A global traveller lives his childhood dream

Lars is an airline pilot from Norway. Lars decided he wanted to become a pilot because Norway can get pretty cold and even though he loves to ski, he has always wanted to get away and travel. His background is quite humble, his parents not having much money meant Lars never flew as a child. Lars dreamed of escaping and becoming a pilot, eventually he decided to become one. Lars joined the army and became a jet pilot there, only to leave after a little while to train as a commercial jet pilot, which he has now been doing for around ten years.

The special case of pilots

As you may know most pilots today work as contractors and are not employed by airlines, which saves the airlines social security contributions. Lars basically operates as a limited company, as a one-man band. He uses his UK Limited Company to bill the airline he is working for on a monthly basis.

Lars travels around 80% of the year, which is more than 200 days out of 365. This is important for his tax situation and means he doesn’t pay much tax at all. Operating as a company is very useful in this situation; you can set it up quite cheaply, with the advantage of paying no income tax. This is particularly interesting because Lars is in no country long enough to pay taxes there. Instead, he pays the annual corporation tax for his company, but no income tax. Oil rig workers find themselves in a similar situation.

Limited Company in the UK

Lars has chosen to set up a limited company in the UK because it’s a lot cheaper than running a company in Norway. In Norway there is a lot of bureaucracy and the corporation taxes there are significantly higher than in the United Kingdom. This is a model used by a number of clients in the same situation. We have a number of airline clients who use a limited company as a means to serve invoices and carry out contracts. Lars’ story is a classic contracting example: he has one client, the airline he works for, and he uses his limited company for billing and administrative purposes.

How we help Lars

What we do for Lars is essentially bookkeeping, accounting, his company tax returns once a year, and that’s pretty much it. A very straight forward client, whom we can help live the dream of travelling without having to worry about the complicated tax situation of a global traveller.