watch out RYR and other 'not really self-employed'

[757_Driver]

Directly from todays budget report just delivered to parliament:

The government will tackle tax avoidance including action to prevent attempts to disguise employment income, raising around £4 billion over the Parliament

my bolding, but a VERY clear signal about dubious contract arrangements

[D O Guerrero]

That's all very well, but if you honestly answer the questions here:
HM Revenue & Customs:Employment Status Indicator (http://www.hmrc.gov.uk/calcs/esi.htm)
... the majority of brookfield pilots will be classed as self employed. So not really sure what they're going to do about it given that the guidance has been for so long that there is no problem with the current setup.

[jersey145]

could be the end of some 'fish and chip' shops on the IOM. Not to forget a certain 'stationary supplier' on the same island. Now about Gibralter.................

[SD.]

How exactly is a BRK pilot self-employed D O?


Contractually bound to work for 1 company for 5 years....

You can't choose when you can and can't work....

You can't simply ask someone else to do the work for you.....




Thats just off the top of my head. Unless you've ever been self-employed before, you'll know that the BRK arrangement is nothing like being your own boss.

[Airspeed Low]

I just used the Inland Revenue status checker and it states a Brookfield pilot would be considered an employee :D

[d105]

Employed by who?

It's also quite naive to think that most Brookfield pilots have contracted themselves directly as a natural person to Brookfield :)

And just for good measure I tried out that tool myself. The result was self-employed. This is pointless.

[D O Guerrero]

If you found that you were "employed" using the status checker, you're not doing it right.
SD, Don't shoot the messenger - I'm not sticking up for the system, it sucks. But if even HMRC considers you to be self employed, then there isn't much that's going to change I'm afraid.

[zerotohero]

I just tried the ESI from HMRC website and came up with been self employed, but in fairness I think its a waste of effort that site! its far to dumbed down and does not ask enough relevant questions to come up with any answer

5 mins of my life wasted I feel

[D O Guerrero]

Sorry but you're missing the point. These are the questions that determine your status, in UK law. The fact that you do not like the answer doesn't change anything. The reason that they give a reference number is that HMRC abides to stand by the outcome of the questionnaire if answered honestly.
If you already think you know the answer, then why bother completing the quiz!?:ugh:

[zerotohero]

Who said I did not like the answer :ugh:

I prefer been self employed, I just think I am far from in working for BRK lol and the HMRC questions are geared to different careers not Aviation and is outdated and wrong and cannot accurately determine my situation, the fact they use this as a check is irrelevant to my post saying its wrong, ask questions in the wrong way and they could say I am clearly from Mars also if they liked, would not make it so though would it.

[Hipennine]

"Who can use the tool

The ESI tool is helpful for anyone who takes on workers, such as employers and contractors. (The tool refers to anyone in this position as an engager.) Individual workers can also use the tool to check their employment status.
However, the tool can’t be used to check the employment status of some workers:


company directors and other individuals who hold office
agency workers
anyone providing services through an intermediary (sometimes referred to as IR35 arrangements)"

Doesn't Brookfield fall into one of the latter two ? (Note don't confuse the term Agency Workers with Temps.)

Also, please be aware that there seems to be some confusion between UK Employment Law, and UK Tax Law in some of the above posts. The definitions of an "employment relationship" are different at an Employment tribunal to a Tax Tribunal.

[Flenit]

As far as I understand it does'nt matter where in th EU you pay your tax, only matter is, if you are a UK resident the UK revenue wants you to pay the difference if any, and as the tax in Ireland is very semilar to the UK that difference is very small for the time being. My accoundant in Ireland finished up my UK self assesment and it turned out to be very semilar. Having been both Ryanair and BRK employed during the last few years I can confirm my net pay is about the same with the current exhange rate but will eventually be worse when/if the pound gets stronger.

[D O Guerrero]

For reasons unbeknown to me (ask my accountant), no we don't fall into one of those categories.

But then again I could just be burying my head in the sand... You've got me thinking about IR35 now and think I will seek an explanation as to why it doesn't seem to apply. I'll get back if anyone's interested.

[Mikehotel152]

Flenit, that's an interesting post with regards the difference between UK and Irish tax liabilities for a Brookfield pilot. It's an issue that concerns me greatly because I don't want a nasty surprise from HMRC sometime in the future.

D O G - My UK accountant says that it doesn't effect Brookfield pilots because HMRC is obliged to honour the dual taxation treaty even if the levels of taxation are lower and/or allowable expenses higher in Ireland. Obviously my Irish accountants don't give a flying :mad: about my UK affairs.

[Hipennine]

D O Guerrero,

you might want to test your accountant's understanding of the term "Agency Workers" for tax purposes as well as the IR35 implications. I get the impression that many confuse an Agency Worker with Temps, but the meanings in both Tax and Employment law are rather different to the general perception, and are sufficiently grey to possibly make it worth HMRC bringing a Brookfield test case.

[D O Guerrero]

Having read the HMRC website regarding IR35, there is one thing that it is not and that's simple.

[biminiflyer]

guys
having worked as "a contractor" ie self employed....for ONE company (this is the key) in the past, HMRC judged that i was not self employed as i only worked for one company and did not control my working practice etc....they considered me to be an employee,and to be honest they were right.
They then went after me and the employer,i sorted it, they resisted and after many years due to resisting, the judgement came in against them(found lots of other things going on) to the tune of many millions and the main man went to prison

I think its not if but when they come knocking regarding the brookfield senario

[Mikehotel152]

But this practice has been in the public domain for years. HMRC already know about RYR and Brookfield contracts!

[BALLSOUT]

I don't think the UK revenue need to take a test case to court. In the UK, tax is the only area where you are guilty, until you can prove yourself inocent. In other words, if they decide to give you a tax demand for your earnings from Brookfield, You have to either pay up, or prove to them you don't owe it. If you can't pay, they just take your house, furniture, car and anything else they can sell!

[D O Guerrero]

Interesting info from my accountant. His feeling is that there is a risk. However HMRC apparently take a practical view of the arrangement regardless of the complex setup to avoid an employer's obligations. He tells me that HMRC are likely to take the view that any Ryanair pilot employed by Brookfield and based in the UK under the old contract, is in effect a pilot working indirectly for an Irish Company on Irish aircraft. IR35 is therefore unlikely to impact on current arrangements as it only affects British companies.
Whether that is accurate or not is anyone's guess...