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RYANAIR Police Raid in Germany

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RYANAIR Police Raid in Germany

Old 6th Jul 2016, 18:38
  #21 (permalink)  
 
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No one takes the jobs, no problem. Take the job? Pay your taxes.
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Old 6th Jul 2016, 19:10
  #22 (permalink)  
 
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That's something you should explain Brookfield and Ryanair.
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Old 6th Jul 2016, 19:45
  #23 (permalink)  
 
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Originally Posted by TRF4EVR View Post
No one takes the jobs, no problem. Take the job? Pay your taxes.
Did you even read what was posted above?
Are you part of the MOL disinformation fan group ...

This is not so much about taxes, but more about social security payments (healthcare, pension, unemployment). In Germany, these must be paid, at least in part, by the employer. The rules forbid that a self employed "contractor" works full time for a single client (with some rare exceptions, but "airline pilot" is not among these).

What this airline is doing by not employing their pilots directly but contracting them as individual sub-contractors is called "Scheinselbständigkeit" (something like "pretended independence") and this is what the authorities are after. In case the authorities win their case, the airline will have to pay social security for all their pilots in Germany for up to four years retroactive.
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Old 6th Jul 2016, 19:54
  #24 (permalink)  
 
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The "unpaid taxes" in this case are not the pilots dodging things, but the fact that because the state deems BRK/Storm (or with any luck, ultimately Ryanair) to be the employer, these organisations are not providing proper employee benefits such as sick, pay, employers' contributions and it is this they are after.

In my time as a "service provider" I had maybe 5 interactions in total with my "agency" and everything else was entirely through Ryanair. This included changes where Ryanair dealt with and actioned moves and the agency paperwork caught up months later. HMRC are also after Brookfield for similar reasons.

Under UK law, it is BRK who would be liable for any financial penalties were the pilots found to be employees, and anecdotally Brookfield is being wound down, with contracts not renewed but transferred to Storm or Ryanair terms.

I don't know what the situation is in Germany.
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Old 6th Jul 2016, 19:56
  #25 (permalink)  

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If someone takes the job I think you will find that they can only have the job as a freelance contractor. If that is the case the tax rules are different but working for just one company it is known in the UK as false self-employment even if the individual contracts via a third party.

An individual who is forced into self-employment by this situation does pay his or her taxes but the taxation regime, certainly in the UK, is entirely different.

A quick search of the internet will yield many articles on the subject.
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Old 6th Jul 2016, 21:20
  #26 (permalink)  
 
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In Germany the law is very clear. If you declare yourself as self-employed you must operate as a business. The key test authorities apply is to check how many customers the self employed person has served in the last tax year. If the answer is one, you cannot deemed as self employed. The bad news is the offence has been committed by the disguised employee, not the disguised employer. Ryanair, or any other linked company are not on the hook.

You've wilfully declared yourself as self employed in order to gain a financial advantage whilst not actually exhibiting any semblance of a business, which is fraud... It's the harsh reality, I've been through it

When you sign such a service contract, the other party is perfectly aware that you, not them are on the hook for social costs and taxes due, no matter what. The other party rests on the defence that they took all reasonable steps to ensure you were self employed and assumed you would comply with the applicable laws. Its a horrible situation to be in.
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Old 6th Jul 2016, 21:30
  #27 (permalink)  
 
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While the focus is on social security contributions, tax issues are also at stake: Because contractors invoice their clients, they are subject to VAT and often have claimed tax breaks in relation to VAT - which they are not allowed to if they are in fact an employee.

For the record, Ryanair has released a press statement that they are not investigated. The problems lies with Brooklands because if there is an employer, it would most probably be Brooklands and not Ryanair (or is Ryanair invoiced for the services by the pilots rather than Brooklands?)
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Old 6th Jul 2016, 21:36
  #28 (permalink)  
 
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@virginblue Sure you could say that they are employees of Brookfield. On the other hand who gives out the roster? To whom do they have to call in case of sickness, who is doing the leave planing.......... It might be that a judge decides hey they are employees of Ryanair.
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Old 6th Jul 2016, 23:09
  #29 (permalink)  
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Originally Posted by Wanabee,Gunnabee,Am View Post
In which case the problem lies with RYR. It is they then that should be targetted not the employees. so why are they going after the employees. I shall watch this with interest.
My experience from similar cases in Germany: They are seeking munition against Ryanair. If the case goes through, Ryanair will have to employ its Germany based pilots as regular employees. Both, employer and employee, will have to pay roughly equally social security (federal pension scheme, unemployment, healthcare and nursing care insurance).
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Old 7th Jul 2016, 01:17
  #30 (permalink)  
 
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The pilots can run away a lot easier than the company. Further investigation could uncover wrong doing on the company's part, tip of the iceberg stuff. Remember it was the US tax authorities that got Al Capone, not the police. The German tax office is staffed by people who would have passed the aptitude test for the gestapo with flying colours.

Threats to seize company assets and the possibility of prolonged legal action against an opponent who doesn't need to worry about the cost may cause MOL to reconsider his position.
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Old 7th Jul 2016, 08:39
  #31 (permalink)  
 
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You do realize that "these crooks" have these contracts by necessity, not by choice, and that the actual creators of this scheme do not face any police raids?
Not correct. If offered contracts that are shady, and possibly putting you in a legal gray area, just don't work for them. Lots of other jobs around.
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Old 7th Jul 2016, 11:49
  #32 (permalink)  
 
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Are the "self employed" members not made aware of this implication upon commencing work within Germany?
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Old 7th Jul 2016, 13:21
  #33 (permalink)  
 
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This is history repeating itself.

Something like this happened in my company. We had about 150 people operating various kinds of technical equipment.
They were employed by a certain company, contractor to us,
which had, of course, submitted the lowest bid.
In 1978 or so the German authorities
discovered that no tax or anything else was being paid.
To cut a long story the matter ended up in the German labour
court which decided that we were the employer.
Somewhere in the whole affair the contracting company informed its people that...
"you are not employed by us and never have been".
The "employees" had been a bit silly, mostly sending their money out
of Germany, but via the banking system.
I believe that is was the bank which they all used which informed the authorities.
Europe was of course "Cowboy country" in the early days of the EU. The people employed were mostly from the UK.
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Old 7th Jul 2016, 14:42
  #34 (permalink)  
 
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The world of IT is full of these "contractor" behaviours. I've worked in it in the UK, but not Germany.
In the UK, if you can prove that in the contract, it is not for you to do the work, but for you to provide a skilled person to do the work, i.e. that you can substitute someone else who has the required qualifications and skill, and if you can show intent to "sell" your service to some one else, then you can get away with it.
I do not think this applies to Aviation.
So, as and when France, Germany and others catch up with these dodgy employers, and when the Brit politicians focus HMRC on the issue, then something might change...................Some time away, yet.
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Old 7th Jul 2016, 15:02
  #35 (permalink)  
 
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Originally Posted by Ancient Observer View Post
The world of IT is full of these "contractor" behaviours. I've worked in it in the UK, but not Germany.
In the UK, if you can prove that in the contract, it is not for you to do the work, but for you to provide a skilled person to do the work, i.e. that you can substitute someone else who has the required qualifications and skill, and if you can show intent to "sell" your service to some one else, then you can get away with it.
I do not think this applies to Aviation.
So, as and when France, Germany and others catch up with these dodgy employers, and when the Brit politicians focus HMRC on the issue, then something might change...................Some time away, yet.
Yes, the hated IR-35.
The tax authorities take a dim view of people setting up as 'personal service companies' to evade (note evade not avoid) tax. Paying themselves a pauper level declared salary and taking the rest in dividends from their company. Or any of a number of similar wheezes, especially those where the 'company' is in another country with laxer tax regimes.
There were a group of 'contractors' working in Europe some years ago who were suddenly told their company was under investigation and then had to pay assessed back taxes back to when they started that employment some up to 5 year's worth of taxes.
It doesn't make sense to get into that position.
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Old 8th Jul 2016, 15:37
  #36 (permalink)  
 
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How can Ryanair possibly use the defence the they reasonably believed their pilots were complying with the law? They know that they were not working for anyone else because they hold the legal records of their pilots duty times for FTL recording purposes. Therefore they know that the pilots are not compliant with the requirements for holding self employed/freelance status. ie. the need to work for more than one company.
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Old 8th Jul 2016, 15:57
  #37 (permalink)  
 
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Substance over Form

McDoo is correct. Also tax authorities can take action where the 'substance' of a transaction overrides its 'legal form'. In other words, if the clear intention of the airline is for these pilots to be de-facto employees of Ryanair, then just relying on an agency-employment technicality is no defence.

The sad thing is: any pilot who does not derive flying employment income elsewhere will be on very thin ice in this tax investigation. Usually though, it is the 'deepest-pockets' the tax authorities go after first... i.e. Ryanair in this case. Why chase dozens of individuals who may be unable to repay any tax owed and are highly mobile in their employment anyway, when you can just go after one big fat legal entity?

It will all end in tears. These things usually do.
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Old 8th Jul 2016, 16:32
  #38 (permalink)  

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Go after the employee (or self employed contractor) get the facts then go after the employer is my guess.
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Old 8th Jul 2016, 16:36
  #39 (permalink)  
 
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Originally Posted by er340790 View Post
McDoo is correct. Also tax authorities can take action where the 'substance' of a transaction overrides its 'legal form'. In other words, if the clear intention of the airline is for these pilots to be de-facto employees of Ryanair, then just relying on an agency-employment technicality is no defence.

The sad thing is: any pilot who does not derive flying employment income elsewhere will be on very thin ice in this tax investigation. Usually though, it is the 'deepest-pockets' the tax authorities go after first... i.e. Ryanair in this case. Why chase dozens of individuals who may be unable to repay any tax owed and are highly mobile in their employment anyway, when you can just go after one big fat legal entity?

It will all end in tears. These things usually do.
The tax laws are significantly different in each country. In UK the individual is the one the tax authorities will charge with evasion. In other countries, for example the US, the large company with 'pretend' contractors will be charged with evasion. Presumably, there are countries where both parties are charged.
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Old 8th Jul 2016, 17:39
  #40 (permalink)  
 
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IR-35 is being replaced, or rather enhanced, by the Intermediaries legistlation in the UK

Since last year if you provide more than one person to ANYONE you have to regularly file their details (and payments) including their Tax number with HMRC. Also details of the end user. HMRC will be able to trawl & cross reference all sorts of info to see who is only working fo one company and how little NI & tax they are paying
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