EIM50057 - Airline pilots: industry wide FRE for 2006/07 onwards: 2005/06 and earlier years

The agreed industry wide FRE for 2006/07 onwards is:

FREs should not be applied retrospectively (see EIM32725). However, in this instance where negotiations were already taking place to uprate an existing, locally agreed FRE, the amounts now agreed for 2006/07 can be used as a basis for agreeing the deductions due for the years in which those negotiation have been carried on.

In these circumstances only, the 2006/07 figures can be scaled back as follows:

Treat the 2005/06 figure as £800 (not £850) and scale it back by inflation. On that basis, figures for earlier years would be

2005/06 £800

2004/05 £780

2003/04 £760

The £100 for travelling expenses need not be scaled back. This is because relief for travelling expenses is based on the authorised mileage rate, which has been 40p per mile since 2002/03.

There is an example of a "scaling back" exercise at EIM50058.

Note that scaling back should only be agreed in cases where an existing, locally agreed FRE was already under active review in January 2006 (the date of the agreement between HMRC and BALPA). If no review was in progress employees will qualify for the new, industry wide FRE for 2006/07 onwards, but no additional relief should be given for 2005/06 and earlier. The existing, locally agreed FRE should be applied for those periods. If no review was in progress, the only way employees can obtain additional relief for earlier years is by making a claim based on their actual, vouched expenses (see EIM32715).