Ryanair tax scam exposed.
 

ROI Sunday Times Business Section, 11-10-09. Front page item.

Quote:

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UP TO 100 Ryanair pilots have been put on protective notice by Brookfield Aviation, the British contract company that pays them, and told they must sign up to new employment terms to satisfy the Revenue, writes Tom Lyons.

The Revenue is understood to have raised issues about whether the pilots are effectively Ryanair employees. As such, Ryanair would have to pay millions of euros in extra taxes annually.

"Brookfield is a third-party company supplier of aircraft crew to a number of airlines including Ryanair," the airline said. "This is a matter for Brookfield and their people, not Ryanair."

Brookfield has told pilots that on legal advice, and after consulting the Revenue, it wants to implement a new contract structure drawn up by the Dublin tax consultants McNamara and Associates. Under this structure, groups of pilots would become directors of companies set up by McNamara and Associates and contracted to Brookfield.

Pilots have asked Brook-field to provide a written copy of the agreement the agency says it has reached with the Revenue. Brook-field declined to say why it has not done so.

Some of the pilots have provided tax-clearance certificates to Brookfield. They have also told Brookfield they are unclear why they must now become directors of companies set up by McNamara and Associates.

Pilots have been told they must sign up to new contracts if they wish to continue working for Brookfield after January 9, 2010. Pilots will be sent their new contracts this week.

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Can anyone point me at documentation showing the link between Ryanair and Brookfield?
I understand it to be a wholly owned subsidiary - just looking for a link to prove it now.

Could please provide the actual link for the above related article?

Cheers:ok:.

The wheels on the bus may be about to fall off!

D and F :8

Yeahhh... I've read and heard that before:bored::suspect:. But at the end of the day aren't the wheels still on the bus:bored:?

With a hugely reduced yeald per pax, higher training costs, lack of credit and now Inland Revenue, the wind is blowing cold not just with Ryanair.

I made the mistake of not joining 3 years ago, so you cant call me a Ryanair basher. It's just maybe now Brookfield and all it's parallels may die and proper(ish) employment contracts may prevail.

D and F :8

Non News
 

Every tax authority in EVERY western country is looking at EVERY means of clawing EVERY last penny / cent from the working masses.

Having allowed the banks to royally do us over, we now ALL have to pay for their incompetence.

McNamara say that the Revenue have approved this new Company structure and they've had senior legal counsel check its legality. As for tax, you still pay PAYE tax under the scheme so I don't know what the concern is - though I would be interested to know more!

As Ben Franklin said in a letter to Leroy:

"but in this world nothing can be said to be certain, except death and taxes."

The Italian government has been chasing every financier, motorcycle racer, footballer and opera singer for monies earned in Italy and abroad. They are reaping quite a bit too. So I'm not surprised the IR are chasing everyone.
You can run but the IR will get you in the end , MP's are under the cosh too:D

Very simple... when an interpretation from the IR relating to a particular issued is required.... either a private, or public letter ruling on the matter is issued.

Very simple... as a client of McNamara, you have a right to have a copy of the ruling for your files... it's your right as the client to have proof of such assertion to protect your interests to the utmost. If there is no letter in existence, or a McNamara's tax attorney won't provide you with documentation supporting their opinion, then stay away from them.

After all... after the audit... who'se going to be responsible for delinquent taxes and penalties, along with interest???? hmmm?

Captjns I can't give you a link yet because the article hasn't yet appeared in the Timesonline website. I'll keep checking.
The article I posted was clipped from the front page of Sundays 'Sunday Times' newspaper, then scanned into my PC for upload - in original unedited form.

Its surprising how this story has been ignored by the media.
Or maybe it isn't so surprising?

You seem to know about companies law - can you give any info on ownership of Brookfields? Is it a PLC? Do the Directors have to be named?

It's not surprising because very many industries work this way. It's a standard operating model for placing non-permanent staff via agencies. Virtually every organisation hiring long-term contractors or interim managers uses this structure. I think the article is wrong in implying Ryanair might be liable for additional tax if the Revenue doesn't accept that the contract pilots are self-employed. Rather they may be deemed to be direct employees of Brookfield which would have the problem.

Putting a company between Brookfield and the pilot(s) minimises the risk for Brookfield. The pilot(s)' company then has the PAYE/NIC obligations for the pilot(s).

In the UK the relevant legislation is IR35 which was originally introduced to stop full timers leaving PAYE and arriving back after the weekend as a contractor. It was a sledgehammer to crack a nut at the time, expected to raise £200 million, a mere drop in the ocean. 10 years or so later the IR can't say how much has been raised but it is known to be a very small amount.

However, the downside is that it forced the perfectly legitimate self employed contractors into becoming part of a limited company and having to take income as dividends to lower the NI exposure. Then comes the acid test of whether you are just a disguised employee, therefore have to pay full NI - both employers and employees, and then PAYE. There is/was a paltry allowance of 5% for all expenses in running the ltd company, but it does not start to cover the extra NI and administration expenses. Also, as a ltd co contracting to another there is no employment protection- this has to be built into the ltd co, another unfairness.

The composite, or umbrella companies used to be able to offer total tax payments of under 20% but most of these schemes are now being closed down by the IR.

It's not a wholly owned sibsidary. Its an agency which contracts pilots almost exclusively to Ryanair but there are no ownership linkages

I can say with 110% confidence that the correspondence referred to in the Article does not exist.

I can say this with such confidence because the Irish tax office have told me that it does not and also that it never will. To issue such a letter or enter such an agreement the Irish tax office would have to confirm that the contractor was self employed and not an employee. By agreeing to this it would mean that the Irish tax office would never be able to pursue Ryanair and for that matter many other companies if they felt that the contractors were in fact only employees by anothe name.

The EU is not that well disposed to self employed contractors as they see them as exploited employees so the tax office will always be wary of this.

IALPA put pressure on the Irish tax office to force them to stop allowing Ryanair to employ pilots on a contract basis. The Irish tax office looked into the Ryaniar situation got referred on to BRK and told BRK to get their house in order and ensure that each and every contractor pilot was registered and paying tax.

The Irish Tax office, at the highest level, decided that for the moment they would let the contractor situation slide at Ryaniar, but they reserved the right to revisit the situation if they wanted.

The agreement that BRK have is that they have agreed to get their house in order. BRK and McNamara went to the tax office and explained their proposed solution. The tax office did not agree that this was the only allowable structure, what they probably told them was that they didn't particularlay care what sort of company they used, but just get the pilots registered.

Then BRK wrote to each of the contractor pilots requesting confirmation that they were registered for tax. You have to ask the question, why at this stage they did not roll out their "approved" arrangement.

What happened next is that BRK realsised that firms like CXC and McNamara might pay them a commisson for every pilot they sent their way. A self employed pilot is a valuble asset if you are charging them 3% of their income and also getting another few percent on any pensions that you sell them. So all of a sudden the McNamaras of this world are taking out 5% or 6% from each pilots income. Why wouldn't they throw a bit of that back BRK's way by way of thanks. It easy money for BRK.

However to ensure that the pilots don't "fly the nest egg" (forgive the pun) and start using an accountant of their own who will not be paying BRK commission BRK decide to start making it a condition of the contract that a self employed pilots have to use a tax advisor of BRK's choice.

Its a nasty little scheme that has been hatched and up to now any pilot not towing the line has been left in no doubt that failing to sign up with BRK's accountants will result in being taken off the roster.

I think with this in the newspapers it will force their hand a little. They will have to back up what they are claiming. Of course if they do have an agreement with the tax office then they should make it available on their website together with the legal opinion that have.

Its the least they can do. Its at times like these that you begrudgingly appreciate MOL and they way he operates more. BRK are tyring to be like him but I think have failed. At least when MOL decides to bully someone or he comes out with a statement it is very rare that someone can come out and correct him on his facts. BRK have tried to do the same thing here and it would apprear that their facts are not facts at all.

Time to call them out on this one.

Hasdrubal

Historically Brookfield was just a bucket shop set up to avoid Ryanair having to pay social charges. Happily, this allowed many pilots to make vast sums of money without the inconvenience of having to give any of it to these pesky tax authorities.
Regretably this belle epoque appears to be ending, and now of course the Brookfield net encompasses a bit of Chinese take-away etc, therby lending an air of authenticity to the "we are really an agency not just a Ryanair serving vehicle" claim. It did exist before RYR of course, but was fairly moribund compared to Parc/Contractair etc, until that nice Mr Dooney had yet another inspired idea to add to the 50 quid c.v. charge :hmm:
It's original raison d' etre though is rapidly eroding, and for the pilots any attraction of this employment method are long gone.
Nowadays if you are a legal "Brookie" I would imagine you are earning less (or certainly no more ) than a permanent employee, with no dosh if you are sick/not rostered, paying no social charges /therefore no benefits anywhere , unable to accurately predict a minimum monthly income, and with even less employment protection. All in all, what one could fairly claim to be a bum deal. The sooner this cancer is eradicated and Ryanair forced to employ everyone the better, but I suspect the Irish authorities are more interested in taking what they can and keeping Ryanair sweet, than enforcing any workers rights/charter.

Agreed,

As The Real Slim Shady said above the Revenue in every country are trying to get every penny they can.

So why would the Irish be any different. Rock the contractor boat and they gain a few hundred grand in tax from the pilots but they loose the Ryanair corporation tax and probably even MOL's own €14million a year income tax payment. You can't blame them for what they are doing.

It is possible for the gravy train to still roll for contractors but not it they are stuck with the McNamaras who are less concerned with their relationship with the pilot as they are with their relationship with BRK. Given that the accountant has a duty of care to the pilot and not to BRK there must be a very fine line that the accountants are walking.

I am a BRK pilot based in Ireland.I pay my taxes with a firm that is not Mcnamara.I don't want to join Mcnamara!!!
Do you guys think they will force all brookfield european pilots join this Mcnamara thing?
I am ready to buy a famous newspaper page and say the whole story with all the names.

Which news paper would do the job in UK? and in Ireland?

Thanks

You can choose any newspaper you want. The sad fact is that 99 percent of the public don't care. They just want to get from point A to point B as quickly and cheaply as possible. :eek:

As far as I'm aware the revenue are happy for Brk pilots to continue operating the way they have been as long they pay their taxes. This is just Brk and McNamara behaving like the mafia.