Business Irish

Tuesday 20 February 2018

Aer Lingus dismisses tax fears as it rehires pilot let go last year

Laura Noonan and Anne Marie Walsh

AER Lingus has rehired a pilot who took redundancy last autumn, but believes the appointment doesn't trigger any tax issues as the pilot is now working in the US.

The news comes as the airline continues an investigation into its controversial 'leave and return' scheme which triggered a €29.5m tax settlement.

The 2008 scheme allowed 700 staff to leave the airline with redundancy packages and return weeks later on reduced terms and conditions.

Sources have told the Irish Independent that pilots who left the airline under last autumn's redundancies had attempted to create their own version of 'leave and return'.

One pilot is understood to have taken redundancy and is now working out of Aer Lingus's Washington base under new terms and conditions.

Several other pilots who left last year are believed to have tried to return to work at the airline's bases in Gatwick and Belfast under new contracts.

Aer Lingus is understood to have taken legal advice on the US case and believes there are no tax issues triggered by his return to work.

The situation is seen as different to the 2008 arrangement because the pilot is now working in a different jurisdiction for a different legal entity (Aer Lingus US). The airline is understood to have "no immediate plans" to rehire any pilots at bases in Gatwick or Belfast.

A probe into the circumstances surrounding the 2008 deal is ongoing, with Aer Lingus seeking to identify the shortcomings that led to the unexpected tax bill.

When Aer Lingus launched the scheme, it insisted the redundancies were "genuine" and would qualify for tax relief in the usual way. The airline has since agreed to repay tax, as well as interest and penalties to the Revenue Commissioners.

Irish Independent

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