According to The Guardian, Ryanair is now being investigated by HM Revenue and Customs.
This is more bad news for the Irish airline, which has suffered a PR disaster over thousands of cancelled flights due to a pilot shortage.
It has also been publicly rebuked by the British Civil Aviation Authority (CAA) for denying passengers their rightful compensation. Around 700,000 passengers have been affected by the cancellations.
Now, it appears British tax authorities have some questions about how Ryanair classifies its pilots. This is not the first time Revenue and Customs has investigated employment practices at Ryanair. Two years ago, HMRC examined the airline’s use of third-party agencies to provide them with pilots.
It has long been Ryanair policy to require pilots to establish themselves as limited companies in Ireland before applying. This allows Ryanair to contract the pilots to third-party agencies like McGinley Aviation and Brookfield Aviation.
Ryanair then hires the pilots via Brookfield or McGinley. This arrangement means Ryanair does not have to provide full benefits to its pilots. This helps keep its prices low.
However, since the tax laws concerning limited companies are complex, it is not uncommon for Ryanair pilots to find themselves under investigation for tax fraud because of honest errors.
One pilot, who has been under investigation for over two years, said, “When I started employment, I had to set up a limited company in Ireland with two other pilots who I knew from training and were employed by Ryanair at the same time. We had to go to Ireland, meet their accountant and set up a company.”
Although he used an accountant recommended by Ryanair, he still ran afoul of HMRC.
A former pilot trainer for Ryanair said, “The public should be aware that some of the pilots flying the planes are stressed because of the way they operate.”
Other pilots said they were worried about having their homes searched. Some have had to sell assets like cars and houses in order to pay their tax bills.
All of the pilots interviewed by The Guardian said the lack of sick pay meant pilots were definitely working while under the weather.
Ryanair had no comment on the matter.