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?;)

Well if you really believe that Torque tonight, then sadly you're very very blinkered.

I have many friends at FR based all over the empire, and I know of only one....ONE.... That pays ANY form of tax, and he's a UK skipper that's been with FR for the best part of a decade. All the others have been more than open about not paying any form of tax since joining FR.

What's gone on is a joke and if FR really are asking for proof of tax compliance they aren't doing a very good job are they!

I even heard the FR Frankfurt crew room was raided not so long ago by the German authorities because of precisely this issue! That came from an FR F/O who happens to be a very good mate (just before you question my info).

The VAST majority of FR plots have taken the piss out of the EU tax system for faaaar too long so personally, I welcome anything Ryanair and the tax authorities will now do to ensure tax compliance.

Your comments are hearsay, mine are based on oversight of contracts and my tax return. As I said, a more conventional employment/tax arrangement would be welcomed by all, but to say NO tax is being paid is absolute rubbish. :ugh: Ryanair made a point of ensuring that the contracts were tax compliant at the time they were issued, not for our benefit, but to insulate themselves from any future fallout.

The change of rules means that now practically every country whose airspace you enter wants you to pay full income tax there. Obviously there needs to be some international agreement to clarify the situation but until then the majority contractors are paying full tax in RoI under Irish contracts. To accuse 99% of the pilots of paying no tax anywhere is utter nonsense and clearly said by someone with an axe to grind or limited knowledge of the facts.

2 whites,2 reds,
Speak for your friends, and please dont include the rest of us(the "vast majority, of Ryanair pilots") in the 'dont pay any tax catagory. Get your facts right before you shoot your mouth off, you havent a clue what you are talking about.
The fact that all of your good friends are tax evaders, is neither here nor there. Anyway dont let the facts get in the way of a good story.

Taxation
 

I found the treatment fair from the HR Taxoffice back at the time when I was liable to UK Taxes. The poor Germans asked me to pay the diffrence Tax between the UK and the German tax as I paid not enough in the UK according to the Statement provided to the Germans back that time. The linear taxation gave me more Net in the UK and the Germans took another crop. I did not consult the double taxation agreement between UK and Germany back at the time and lost some serious money one time to the Tax Office in Germany, they lost a few months later a Taxpayer = I moved out of the Country and continue to contribute to the UK Tax.

http://www.hmrc.gov.uk/taxtreaties/in-force/germany.pdf

That link should give you the recently uodated agreement between UK and Germany for example. Employment is also mentioned there, Art. 14 / 3. I consulted also other double taxation agreements between EU-Member States and others and there are often provisions for "Crews", named Seamen and Aircrew...


It is clear that people have to pay some tax somewhere. Try to stay legal and you benefit as well from existing rules and regulations. To evade Tax will get you into trouble one day, some sooner, some later.

Guys, I'm not here with an axe to grind, really I'm not.

But this stuff is common knowledge. Ryanair pilots do move around.....we've got a few ex FR chaps in my company. They've all been quite vocal about it. It's all the same stuff I've been hearing from my mates at FR. So please don't think this is just what the few people I know are saying.

Sorry if this has hit a nerve but are you saying the Frankfurt crew room didn't get raided by German authorities? I'm guessing that wasn't in search of a 101ml bottle of water sneaked through security!

For those that are paying the correct tax and social charges....you have nothing to fear from this legislation(well for the next 10 years anyway)....but I'm sorry folks, I think there will be a fair few that will be a bit concerned at the mo.

Anyway, it's Friday evening and that means beer time.

Have a good weekend folks

It is likely that most of those getting leant on by the Stasi are already paying full tax in RoI. The squabble occurs because a number of countries all want to claim tax primacy over some poor contract pilot whose getting pulled in all directions - this is what needs to be resolved, and is not an indication of tax evasion.

There are still a few pilots out there on old, old contracts which pre-date RYR's mandatory tax compliance contract terms. For those guys, tax arrangements are their own responsibility, but all of those that I have met claimed to pay tax somewhere. A far cry from the 99% evasion alleged.

As 2W2R rightly said, its Friday evening... happy hour.

Depone,

I totally agree, most of the guys who are below command hours in FR / EK DEFO ;-) are on the new contracts that came out in 2009. This means they pay tax in Ireland at the going rate for contractors. The only way that guys on this deal can claim they are not paying any tax, is if they are claiming 100% of their income as expenses. Difficult to do this legitimately, but it is possible if you spent as much as you earned on "legitimate" business expenses.

To answer emergencyexits question: "Anyone received a base change or in the know of someone who did since June this year?"

I only know of the guys who left just before in March 2012 on the so called "summer contracts".

The interesting question would be, do these summer contracts constitute a change in your material circumstances?

If not then expect FR to be sending more guys and gals out on the temporary summer deal where A) They don't receive out of base pay and B) Don't have to worry about this threads original question!! - (Will FR have to pay their contractors social security contributions if their material circumstances change after June 2012? And therefore does this mean no one will ever get to change base again??)

Wow this has cheered me up for the weekend :eek: . . .

It´s actually true what´s been said here; most of the pilots (Brookfields, nb!,) are compliant in one way or the other. I personally know a few who aren´t, but they´re all working on it. My point is basically, Brookfield are feeling the heat, and they insist that everyone becomes compliant. I also know that they don´t care too much where you are paying your tax, as long as you have a written statement that you are paying the said tax somewhere - and thereby freeing themselves of any accountability.

2 Reds - you're talking nonsense I'm afraid. Your claims may have been true 7 or 8 years ago, but I don't know a single colleague who does not pay the legal amount of tax that they owe.
Perhaps when you get back from the pub you could apologise for calling us all tax evaders?

He's more likely to quote Queen Gertrude.

"My point is basically, Brookfield are feeling the heat, and they insist that everyone becomes compliant. I also know that they don´t care too much where you are paying your tax, as long as you have a written statement that you are paying the said tax somewhere - and thereby freeing themselves of any accountability."

That is until someone stands up and claims employment. Their 'accountability' will then be sorely tested; as it should be. Bet Fred should open a book on who's going to win that one.

The truth, as always, lies somewhere in the middle.....

A great number of my colleagues (and by that I mean people I know, not the total 3000 pilot workforce) do not pay any form of tax anywhere.

However, 99% of those who joined since Jan 2009 pay tax in either the ROI, UK, or by exception another country.

And don't forget that the so-called contractors receive absolutely ZERO of any benefits which might be consider normal for employees. It's all about getting 'employees' at cheap rates. The advantage RYR have over their competitors over crew costs, including cabin crew, is enormous and scandalous. A big chunk of their profit comes from this strategy. They might be trying to make it seem legal, but it's still a dogs dinner; very smelly.

B738 driver I have a question for you.

Im on the 'old' BRK contract. Its expiring next year. I have been paying full tax as a sole trader under the self assessment system for the duration of the contract with my own accountant.He has given BRK a letter to that effect.

My question is this - If I sign the new contract will I have to set up a LTD with one of the 'approved' accountants or can I set up a LTD company myself with my current accountant ?

Thats the real issue for me. I don't care about the huge taxes I pay.I offset some expense each year but my effective rate is north of 40% including social contributions and USC.The issue I want to avoid is using the crook accountants when iv been doing a good job until now.

B738driver.......what a breath of fresh air.

Drifting off track a little here guys. I think the original question at the beginning of the thread asked whether the new European Regulations on social security meant that guys and gals are less likely to get the base transfer they want. As Ryanair fear that they may have to contribute to some social security taxes under the new rules which came into effect in June.

Does anyone know anyone who has moved since that date? And has anyone noticed a decreasing trend in base transfers?

This: Ryanair summonsed to court over alleged illegal work – The Connexion

has also been a hot topic in the local French language newspapers.

Thanks jimsmitty01 for the reset!

Jimsmitty - I think you're probably right there. I wonder though how this will affect upgrades?
If it means they are likely to stay in their current country, I might give some thought to not leaving!

I was wondering if Ryanair accepts mutual transfer of pilots from a base to another. I mean assuming I am in base A and I am interested in base B where there is a pilot which is interested in my current base, does the company allow a base switch between us?

Thanks