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Are My UK Flights Tax Deductible?

Can I claim my flights to the UK to teach as a tax deduction? If so, should I claim them?


As an Aussie teacher making the move to the UK to teach, you of course want to try and save every penny you can to help in your trip. After all, it can all add up (and might help fund an upgraded European trip during the summer holidays!)

One benefit of being an Aussie teacher moving to the UK is that you have the ability to claim your travel to the UK as a tax deduction. If you pay $1000 for a one-way flight with Qantas, this can be claimed as a tax deduction to help you save on tax (and increase your take home pay.)

But is it worth it?

To claim this tax deduction you need to register with an outsourced payroll company called an 'umbrella company.' This allows you to claim legitimate tax deductions and decrease the amount of tax you pay. Let’s look at your tax savings a bit closer. There are 3 forms of tax you pay with an umbrella company:


1) Employer’s National Insurance Contribution (ERNIC)

  • If you aren’t with an umbrella company, this is what your agency should pay instead of you


2) Employee’s National Insurance Contribution  (EENIC)

  • This is what you pay regardless of if you’re with an umbrella company or not


3) Income Tax


The National Insurance Contribution is similar to a Medicare levy here in Australia. Traditionally you only pay for your NIC (Employee’s NIC), however when you register with an umbrella company you also have to pay your employer’s NIC too. This means the weekly Employer’s NIC cost is passed on to you which saves your teaching agency, assuming you work 5 days a week, about £65 per week. This is the main reason why so many other teaching agencies are keen for you to register with an umbrella company!

Assuming you pay $1000 for a one-way flight to London, let’s break down your savings over a 2 year period:

ERNIC Tax Saving:  £73
EENIC Tax Saving:  £63
Income Tax Saving:  £105

Therefore if you register with an umbrella company and claim your flights as a tax deduction, you save £241 over a 2 year period (about £2.30 a week).

The downside is that it costs you far more to register with an umbrella company. Not only do you have to pay your employer’s NIC (which your agency has to pay if you are paid by them directly), you also have to pay a weekly administration fee to the umbrella company. This amount can differ but it is on average about £20 per week.

All up you have to pay approx £80 per week (PER WEEK!!) to be paid through an umbrella company. The only real financial upside is that you can claim your UK flight as a tax deduction which, over a 2 year period, totals just over £2 per week in savings.

You’re therefore £78 worse off – per week - by claiming your flight as a tax deduction.

It may seem attractive, however being paid through your agency (via PAYE, or pay as you earn), is still the most financially viable model for most teachers relocating to the UK for work.

At Protocol Education we do not make it a requirement that teachers register with an umbrella company, nor do we financially penalise those who choose to be paid directly through our PAYE payroll team. We have our own payroll department and pay you directly - not through an outsourced umbrella company - so your take home pay is maximised when you work with Protocol Education. 


Tags: Umbrella companies, flights, teaching in London

Category: Australian Teachers

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