Ryanair are an Irish comapny. The pilots fly for ryanair. All of the pilots are effectively under the control and direction of Ryanair, they are provided with the tools, told where to go, how to do their job etc. etc.
For all intense purposes the contractors are employees. Therefore if the irish tax office had the appitite for it they would force Ryaniar to make all of the contractor pilots employees. However, they know that it would be a long and protected effort to make it happen and in these ecomonic times it is hard for the irish tax office to justify the expense of a high court action against Ryanair to force them to take on the pilots where, even if they were successful, ryanair could just up sticks and move to another country and emply contractors anyway.
Therefore when the Irish tax office knocked on MOL's door he told them the contractors were nothing to do with him and that they woud have to talk to brookfield. To cut a long story short the irish tax boys told BRK that they would allow the situation to continue provided they clean up the tax affairs of the pilots.
This is how it became an Irish tax issue even though the pilots' contract is with a UK company. The true relationship is between the pilot and Ryaniar. BRK is just a conduit.
Ancedotally from a few different sources I have been able to establish that afer the pressure came on BRK went to meet the Irish tax office. DD brought along one of the three accountants from the list. From the tax office itself the word is that they knew DD hadn't got a clue about tax, and in fairness why would he, but that he had "completely bought in" to the multi director company model that Mcnamara had sold him. Basically he fell for the line of bull**** that he was fed by the accountant and his greedy little eyes lit up at the prospect of replacing his lost income from the cut in rates imposed by Ryanair on him with commission from the accountants.
There is no way in hell that his scheme is approved by the Irish tax office. My accountant has told me that for the Irish or UK tax offices to "approve" the multi ditectro company model is for them to approve Ryanair and Brookfield employing contractor and also to "approve" the terms and conditions of that employment. To do so would prevent them from ever taking a case agaisnt either company to force them to make the contractors full time employees or else to make them change the terms and condition under which the contractors are employed. It is also in breach of EU employment laws so they can't approve it.
So if DD tells you that the multi director model is the only one approved by the Tax office he is talking b@ll@x and you should ask him to show you proof. If he does I will eat my mothers hat.
Our accountant here in the UK actually called the Irish Tax office and they told him that any method that ensured the tax compliance of the contractor was "acceptable" to them.
Acceptable and approved are very different. A multi director company and a one man comapny are both acceptable. neither are approved and neither will ever be approved.
It is worth too much to BRK to allow the pilots their legal entitlement of appointing the accountant of their choice. If there are 500 active contractors earning an average of £70k per annum, if BRK were getting even as little of 1% of the 3% fee being charged to each pilot by the "approved" accountants then it is extra income of £350,000 for doing nothing.
I am sure there are other accountants in both ireland and the UK who would happily pay DD for the pleasure of providing tax advice to his contractors. If they can provide a better service to the contractors then I think the pilot should be allowed to use them.
My friend and now a few of his colleagues still hasn't gone with Mcnamara and is doing all they can to find some way of avoiding it and paying the extra taxes.
I suppose for DD to admit he was taken in by the advisers who managed to persuade him that their way was the only way and that they would make it worth his while to give them a virtual momopoly. At the end of the day as has been mentioned on this post before if Mcnamara et al make a mistake it will not be their problem it will be Brookfield and Declan Dooney's problem. For the sake of a few pieces of silver he has set himself up for a massive potential loss.
He is not an accountant or a tax adviser and he has tried to run with a few guys who are a little bit sharper than him when it came ot tax and they have done him up like the proverbial kipper. Not only for the pilots sake but for his own he should stop the nonsense now and just allow the pilots to make whatever tax planning provisons that they want.