Ryanair bases and new EU regulations on social security
 

Hello,

Here is a concern I have with the new European regulation pertaining to where a Flight Crew member has to pay social security in respect of his/her base and Ryanair present and future policies on the subject...

I am not sure if everybody knows but since June, Flight Crew members are supposed to pay social security contributions no longer in the country where their contract is labelled but where they are actually based. Many Ryanair crews have their contracts in Ireland where the social security contributions are relatively low (4% if I am not mistaken). In other European countries, the contributions can go above 15%! Not only that... Ryanair contracts pilots (especially cadets) through agencies managing some form of companies registered in Ireland where the pilot is so called "self-employed". An interesting side effect of this is that Ryanair does not pay social security contributions on top of the pilot. I am quite confident that this set up would no longer work once a pilot would have to pay contributions for himself in other countries than Ireland. On the contrary, I can hardly imagine that every European country other than Ireland would accept that a citizen does not generate social security contributions from his employer on the basis that he is "self-employed"...

The new European regulation has granted "grandfather's" right for the crews already in the system before June. These rights are valid for 10 years. It means that if, before June, you had an Irish contract with minimal social security contributions from you and none from Ryanair, even if you are based in another European country, you still benefit from your initial situation. The regulation says: "if your situation does not change"... and this is very vague and maybe a key-point in the whole story.

My question is: do you know what "if your situation does not change" actually means? Are they talking about a change of "base country"? Are they talking about a "change in the contract country"?

This is very important in my humble opinion because it can mean that Ryanair will never take a risk of changing your base according to your wishes. Not necessarily because they would care about keeping deductions from your salary low but surely because they would be scared of having to pay employer's social security contributions themselves!

Do you know of anyone who has obtained a base change from any country to another (except Ireland) since June?

This is a very serious question too: it can simply mean that you are stuck in your undesired base FOR EVER. I know of dozens of Ryanair pilots who are unhappy with their present base and who would sell their soul to move at any price and this little nasty European regulation can simply mean: you will NEVER get a base change. Ryanair has another problem then because pilots will leave in herds if they now know they will be stuck at a place they cannot stand.

Lastly, has anyone started a contract "self-employment" style since June and is based out of Ireland? What social contribution and in which country is he/she paying? Ireland or locally in respect of the new regulation?

Thanks for your inputs!

Thanks a lot dannyalliga!

It simply means you are bolted to your pre-June 2012 base for the sake of Ryanair not taking any chances paying employer contributions in any country...

Anyone with another reading/solution to the question?

Can anyone pm me a good accountant that specializes in Pilots (UK/EU), since the rules are getting more and more complex for me to handle on my own. :ugh:

Great question! I hope it creates plenty of informative replies:ok:

HMRC take seems clear to me.

An adjacent question: suppose a pilot changes base from country A to country B (B not being Ireland)… He/she would loose the grandfather’s rights as per the document HM Revenue & Customs: National Insurance: New EU rules for flight and cabin crew working in two or more Member States. He/she would have to pay social security contributions in country B now (maybe 10% salary loss over what was being paid in Ireland). But country B might as well be requiring employer’s contributions on top of that. Since the employer is the pilot himself (through the “his” company set up), country B might ask for another contribution on the employer’s side (the pilot). Another 20% maybe? A nightmare scenario…

The choice being eventually either to NEVER move from the sh.thole place Ryanair sent you in the first place or loose up to 30% of your salary. Thank you MOL!

Another scenario is as follows: the authority of the country you are based in will not accept social payments from "his company" because they claim the pilot is not self employed nor a director of his own LTD but in fact an employee of Ryanair, a typical case of social dumping and tax evasion.
Not my opinion but what I have been told by the local tax/social security office.

Even more exciting scenario isn't it?

Not my opinion but what I have been told by the local tax/social security office.

Besides "telling" you that, did they take/threaten to take any corrective measures?

Thanks!

This becomes very relevant as I understand that gaining promotion to captain means an obligatory change of base and therefore likely country. Not only could you take a salary slide due to a new contract, but then you could get whacked for higher social premiums, and now have the case where you end up with a rainbow portfolio of various EU national pensions, some worth not a lot after only a couple of years premiums. The slippery slope to destitute retirement just got slipperier.

Tight Budgets within the EU require every Cent / Penny collected where possible. I am sure we will see more and more measures how to pull cash of your earned money. I would have no problem with that basicaly if it would be ensured that in the future (retirement) I would see my contribution awarded. The way it goes presently with politicians is just the opposite way: The consistancy of rules and regulations changes the direction like the tides and the trade winds.

You sign some agreement, contract based on todays law to your best knowledge and believe, tomorrow that can be worthless and some jealous people try to screw Aircrews again as they earn too much money. I am sure the market is saturated meanwhile, the direction of the T & C´s shows clearly the direction: Make it cheaper, getting lower, it is not low enough by now. The day when it collapses comes, I hope as late as possible.

The guy said that they move like dinosaurs but when they come down on you then they do it hard.
He said the situation is now pretty well known in the country I am based and that there have already been various anonymous reports mainly from parties that are outside Ryanair.

The contract we have signed aren't based on any law my friend , they are illegal in most countries we live and operate in.
It's not us being screwed by the law but the opposite if you haven't noticed.
Only those who abode by the law have the right to criticize it and most Ryanair crews operate outside the law.

Anyone received a base change or in the know of someone who did since June this year?

The HMRC website is clear:
A change in material circumstances could be a change of employer, 'Home Base', or Member State of residence.
So a change of base in the same country means new rules.

Welcome to the wonderful world of tax FR pilots!

2W 2R, this is about social security and has nothing to do with taxes.

Sarah....

Firstly, Social Charges are just another name for tax! HMRC or whoever your authority is takes this money and passes it onto the Treasury. Your HR dept (if PAYE) calculate the 2 separately and indeed pay them separately to HMRC, so I understand what you're saying....but having been a Bean Counter in a previous life, trust me when I say the payments go to the same place.

Secondly, it doesnt make any difference because 99% of the people's know at FR haven't been paying either of the above for quite some time!

I'm based on the continent for a UK airline so have been recently concerned about the new legislation. However, thanks to the Transition Period of 10 years that's enclosed within the legislation itself, along with talks between our HR dept and HMRC, I've now got an A1 form covering me for the next few years, which is extendable through to 2022. So I continue to pay all my tax (Income AND National Insurance) in the UK.

IF..... You're one of those that hasn't been paying anything anywhere, then trouble ahead and rightly so!

"Nasty little European regulation..."
 

.... was the description used by the EE in his/ her OP.

Two observations:

i) Why exactly should highly paid aircrew be entitled to freeload off the back of European tax and social security payers in any of the 27 jurisdictions within the EU?

ii)If this small element of tightening up on the massive loopholes which Ryanair has been using for more than a decade deserves the pejorative term "nasty", what adjectival term applies to the airline itself ?

Sarah....

Firstly, Social Charges are just another name for tax! HMRC or whoever your authority is takes this money and passes it onto the Treasury. Your HR dept (if PAYE) calculate the 2 separately and indeed pay them separately to HMRC, so I understand what you're saying....but having been a Bean Counter in a previous life, trust me when I say the payments go to the same place.

We don't even have to show the separation between Tax and NI when we hand the money over any more, its all sent electronically to the same account, and us employers just provide a breakdown at the end of the year.

Re Tax and social security:

The above comment is defamatory drivel. Employees PAYE in the traditional way, and for many years it has been mandatory for contractors to provide proof of tax compliance.

Of course a more conventional employment / tax setup would be welcome but to state that 99% pay no tax is demonstrably boll:rolleyes:cks.

Have a nice day.

What about "Norwegian", same story?;)