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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Airline pilots: industry wide FRE for 2006/07 onwards: 2005/06 and earlier years: example

In 1996/97 the Inland Revenue agreed with a particular airline that its pilots and co-pilots should receive a FRE of £500 per year for five years, beginning in 1997/98. The last year covered by that agreement was 2001/02 but the FRE continued to be applied for subsequent years. Negotiations to renew the agreement did not begin until 2004/05. Those negotiations were still ongoing in January 2006 when the new, industry wide FRE was agreed.

In accordance with the agreement with BALPA, and EIM50057, the HMRC office conducting those negotiations may now agree deductions for 2004/05 and 2005/06 based on the following amounts:

2005/06 Basic FRE £800 plus travelling expenses £100
   
2004/05 Basic FRE £780 plus travelling expenses £100

The additional relief due as a result of this agreement may be given as a composite coding adjustment in 2006/07.

Note that no further relief should be agreed for the years when, though the original agreement had expired, no active negotiations were in progress.

Note also that if the employer makes a contribution towards the employees’ expenses, or provides significant items of equipment, the basic FRE should be reduced accordingly (see EIM32736 and EIM50059).