BA lifts pilot overtime pay amid tax outcry

BRITISH AIRWAYS has been forced to increase its overtime pay amid complaints from pilots about the UK’s income tax regime.

The flag carrier is understood to have upped overtime pay from 1.25 times normal wages to 1.5 times to provide an incentive for pilots to work extra hours.

The pay of BA pilots varies significantly but many are susceptible to being hit by the UK’s highest marginal rate. Because the personal allowance is gradually withdrawn for incomes of £100,000 or more, those earning between £100,000 and £125,140 pay an effective rate of 62pc on every £1 of additional income they earn.

It means that their marginal tax rate is higher than those in the additional rate band of £150,000 or more.

Martin Chalk, head of Balpa, the pilots’ union, said: “Why is it argued that the additional rate of tax has an effective upper limit but those earning less than the additional rate are taxed at a significantly higher effective marginal rate?”

Dan Neidle, of Tax Policy Associates, said the rate “should be a source of embarrassment for the Government”. Pilots said that although overtime pay had been 1.5 times earnings occasionally in the past when there was a severe staffing squeeze, this level had not been constantly offered as is now the case.

Sources close to BA insisted that the change had been in force for some time.

BA insisted that any changes to overtime pay were not linked to the Government’s tax policy but were implemented in response to flight disruption and sickness.

A spokesman declined to comment further.