Pilots working for Ryanair have been under tax enquiries from both the UK and German tax authorities.

Ryanair has engaged pilots who operate via their own personal service companies (PSCs), incorporated in Eire, using a structure recommended by Ryanair’s own accountants. The PSCs then registered with agencies who would provide pilots to Ryanair.

The German tax authorities launched an investigation into the tax position of this working practice last year and various sources report that this has extended to UK based individuals

The key questions that HMRC are looking into relate to employment status.

There are three potential positions:

  • Ryanair (or the agencies) should operate PAYE
  • The personal service companies are “caught” by IR35
  • The relationship between pilot and Ryanair is not akin to employment

The relevant situation will need to be determined on a case by case basis. It will be interesting to see if any go before the courts.

Other matters

Special rules apply to workers whose job involves travelling between jurisdictions, such as pilots, however, these aspects are beyond the scope of this note.

There is a question as to where the companies were resident; as this will be the location of central management and control; see Permanent establishment & residence.



Personal service companies & Tax

Employment status

Agency workers