Ryanairs Hostile Takeover to cost Exchequer 77M euro per year.

[Colada]

Just found some Tax data for Ryanair and Aer Lingus respectively.
Turned up something quite remarkable.

Ryanair and Aer Lingus have quite similiar Payroll costs declared on their yearly results, each quoting around 250M euro for Payroll.

However, when you cast an eye over the Tax Paid (PAYE) figures you immediately see an enormous discrepancy.

Aer Lingus workers paid an average of 82M euro in taxes per annum, but the Ryanair figure is stated as just 5M euro - on the same amount of money!

This is a difference of 77M euro in taxes per annum, lost to the exchequer.

How is this possible?

Ryanair are known to be avoiding tax by numerous ruses, for example;
Most of their workforce are Agency Staff (contractors) who are paid 'offshore' through foreign companies.
Large proportions of their Salaries are paid as untaxed 'allowances'.

Using Agency workers/contractors also allows Micko to lie about the true number of staff he really needs.

Then there are the Capital Allowances wheezes. And the foreign tax haven wheeze. He avoids tax in Ireland by Registering aircraft in Cyprus (a tax haven for this purpose) and 'leasing' them back to the airline

The figures actually show that Ryanair paid a tax rate of only .73% on its earnings of 1.6Billion euro in the last 5 years.
A mere 11M euro to the Irish exchequer!

Mr.O'Leary made great mileage out of his famous photo-op outside the Dail, waving a cheque for 14M euro in 'personal taxes' at the media.
However, the 14M he paid was a pittance compared to the taxes his company 'avoided'. Pretty good value by any standards.

In the present circumstances, how can the Irish exchequer afford to see the 82M euro in taxes paid by Aer Lingus employees (alone) wiped out by Ryanairs cute hoor accounting practices? On that basis alone, the pittance raised by the sale of the Governments Aer Lingus shares would be wiped out in just over 2 years.

Yet another reason this hostile takeover is a bad deal for Ireland.

[baldur0300]

Allegations of tax evasion are very serious and put this website in jeopardy. Unless you can post proof I suggest you delete your post or rephrase dramatically

[Colada]

There's a very fine line between avoidance and evasion, don't you agree?
Sometimes it takes an army of Barristers years to decide if it's one or the other.

Anyhow, just to make you feel better I removed the evasion comments.
Ryanair would never Evade tax. They know that Tax Evasion is Illegal, and could end up in someone being imprisoned. Right?

Its beside the point however.
The point is that this country is losing enormous tax revenues from a very wealthy company, with earnings of hundreds of millions of euro.
How many of the coming cuts could be avoided if Ryanair paid its taxes like Aer Lingus does?
How many more cuts will be required when the government share holding is spent and the Aer Lingus tax revenues are gone forever?

Ryanair need a new motto:
Cheap Flights Cost....and This Is Where You Start Paying, In Sweat.

[20000miles]

There's a very fine line between avoidance and evasion, don't you agree?

"The difference between tax avoidance and tax evasion is the thickness of a prison wall."

[hiding behind a poster]

Ryanair are known to be avoiding tax by numerous ruses, for example;
Most of their workforce are Agency Staff (contractors) who are paid 'offshore' through foreign companies.

You'll need to back that up with something, Colada.

Large proportions of their Salaries are paid as untaxed 'allowances'.

Not allowed. If it was, everyone in the country would be paid in "allowances".

Using Agency workers/contractors also allows Micko to lie about the true number of staff he really needs.

Perhaps so, but if their base is Ireland then they pay tax through their agency anyway, so the Irish Exchequer gets the money.

He avoids tax in Ireland by Registering aircraft in Cyprus (a tax haven for this purpose) and 'leasing' them back to the airline

Virtually all the Ryanair aircraft based in Ireland are Irish-registered.

[David Cochrane]

Colada, you clearly have an anti-Ryanair agenda when it comes to your posts on Politics.ie, so forgive me for not taking you too seriously, considering the various remarks your've made directed at Michael O'Leary.

Have you considered that not all Ryanair staff are paid in Ireland, and many pay their taxes elsewhere? The PAYE may cover wages for Irish staff, but their staff may be paid in other countries, in which they work (the Ryanair bases for example).

Should staff working a UK to Belgium route pay tax in Ireland?

It's neither evasion or avoidance, there very well may be tax paid elsewhere. But frankly Colada there's only a certain level of pushing I'll tolerate, if you cross the line with regards defamatory or libellous remarks, I'll have to respond accordingly.

Colada, you really should declare your hand, or I'll start calling you Dermot Mannion!*

But seriously, do you have a vendetta against Ryanair for cancelling a flight on your or something?

*meant humourously, I don't know who Colada is.

[BaudrillardNeverExisted]

I don't consider legality to be the point here. It's simple economics. Lets assume Ryanair pays considerably less tax than Aer Lingus. The only argument in favour of the government selling its stake in Aer Lingus is to get some quick cash. Based on the figures given above, the state would earn the same amount in taxes in a couple of years, but if they sell they would lose most of those taxes forever because Ryanair keeps it's tax bill lower (by some means unknown to us here).

That on its own is a compelling argument to keep Aer Lingus independent. €82 million a year isn't trivial. Given that Ryanair's endgame will likely be the same as with Buzz (closing the airline and selling all its assets), every penny of those taxes would be lost to the exchequer, and several thousand extra people would be on the dole.

Quite simply, selling the government stake in Aer Lingus will cost us money, even in the short-term.

[odie1kanobe]

What a load of garbage.

Slander and suggesting that a company are known to be avoiding tax by very ruses has crossed the line.

Time to prove it or withdraw the post.

[Rebel CNC]

Just found some Tax data for Ryanair and Aer Lingus respectively.

...and the source of this data that you "just found"?

[David Cochrane]

Colada? Going to comment?