 9A section 28A section s49B section 50 subsec-or-para 6ss. 9A, 28A, 49B and 50(6) of Taxes Management Act 1970 and Income Tax (Earnings and Pensions) Act 2003 section 333 section 336 section 337 section 343s. 333, s. 336, s. 337 and s. 343 of ITEPA 2003.
(E) Items 1-50 comprising the following Reports:
(F) T Haythornwaite & Sons v Kelly TAX(1927) 11 TC 657,
(G) Ansell v Brown TAX[2001] BTC 381; 73 TC 338,
(H) Hinsley v R & C Commrs SCD(2006) Sp C 569,
(I) R (on the application of Weston) v IR Commrs TAX[2006] BTC 166; 76 TC 207.
(J) Statement of agreed expenses for airline pilots.
4.In the course of the hearing, Mr Sutton lodged documents (C) 21-23 which had previously been sent to HMRC, and documents (C) 24-25 comprising conversion requirements for airline pilots, and a statement showing the extent of mutual recognition of airline pilot licences.
5.Mr Sutton led the evidence of Mr Edgar; Mrs Ballingall did not lead any evidence for HMRC.
6.The material facts, which were not in dispute, were as follows,
(2) The Civil Aviation Authority ("CAA") regulates all aspects of aviation in the UK. Its responsibilities include the licensing of flight crew.
(3) The CAA had directed that:
(4) A person shall not act as a flight crew member of a civil aeroplane/helicopter registered in a JAA Member State unless that person holds a valid licence and rating complying with the requirements of JAR-FCL and appropriate to the duties being performed, or an authorisation as set out in JAR-FCL 1.085/2085 and/or 1.230/2.230. The licence shall have been issued by:
(5) A JAA Member State; or
(6) Another ICAO Contracting State and rendered valid in accordance with JAR-FCL 1015/2015 (b) or (c).
(7) Mr Edgar is a UK citizen. He lived and was resident in South Africa for a number of years during which time he paid for and obtained a South African Commercial Pilot's licence. Between 2001 and 2006, he was engaged in flying commercial aeroplanes in Southern Africa.
(8) It was Mr Edgar's intention to return to the UK. South Africa was not a JAA Member State; and in order to continue his profession as an Airline Pilot, Mr Edgar was required to carry out additional training to become qualified to carry out commercial flights within the UK. In anticipation of this, Mr Edgar started a distance learning course in 2005.
(9) Upon returning to UK in 2006, Mr Edgar was required (in terms of the CAA regulations) to undertake theoretical knowledge instruction as determined by an approved training provider and pass all the relevant theoretical knowledge examinations. He was also required to undertake flying training and pass the relevant skills test. Mr Edgar went to Atlantic Flight Training, which is one of three training companies approved by the CAA.
(10) The particular course that Mr Edgar was required to undertake and the number of flying hours were less than for any pilot starting from scratch as he had already obtained much of the required experience through his South African Pilot's Licence.
(11) Mr Edgar became an employee of Highland Airways on 24 July 2006.
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(12) Prior to that date, Mr Edgar incurred the following expenses:
Headset repair
£92.71
Bristol ground school - Distance learning (Module 1)
£1,100.00
Books and online question bank
£101.89
Bristol ground school - Distance learning (Module 2)
£800.00
Bed and Breakfast × 12 nights (Ground Refresher Course)
£180.00
Accommodation (While taking exams)
£140.00
Online Question Bank
£50.00
Pilot Jobs Network registration
£4.65
Civil Aviation Authority, Exam fees
£330.00
Bed and Breakfast × 11 nights (Ground Refresher Course)
£254.00
Accommodation (While taking exams)
£35.00
Flying Course Statement
£11,725.51
FCL Licence: CPL (A) Skill Test
£691.00
FCL Licence Rating: IR (A) Record Skill Test
£691.00
Licence Issue
£362.00
Hire Car (Job Interview)
£108.81
M6 Toll Charge (Interview)
£3.50
Bed and Breakfast (Interview)
£30.00
M6 Toll Charge (Interview)
£3.50
Suit, shoes and tie for...
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