Ryanair Brookfield False Self Employment?

[Airspeed Low]

The issue of Ryanair contract pilots raised in houses of parliament as 'false self employment' in order to avoid national insurance and holiday pay. Looks like a pilot has approached his MP.

Those of you interested click the link below to radio 4 iplayer. Move to 20mins 40sec to listen to the recording of MP raising the issue in Westminster. Despite the title of the link it will work taking you directly to the Today programme recorded Sat 5th March 2011. The show is available until 0900 UTC 12th March.

BBC iPlayer - Today: 05/03/2011 (http://www.bbc.co.uk/iplayer/episode/b00z1z5s/Today_05_03_2011/)

Any comments?
Consequences for Brookfield pilot's or Ryanair?

Edited to provide further details on above link:
Should you experience difficulty listening to this go to BBC iplayer, radio shows, 5th March, Today programme, 0700am show, 20mins, 40 secs into recording.

[Mikehotel152]

Sorry, I couldn't get your link to work. But try this:-

BBC - BBC Radio 4 Programmes - Today in Parliament, 04/03/2011 (http://www.bbc.co.uk/programmes/b00yz55t)

at 5m05s.

[flap1]

very interesting Issue!
according to the ie. spanish Social security, a pilot can not work as a self employed unless he is the owner of the acft.
I belive in other countries this rule also apply.
A lot of, let's say, not legal contracts around Europe, folks!!
What is the EU doing about this?
What are the Unions doing about this?
Usually, pilots who work for brokers as self employed to fly another's acft do not belong to any Union and if they do.... nothing happens.
Someone should do something to STOP this !!!

Let's get our rights back folks!!!

[VJW]

Mike hotel where is this section in the link you sent? Not 20min 40 seconds in?

[Airspeed Low]

Guys, it is on 5th March NOT the 4th. See BBCiplayer, radio shows, sat 5th March 2011, Today programme 0700, 20mins 40secs into show.

BBC iPlayer - Today: 05/03/2011 (http://www.bbc.co.uk/iplayer/episode/b00z1z5s/Today_05_03_2011/)

[stuckgear]

good to see BLAPA's sterling work on the issue coming forth. :yuk:

[YYZ_Instructor]

Even better try here.... Player (http://www.parliamentlive.tv/Main/Player.aspx?meetingId=7734)

Starts at position 14:31

for all those that can't get it on BBCiplayer :ok:

[VJW]

I must be going blind, I only see dates for 3/4 7 or 8....

[Airspeed Low]

Ok guys sorry, the link above were for mobile iplayer, this one will work for normal pc:

BBC iPlayer - Today: 05/03/2011 (http://www.bbc.co.uk/iplayer/episode/b00z1z5s/Today_05_03_2011/)

I will amend links above to correct them.

[Kirks gusset]

So what's the problem? If the Pilot believes he is not self employed, all he/she has to do is fill in a tax return and pay the tax and NI. This is a bit of a nonsense, I don't know anyone, in any profession that is rushing to the doors of the Revenue to pay tax! The self-employed status conditions have been around for years, pick and choose hours of work, responsible for profit and loss etc, these guys know this when they sign up through the agency... and I think you will find, the Agency Contract states the " contractor" is responsible for their tax status/declarations.. sounds like sour grapes. If the person does not want to fly 900 hrs, expects to have months off, phone in with a broken finger nail etc.. don't work for a lo-co, infact, get out of aviation. Even CX have a very strict sickness, holiday, tax policy, it's not just Brookfield and RYR. There are many, many CX pilots UK based, paying no tax as their duties start out of UK. We have to decide to get off the fence and protect the industry or protect the moaners..simple...

[d105]

As with all things Ryanair I'll be keeping an eye on this to see how it evolves.

However as far as I can tell the only ramifications will be for UK pilots at the moment.

[GusHoneybun]

This legislation has been around since 2000. Do a search on IR35. It hit the IT contractors big time back then and it sounds like Customs and Excise have set their sites on Ryanair now. Brookfield pilots are disguised employees for Ryanair.

I can tell you from bitter experience that the Customs and Excise set the rules, change the rules on a whim, and then apply them back dated however they please. They don't forget about you, and are happy to hit you with a claim for, what they consider, 7 years unpaid tax.

[Mikehotel152]

Mike hotel where is this section in the link you sent? Not 20min 40 seconds in?


On my link it's at 5min.

[Hudson Bay]

I'll be sending the inland revenue my Brookfield Contract. That should make for some interesting reading.

[Kirks gusset]

Evidence of what! That they are not paying tax! get real, these guys know the score and if they are judged to be employees and have to pay tax at source, are they going to leave Ryanair.. of course not.. As for these contracts not being legal.. complete rubbish.. they are legal, the obligation is on the contractor to sort out their own affairs.

[Kirks gusset]

Midnight Cruiser, I am not " woefully uniformed" The regulations tightened up and basically, if you are for instance UK based, you are subject ""Legally"" to UK tax, even if you are self employed in the real sense, i. e not a scam, you will pay probably tax. The Agency engages the Pilot as a self -employed contractor, therefore, on paper, the " contractor" is liable for their own declarations. The arguement on this thread is as the " Contractor" does not meet the criteria for being self employed, either UK or wherever, hence they are an " Employee" and should have the tax burdens AND RIGHTS of an employee.
My simple rationale is that no-one likes paying tax, and are these people really going to go running to the revenue, possibly muddy the waters with their company, who then potentially has an Employers NI and other liabilitities? and, as pointed out Irish tax liability.. likely not, they want A) a Job, B) as much money as they can get.
I also appreciate that many of the guys on these schemes have a huge training debt burden and any improvement in their finances helps reduce that burden, the last thing they need is a kick in the guts for 30% plus tax. This principle prevails regardless of the airline or the Agency.

[skyloone]

Kirk

I think you've missed a couple of things. Not all contractors sole objective is to reduce all tax liability. Should you try this for long enough it'll come back to bite you. In this circumstance you have an individual who requires an income and a willing client. The contractor provides a service and charges accordingly. There is never a problem normally. However the rules within the Brookfield contracts and the way they are implemented are incompatible with IR35. Take the time to look at IR35 and some past judgements by the courts.

You mention that if you are UK based then that's where you pay tax. Well FR claim that you work in Ireland as you're aboard and Irish registered AC. So all the uk based guys working through Irish companies pay tax where?... Yes Ireland. However all the uk based Ryanair contract folk pay tax where? Yes UK!! Bingo my friend.... Same base, same rank, same roster, only a slight change in legal status or not... It's going to be fun!!! Brookfield guys, do yourselves a favour and make sure you are paying a reasonable amount of tax and have your ducks in a row. IF needs be, get IR to look at your status and ask where you stand. I know one chap who's had IR contact him about this Ireland deal.

[Kirks gusset]

Some fair points, I agree with a " reserve fund" incase you need to pay the taxes, however, this whole Irish tax situation is a mess, look at the Cityjet guys that thought they were having the taxes stopped, then get a big bill form UK Revenue. One reasonable question? Has any of these " Contractors" spoken to Brookfield and got a resolution?
What about the AEU guys working through PAS? or the TUI guys working through Contractair? Same boats, just different sails!

[Mikehotel152]

Guys, get advice from accountants please...

I've got an Irish and UK lot.

[jayc004]

I think Kirk that you will be surprised at how many people would give up the BRK contract to be on a perm FR contract.
There are many reasons, but most are to do with the fact that they are no longer having to worry about;
getting paid that month because they have done no hours
contract being terminated for no reason
protection from redundancy
pension
sick pay
holiday pay
not having to do a tax return
not having to worry about HMRC chasing you for £s
not having to deal with the Irish accountancy racket

Life is a lot easier, and people say you earn less on a perm contract. This is only true if you are not paying your tax properly.

[widered]

Jayc04 I think you hit the nail on the head here the majority of Brookfield pilots for Ryanair are reluctant contracters all the above points are all relevant.
Its about time Ryanair wake up to there responsibilities to their workers and treat us like a team instead of objects on a balance sheet.
There is change in the pipeline guys in Ireland and in the UK they cant run from the responsibilities forever.
Join your union and volunteer!!!

[757_Driver]

So what's the problem? If the Pilot believes he is not self employed, all he/she has to do is fill in a tax return and pay the tax and NI. This is a bit of a nonsense, I don't know anyone, in any profession that is rushing to the doors of the Revenue to pay tax! The self-employed status conditions have been around for years, pick and choose hours of work, responsible for profit and loss etc, these guys know this when they sign up through the agency... and I think you will find, the Agency Contract states the " contractor" is responsible for their tax status/declarations.. sounds like sour grapes. If the person does not want to fly 900 hrs, expects to have months off, phone in with a broken finger nail etc.. don't work for a lo-co, infact, get out of aviation. Even CX have a very strict sickness, holiday, tax policy, it's not just Brookfield and RYR. There are many, many CX pilots UK based, paying no tax as their duties start out of UK. We have to decide to get off the fence and protect the industry or protect the moaners..simple...Kirk - you are missing the point. IR35 was introduced to stop IT and engineering contractors doing EXACTLY what ryanair currently do. I know because I was a contract engineer for an automitve company at the time it was introduced. EVEN IF the FR pilot declares all his income and pays UK Tax and NI, this still leaves FR with a liability for the 12 odd % employers NI, and it was the avoidance of employers NI that IR 35 was introduced to combat
IR35 introduced a number of relatively common sense tests as to wether you are truly self employed or just trying to limit your tax liability. I can't imagine any pilot meeting these tests. For example can you choose when to work? nope, you have a roster. Fail. Can you send someone in your place to do the work? nope. fail. Do you work for more than one customer. nope all your work comes from one airline. Fail. etc etc etc.
Personally I will NOT stick up for the brookfield type deal as it is destroying the industry not protecting it. The rest of us work for companies that pay their employees, pay their tax and NI and can't compete with companies that use dodgy methods to reduce costs. We all have to pay tax, why should one section of the industry get away with paying none? and then use the financial advantage gained to price everyone else out of business. Personally I hope HMRC presents FR with a huge bill. (they can go back a long, long time once a liability is established)

Contract work has its place in any industry, and when used properly is a sensible solution to manage peaks and troughs of demand. But when 50 to 100% of your staff are on contract it is clearly being used for tax avoidance purposes, not prudent business management purposes.

[jayc004]

The only way that it is possible to stop this is to stop accepting these contracts.
I know it is an easy thing to say, and hard to execute.

Cadets come in, and pay for the rating, but they are already contracted to BRK at this point. The ONLY way to stop it, is to not accept the BRK contract BEFORE type rating.

Unfortunately, this will never happen as guys coming out of flight training are so desperate to get a jet job, they will do anything to sit in that seat.
How many threads are there on here asking what BRK pilots earn, how many hours they get, "what should I do about tax".
None of the new guys want to actually do any research, or even think about what is happening more then 3 months down the line when they finish line training and are a regular FO.
I know it is a horrible thing to say, and I know everyone has to start somewhere, but I find that almost all the cadets are young, most (and I know not all) have borrowed from the bank,(be it mum & dad or HSBC etc.), and need to pay it back.
I spent a lot of time looking at the pros and cons of this company, and the BRK contracts. I was not spoon fed the information (like some of the new guys almost expect), and spent a lot of time with HMRC working out what could and could not be done. At the end of the day, it all comes down to just HOW inside the grey area box of 'tax compliant' you are. We all know what the contract is, and BRK chop and change the terms whenever they feel like it.
I have a lot of friends who are still flying props, instructing, air taxi, cargo. Only some want to get into a commercial passenger jet as a couple of them have 4 stripes and are captains already! They refuse to pay for the rating, but are still working and enjoying life and earning money. Main thing is, they don't have that added debt of £30,000 that it takes to cover the B737 rating.

People have to realise that there is more to aviation then shinny new blue and yellow B737NGs, and certainly a better option then BRK and self funding.

[SR71]

I think I'd be happy to pay 90% tax for a year or two just to see MOL lose his £500 million fortune and suffer the ignominy of having to work to earn a living on a similar type of contract to that he devised for his pilots.

Perhaps I'd even have the temerity to laugh at his plight while he did so.

Just joshing with you Michael....

:E