Airline Pilot Contractors, or ‘Independent Contract (IC) Pilots’ as they are more commonly referred to, really do have an interesting life, with demand for their services increasing.
According to the International Air Transport Association, air transport is set to double in the next two decades, which could signal a demand for airline pilots.
What are the advantages and disadvantages of being an Independent Contract Pilot?
- Personal Freedom to choose when and where you work -Some contracts can range from two months to two years, giving you the opportunity to choose how long you wish to contract for that company.
- Trialling different companies -Just like planes, not all employers are the same. Contracting means you get the chance to test out different companies before finally committing to one.
- Worldwide opportunities – A fantastic way to see the world, be prepared though that within the first year you will need to be on standby for the oddest hours of work, contractors often don’t get the pick of the crop when it comes to locations or routes. You’ll also have to be prepared to move at fairly short notice.
- Higher rates of pay – Although long-term benefits may be higher for employed pilots, independent contract pilots can often earn more money.
- The way in – Sometimes working as an independent contract pilot is the only realistic route into working for a specific company.
- Opportunity to build up contacts – Working for various companies will guarantee you a strong network of contacts.
- Ongoing demand for work – Due to the economy and the long-term financial commitments that come with hiring permanent members of staff, some companies are reluctant to hire full-time pilots which have to lead to an even stronger demand an increase in daily rates for independent contract pilots.
Operating through your own limited company as an Independent Contract Pilot
Independent Contract Pilots have the trading option, like any other contractor, of either working under an umbrella company, or through their own limited company structure, which is usually the most tax-efficient way possible.
All you need to start a limited company
Discover all the intricacies of contracting through a limited company with our free downloadable guide.
What’s in the guide?
- Understanding legislation – what is IR35 and what could it mean for your business?
- Maximising your expenses – find out what business costs you can expense through your company.
- Making your business a success – a look at how to manage your time, market yourself and make your business a success.
Advantages of trading through a limited company
- Higher take-home pay – You’ll typically take home around 75% – 80% of your contract by working through your own limited company.
- Claim on a wider range of expenses – Training courses, laptops, pilot supplies, uniforms, meals and much more, can be claimed as an expense. Visit our Contractors Guide to Expenses for more information.
- Entitled to the Flat Rate VAT scheme – The Flat Rate VAT scheme can generate thousands of pounds of extra profit per year, with most contractors choosing to apply for this VAT scheme. Visit the following page to read more about the Flat Rate VAT Scheme.
- Complete Control of your Business – You keep complete control of your financial affairs meaning you do not have to risk your money with any third party administrator or umbrella company.
- Ease of use – Running your own business isn’t difficult; submit a spreadsheet to your accountant – just like umbrella time-sheets and expenses. Working through your own limited company does require a certain level of admin commitment but typically most contractors tell us they spend around 15 – 20 minutes per month managing their company’s admin affairs.
- Greater opportunity for tax planning than PAYE Umbrella – It goes without saying that working through your own limited company is a most financially rewarding way to operate, which is only fair bearing in mind the extra responsibilities and loss of full-time employment benefits.
- Accountancy fees are often less than Umbrella Company fees – It seems strange but it’s true, many accountants charge less than umbrella companies, indeed SJD Accountancy offers one of the lowest all-inclusive fixed fee accountancy services in the UK starting from £120 plus VAT per month. Check our packages for more detail. Visit the following page for more information on Why clients choose SJD.
Contact SJD Accountancy
If you have any questions about working through your own limited company, our expert team is on hand to help.
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Disadvantages of trading through a limited company
- A certain amount of paperwork involved – As mentioned above, there is about 15-20 minutes of administration work required per month, not much more than that of an Umbrella Company.
- Accounts need to be filed every year – You have to file your accounts at Companies House each year, which will be on public record. However, your accountant will help with this. You will also have to file accounts, company tax and Corporation Tax calculations with HMRC every year, but again your accountant will help with this.
- Costly if contracting for a short period of time – Can be costly if you have a short-term contract (anything less than a couple of months but it does depend on your daily contract amount) then decide to go back to permanent employment as you will still be required to submit end of year accounts.
Finding work as an Independent Contract Pilot
The best way of finding contract work as a Pilot is through using recruitment agencies specialising in aviation careers, such as:
These companies upload contractor positions for some of the top Airline companies, from British Airways to Emirates Airlines to EasyJet. Always ensure that your CV that is uploaded with ‘scannable’ keywords and industry buzzwords for your particular industry, otherwise your CV might not be found. Visit our guide to writing a contractor CV for more information.
Forums are also a great way to get ‘word of mouth’ contracts from people within the industry themselves; it also brings you up to speed on the latest news within the Airline Industry. These are quite popular forums but are very US focused: Airline Pilot Forums and Airline Pilot Central.
Alternatively, you can try going directly to the source. This isn’t the easiest of options, but using social network sites such as LinkedIn are a clever way of finding a point of contact within any company to get a telephone number or email address to send over your CV.
Most Popular Pages
If you need any further help or advice try these most popular links.