PPRuNe Forums - View Single Post - Pilots self-employed for tax purposes.
View Single Post
Old 12th Aug 2009, 11:27
  #24 (permalink)  
Hasdrubal
 
Join Date: May 2009
Location: China
Posts: 35
Likes: 0
Received 0 Likes on 0 Posts
Any UK based pilot working under contract with BRK should get themselves an Irish company and none of this McNamara nonsense either.

Set up an irish company

The payments from BRK are paid to the company

become an employee of the company

put yourself on a salary of about €35k, you would need to pay around €450 to the Irish government in tax per month. The rest of the cash can be put on deposit by the company if you want. (You can get a sterling bank account paying sterling interest rates if you want)

Under Irish tax rules you will be entitled to claim expenses such as your away form base expenses and also over night and travel allowances.

At the end of the year any cash left that you were not able to claim tax free pay it as a bonus to yourself and pay some more Irish income tax. Alternatively you could leave it in the company. Under new Irish tax rules any new company does not have to pay tax on its profits for the first three years of trading.

The other option is to put it into a pension. All of the UK pension companies operate in Ireland and a decent broker would set you up in a fund that will get full tax relief in Ireland and also be transferable to the UK for free when you finish with Ryaniar.

Under the cross border relief you will not need to pay any further tax or national insurance in the UK (this is set up for people working in the border counties in Norther Ireland and the republic who might cross into the other country to work but would also be available for pilots.

under vies rules you will get yourself out of charging vat to BRK in the UK.

There is no IR35 equivalent in Ireland so any legitimate expenses are allowable,

Your only risk with this is currency risk. You could have a euro and sterling bank account in Dublin and with internet banking and free transfers between both accounts so long as you keep an eye on currency movements you should be able to transfer lump sums when the sterling rate against the euro is favorable and back again if you want then it is not.

It sounds like a long winded process but there are accountants in Dublin who will do it all for you and I have found one that is doing it for less than £1,500 a year regardless of your income level.

I am not an accountant but this is eactly the scheme that has been put in place for a young friend of mine who is an FO with Ryanair. My own accountant dealth with the accountant in Dublin for him to set it up and he is happy that everything checks out and is tax comliant in the UK.

There are specific tax rules between Ireland and the UK and for a contractor, particularly one working for Ryanair, those rules shoudl be used to reduce taxes for as long as the loop hole is there.
Hasdrubal is offline