Irish Tax authorities to investigate FR service companies Sunday Times

[Facelookbovvered]

http://www.thesundaytimes.co.uk/sto/business/Companies/article1210968.ece

Good to see uncle Jim putting his two pennies worth in

[763 jock]

Perhaps some publicity along the lines of Starbucks, Amazon etc is heading towards MOL.

Can't come quick enough.

[Callsign Kilo]

The underlying facts related to this article remain untold. It's wide off the mark.

The Times has portrayed the pilots incorrectly.

BALPA should have seen this coming when they went to the press. This isn't how you achieve solidarity Jim.

15% tax. Laughable. If there are a few Ryanair pilots kicking around paying 15% tax or less then they deserve to go to jail. Simple as.

[Facelookbovvered]

Have to agree, but Jim had an opportunity here to explain it warts and all and blew it, MOL will be pissing himself, pilots get portrayed as tax dogging over paid tossers, however the fact that the tax authorities are offering a deal to pilots who whistleblower on what we all know is a barely legal tax & NI scam, shows that they know where they are going, follow the money as they say.

These are not sophisticated tax avoiders they are pilots who have been frog marched into a scheme with the sole siam of of cutting or eliminating FR's NI bill amongst other benefits.

There is more than enough disgruntled FR bunnies out there to blow the lid on this wide open and I hope they do, Ryanair have turned the clock back 50 years on the treatment of employee's they are taking the piss and it's time they were brought to book.

[Skyhigh86]

The sooner this is nipped in the bud the better for all of us.

[No RYR for me]

Excuse my ignorance why are we concentrating on the BALPA statement: Excellent news that the authorities are finally doing what should have been done AGES ago. Let's create a legal playing field for the pilots across Europe and at least try to stop the RYR rot to normal employer employee relations! :D

[Callsign Kilo]

Can't you see?

The pilot's objective is to have that level playing field.

It wasn't for BALPA to allow the press to portray them as beneficiaries of tax avoidance schemes. The article is intended to read this way. To Mr and Mrs Joe Public, this is how it's presented. The headline might as well be "Greedy Ryanair Pilots in Deliberate Tax Dodge." 15% tax, what a load of :mad:

The underlying story related to this article has been skipped. Either BALPA doesn't know that story (which couldn't be the case), they have been completely naive, or they are singing from a separate hymn sheet than everyone else. I'm glad they aren't fighting my corner any longer.

[dannyalliga]

How will BALPA gain members from FR if they are portraying the pilots in this way.

If this is your only concern guys then join any other ECA affiliated association, those are the guys behind www.ryanairpilotgroup.com and are doing a great job supporting the FR pilots.
The point here isn't BALPA or what the general public might perceive from a single article in a news paper but the wider implications of illegal working practices put in place across Europe.

[dannyalliga]

Join IALPA then, easy.
As usual we pilots have the sick habit of focusing on almost irrelevant details while completely forgetting the big problems.
The focus here is the illegal working and contractual practices put in place by FR, not what some journo wrote in some newspaper.

Only until a very few months ago these stories were unheard of , now the wind has changed and the truth is slowly surfacing. This is what counts.

[Zipster]

So the pilot have to jump aboard a pre-prepared limited company in Ireland and all the money you make as a pilot is going to that limited company initially. If you want a salary, which seems reasonable, then you take out money as a salary and are taxed initially in Ireland like any other mortal tax payer in Ireland is doing, PAYE, USC etc. Additionally if you are domeciled in for example Italy or another country which the majority of pilots actually are, then you have to declare all income there also, and this is where you are in for a surprise in some cases. Since you are taxed at a much higher rate in other countries.

Now, if there are any money left in this Irish limited company at the end of the tax year the pilot decided not taking out as a salary, then you pay corporate income tax rate which is in Ireland 15% or whatever the rate actually is.

So just some confusion then it seems - which is actually not to difficult to understand since these structures are complex. Hope ST will eventually clarify this though.

[jeehaa]

@zipster:

If it was just the higher rate.... The problem in my opinion is than no other country will see us as selfemployed OR employee, but both, which means we are now diving towards a total tax rate of as high as 50% for social taxes ONLY. E.g. Portugal = 11% employee, 23,75% employer => total 34,75%.....

Paying social stuff in the country where you work from, is not more than fair! It has to be reasonable thouh. Something has to change sooner or later

[Utrinque]

Can someone copy and paste the article - I cannot read the full article as I do not subscribe to The Times .. mind you this is a work related article I could probably claim the cost of the subscription as an expense :ok:

[MaxReheat]

Amazing! The Irish tax authority has only just discovered this scam! :eek: Surely the supply of brown envelopes can't be drying up in the Republic?:{

[Shaman]

I am astonished that this has become a slanging match against BALPA. Whenever a UK publication wants some comment from a union about an aviation matter they contact BALPA. I am certain that the comment attributed to BALPA is only a tiny portion of what was in the statement.

Anyway, what is of more concern is that fact that RYR pilots cost their employer less than many other airlines' pilots due to the fact that RYR does not cover many of the other costs which other airlines still do. Read the article to see what :

THE Irish tax authorities are to crack down on pilots working for Ryanair through service companies.

The airline uses hundreds of pilots provided by employment agencies such as Brookfield Aviation, based in Epsom, Surrey.

These agencies recruit pilots from the growing number who have set up limited companies in Ireland. Most live and work outside the republic but can legally shield a larger portion of their earnings from the taxman by setting up an Irish company. In Ireland, these self-employed pilots pay only 15% tax on their earnings.

Balpa, the British pilots’ union, estimates HM Revenue & Customs loses out on £37m a year in tax and national insurance payments from Ryanair’s UK-based agency pilots.

Ryanair benefits because it has to pay them only for hours flown. It does not have to meet the cost of sick pay, holidays or redundancy.

The Irish Air Line Pilots’ Association wrote to its members last week, warning: “The Irish tax authority has indicated that they intend to conduct more detailed audits of the company accounts of limited companies and directors who provide contracted services to a larger company or group. where services are provided by the company to just one client.”

The Irish taxman has also offered to impose a lower penalty of 10% of any tax underpayment on those who come forward to help the investigation. Pilots who agree to help only after they have been served with a “notice of audit” will be hit with a 50% penalty. Failure to make any disclosure results in a penalty of 75% to 100%.

Ryanair said: “Like many companies, Ryanair uses a mix of direct employees and contractors. All of these people are required by contract to fully comply with all Irish and EU tax rules.

“Since we and they continue to comply with all tax obligations, Ryanair will be unaffected by any such audits, although we are not aware of any such audits of Ryanair.”

Jim McAuslan, general secretary of Balpa, said: “The tower of Babel is creaking. This is something that is coming across Europe and it is a real concern.”