When acquiring a private jet for your business, you’ve got to consider everything from staffing and maintenance to cost analysis, tax implications and how to create a company policy regarding its use.
It’s important to understand the tax and liability implications of how you use your jet, as well as who is on board. It’s also necessary to discern what constitutes business versus non-business use of your company’s jet, and to know how to properly document all use of the jet for tax reporting purposes.
Part of that documentation needs to include the full names and title of each passenger, and whether each is relevant to the business purpose of the trip.
For example, if a spouse of an executive goes along for a business trip, the spouse is not directly relative to the business at hand. So any costs associated with allowing the spouse would be non-deductible.
Virtually anyone with permission is allowed to travel on your company’s jet — after all, it’s your company’s private aircraft.
But there may be tax implications to your decision about who can and can’t fly, which is why it’s important to develop and enforce a thorough company policy and procedure for approving all trips and passengers.
Why Who’s On Board Matters
Your company’s private charter jet is meant to be used chiefly for your employees and clients to quickly and efficiently carry out business trips.
But part of building a trusting and mutually respectful relationship with your top executives and clients is to give them some perks.
To help foster a positive company culture,
- Family members of employees & clients (as long as the employee/client is also on board).
- Close friends of top executives & clients (as long as the executive/client is also on board).
- Important business partners and individuals with whom you’re building a business relationship.
You should keep in mind that the more non-business-related individuals who are allowed on any given flight, the fewer expenses of said flight that can be deducted.
Those expenses may include everything from fuel and staffing to maintenance and aircraft devaluation.
Guidelines for Non-Business Passengers
You may want to introduce guidelines for screening individuals before allowing them to fly, especially if they’re not immediate business relations like employees or clients.
These guidelines are up to your company, its board, and legal and accounting counsel to determine.
Ultimately, the purpose of any screening process is to protect your company and its employees and clients. Guidelines could help protect you from the risk of an incident on-board, or help protect the privacy of your employees.
For example, if you allow someone on board who increases the chance of an accident, your company could be held liable on the grounds of negligence from an insurance and/or legal standpoint.
Consult with your aircraft insurance provider when considering any guidelines for determining who can and can’t fly on your jet.
Decision & Enforcement
Once you’ve determined your company’s general policy about who can and can’t use the private jet, you’ll want to develop a procedure by which the policy will be enforced.
The procedure should be developed with the counsel of your company’s attorney, accountant, and an expert in flight safety standards and current FAA regulations.
The enforcement of the procedure could be handled by a human resources officer. Or if you’re a small company, a manager or CEO can help enforce this procedure.
Unless the person responsible for enforcing the approval procedure has experience in this kind of work, your company should provide training to the individual.
This training should cover all the details of the procedure, the company policy regarding use of the jet, and all implications of not following said policy.
Getting Your Business Off the Ground
If you’re looking for professional guidance to help craft your company’s new private jet policy, look no further than the experts at Mountain Aviation.
Mountain Aviation has decades of experience in helping companies find and acquire the right aircraft to fulfills their needs and suits their budget.
We can help with every step of the policy drafting process, plus can store, maintain and even fly your jet for you. And we know the ins and outs of complying with FAA regulations, so we can guarantee that every flight is by the book.
As a jet operator, safety is our business. You’re in good hands when you work with us.
But don’t take our word for it. We’ve got the industry track record to prove it.
Mountain Aviation has the coveted ARG/US Platinum Rating. This prestigious rating covers every facet of Mountain Aviation’s flight operations and is one of the highest ratings for “safety and excellence in service” the aircraft industry can offer.
And in our 20th year of business, we were awarded the National Business Aviation Association (NBAA) Safety Award for our track record and high standards. More recently, Mountain Aviation joined the Air Charter Safety Foundation, supporting the highest levels of safety in the aviation industry.
Interested in learning more about how we can help your business get into the air?