Dutch Ryanair pilot loses court case vs tax man: not deemed self-employed

[Ian W]

Originally Posted by Avenger

Yes I quoted UK law ad there was a suggestion that HMRC would come out guns blazing which is not the case, they don't care, as for other states, that's another issue. Even the Dutch guys at NAS are trying to claim back taxes in NL for training costs etc so we shouldn't be surprised

I am not sure it is a question that HMRC 'don't care', it is more that they don't think it is worth the effort. But, all of a sudden one of the HMRC inspectors can decide to investigate and it can be a rather painful experience. In a previous contracting existence an acquaintance was running a rather involved scheme that was legal but being paid via intermediaries. Taxman just presented a 5 figure demand and said you owe us this so we are taking it. It took several years for him to get a proportion of the money back. Similarly a group of contractors under one agency were running a similar scheme, Belgian tax decided that their scheme was invalid and demanded several years back tax from over a hundred contractors to be paid immediately.
The tax laws are arcane and fundamentally different in each European country and their approach is different again to other countries. IR35 put the onus on the contractor to pay all the national insurance and 'employer' taxes as HMRC considered the contractor was the one 'avoiding' tax. In the US it is different and if the IRS decides that a contractor is really an employee they chase the employer for all the relevant employment taxes.

So my experience is that these clever schemes are OK, until they are not. The tax authorities can unravel them very rapidly and backdate their tax demands in a financially painful way.