Tax help

Banking & Financial Tax & Social charges
1

Hi Forum

I'm sorry if this topic has been asked, however the posts keep going off on tangents.

Here we go...

I am from the UK.

I will be moving to France within the next month or so.

I own a property in France and this will be my main residence.

I have a job to come to and I am going to set up as an Agent Commercial....unless Micro Entrepreneur is better...please first read about my UK limited company below:

My income from this job will be earned, declared and paid in France.

I have a French bank account for my salary to be paid into.

Now...

I have an online business...LIMITED COMPANY...registered in the UK.

I have both a business bank account and a personal bank account in the UK.

I pay my corporation tax, personal tax etc relevant to this company in the UK.

This business allows worldwide customers to purchase online in Pounds Sterling (currency converted from country to country) and the income is then paid in my UK business account.

When I am in France I will obviously be discussing/signposting businesses to my website where they will pay...again converted from their account in Euros to Sterling Pounds.

The French company will receive a receipt of payment from the UK company.

No physical transactions take place in any country other than online payments as stated.

THIS IS NOT ABOUT AVOIDING ANY TAX TO EITHER THE UK or FRANCE or MONEY LAUNDERING etc....JUST NEED TO KNOW THE BEST OPTION...DON'T WANT TO BE DOUBLE TAXED...

My questions....

1. Do I need to decalare any of the online transactions to French authorities as everything is audited and paid in the UK?

2. Is registering as an Agent Commercial the right/only choice as I believe I can't register as a Micro Entrepreneur if you have a limited company?

3. Can I register as a Micro Entrepreneur as my Limited company is UK based?

Thanks for your help:)

Gary

2

A few random comments, but I think you need to get proper advice as you don't really seem to have grasped the basic concepts.

"Agent commercial" is a job title, not a type of business. I believe most agents commerciaux do register as micro entrepreneurs, I can't see a better option. Technically in France one person is not allowed to have two registered entreprises individuelles, not sure how this would be applied if you have a UK Ltd Co.

If you live in France and are therefore subject to French tax rules, you declare all your worldwide income in France, irrespectable of which country it's taxable in.

If you operate your existing business from France, you need to either register it as a French business in some way, or register yourself as a French employee of that company. It's not where your customers are based or where the payment is made from or received or in what currency, that counts, it's where your bum is when you run the business day to day. If your bum is in France, the money regarded as being "earned" and taxable in France. You cannot run an online business from your home in France and pretend you're still in the UK. Either you make yourself a French employee of your company and pay yourself a salary that's taxed in France (not a good idea) or you move the business to France and pay taxes and cotisations that way or you register a second business in France and keep the UK Ltd Co and tie yourself in knots splitting the money between the two businesses and paying taxes in both countries.

But I have no idea what "The French company will receive a receipt of payment from the UK company." means - what French company, are you talking about your customers? or your French company? sorry if I'm being dim.

3

Hi Josephine

Thanks for the reply.

I agree. I do need professional help :)

I posted this as I have read so many forums including this one, all with similar, yet conflicting advice, and I still have no clarity.

I realise Agent Commercial is a job title...I was merely stating that is what I am considering registering as for Tax purposes for the job I have in France.

Micro Entrepreneur seems to be the best option however does it matter if i have a UK Ltd Company? Again conflicting stories and advice.

My online business operates itself from the UK...I merely market my website Globally...

Declaring my worldwide tax is no problem...it is physically paying tax more than once is my concern.

Yes, the French customers are who will receive a receipt from the UK company...same as all my other other worldwide customers...this is straight forward as now I am a UK resident (where my bum is), but soon will be a French resident...

Thanks

4

"I realise Agent Commercial is a job title...I was merely stating that is what I am considering registering as for Tax purposes for the job I have in France."

The way you register, for tax and cotisations, is either as an employee or as a business. I assume you will not be an employee so you need to register as a business. You cannot register as 'a teacher' or 'a plumber' or 'an agent commercial'. You register a business, and as part of the process of registering your business you specify what your main activity will be. Unless you are registered as a business, with a siret number, you cannot carry out a business activity.

"My online business operates itself from the UK..." Yes it sounds logical, but you need to check with the French tax authorities whether they will agree to see it that way. This is "earned" income as opposed to unearned income, and you will be declaring it as your income so you must have earned it, and where were you while it was being earned?

"I merely market my website Globally..." again, where is your bum going to be when you perform this business activity? Your bum is not going to be 'global' is it, it is going to be firmly plonked down in France I imagine? And I also imagine you monitor how your website is running itself, sort out any issues, update it, pay hosting fees and all the other admin stuff? There's been precedents when Brits with UK registered businesses and no French registered business have been picked up and fined by the French authorities for making and receiving business-related phone calls from their home in France.

"Declaring my worldwide tax is no problem...it is physically paying tax more than once is my concern." That's why dual taxation treaties were invented, so that people don't. There is a DTA between France and the UK.

5

Thanks Josephine

lets see how many comments follow and how much more confusing it gets...or is it me?

6

"Micro Entrepreneur seems to be the best option however does it matter if i have a UK Ltd Company? Again conflicting stories and advice."

You would probably be able to register because unless you tell them, nobody will know that you have a UK Ltd Co.

If you tell them that you have, they will probably say Non.

You're asking for clear cut answers where there are none because having a foot each side the Channel inevitably muddies the waters.

7

Hi Josephine

Do you have first hand knowledge/experience about this or just being helpful? Not being funny...

I don't want to hide anything from anyone as transparency is the key to doing everything correctly.

A clear cut answer would be good but I'm not nieve so that won't happen.

I didn't think I was muddying the waters as I don't see the point in closing down a UK company to reopen and register it in France.

There must be a way to do this as there are so many companies operating around the world, and the owner/directors can choose where they live without changing locations of the company...

maybe not???

8

Pretty much what Josephine has already said.

The important point is where you are resident for tax purposes. This can prove to be a complicated issue and you will need to keep a diary of where you are with proof including copies of plane tickets etc. If that is France then you have to declare your worldwide income in France. Any tax you have paid in the UK (or elsewhere) will be given as a credit against your tax liabilty in France.

How do you take your income from the UK company? Salary or dividend or both? That is likely to be important for the amount of tax/social charges you will pay in France. It may also affect how you are taxed in the UK once you become non-resident.

Also, have you thought about VAT/TVA?

What you really need is professional advice from qualified accountants/tax advisers in France and in the UK. You will never get a complete and accurate answer on a forum like this and, as you have found, you are also likely to get conflicting advice. You need a proper discussion with someone who will be able to ask all the relevant questions and get full details of your own particular circumstances.

Get the advice you need, it could be very expensive if you get it wrong.

9

Thank you Mandy and Josephine

I realise I need professional advice which I will do when I come to France (in about a months time.)

The company I am going to be working for a kindly trying to get ahead of the game with everything before I arrive..I have the paperwork to complete.

That is the reason I have posted it here.

Micro entrepreneur with a UK Limited company???

Thanks again..

10

Hi

I am no tax expert but logic would say no to question 1 and don't see why not to 2 and 3. Where you are fiscally resident is one thing and where you pay tax on overseas income ( in this case your ltd company) is another.

11

Thank you Catherine

So do you agree with Josephine and Mandy?

:)

12

Hi, yes I used to have a company in the UK, when I moved to France I looked into all this and and decided that by far the simplest thing was to close the UK company and set up in France and have nothing more to do with HMRC.

As you say transparency is the key but even that is not as easy as it sounds because you try, you tell the authorities things and ask them to confirm and clarify and sometimes you get nowhere. FWIW I found the fisc in France far easier to be transparent with than HMRC because you can go and talk to them and get answers, and their rules are simpler and clearer. HMRC's rules are too opaque and complicated to understand and you can't talk to them so you write and you get no response, it is like banging your head against a wall.

The reason I did it that way is that being dual tax resident and having two tax authorities to deal with seemed to add a lot of complications for no real advantage, and there is always the risk of getting it wrong in all innocence because you've misunderstood or been badly advised, and being clobbered. So in my case I could see no point in keeping a UK registered company once I'd moved to France, it would just have been extra hassle. Of course the devil is in the detail and everybody's situation is slightly different, maybe in your case there would be advantages, which is why you need to get professional advice, but even then...

Yes of course you can choose where you live, but having made that choice you have to accept the implications, you can't pick and choose whether or not to comply with fiscal obligations that come as part and parcel of your chosen residence status. If you look at the owners and directors of companies that you're talking about, I think you'll find that a lot of them have chosen where to live for fiscal reasons, it may not necessarily where they would have chosen for personal reasons, and they are very careful to tick boxes to protect their residency status - spending exactly the right number of days per year here or there or whatever the criteria are. But the trouble with France is that it tends not to set fixed criteria like the UK does, it goes more by the spirit than the letter of the law, which makes it harder to manipulate.

Good luck with getting any sense out of HMRC.

13

"1. Do I need to decalare any of the online transactions to French authorities as everything is audited and paid in the UK? "

Having seen Catharine's comments, maybe I misunderstood your question.

You have to declare the income. You don't have to submit your UK company accounts to the fisc, unless they ask for them as part of a tax investigation. So you wouldn't declare individual transactions, just one figure for your income. That's because they need to know your total household income for the purposes of tax banding. You won't in effect pay tax on the same income twice, but your French source income that's taxable in France may be taxed at a higher rate, if your total income puts you into a higher tax band.

If that makes sense.

14

I agree with Josephine that everyone's circumstances are different! I've had horrendous experiences with les impots and would keep my uk company if it's all running smoothly and then set up in France to do whatever the other job is. But like I said, I'm not an expert! And good luck finding one- we and most of SFN have been looking for one for years!!

15

Gary, this might be a good place to start:

https://www.gov.uk/tax-right-retire-abroad-return-to-uk

and

https://www.gov.uk/tax-uk-income-live-abroad/overview

Another thing to bear in mind is that HMRC will treat you differently once you move to France, so your tax affairs with HMRC won't just keep ticking along as they are now. One of the complications of being dual resident is that as a rule you're only entitled to tax 'perks' in one country, and if you're a deemed to be fiscally resident in France, ie that's where you declare your worldwide income, that's where you get your tax allowances. You will be assessed by HMRC as a non-resident and this is likely to mean that you're no longer entitled to a personal allowance in the UK; generally, only residents get tax allowances.

But, it does all depend on your particular circumstances, that really is the crux of it.

16

Your point about the personal tax allowance in the UK is not correct. You will be entitled to a personal allowance but will have to claim it each year. See here.

https://www.gov.uk/tax-uk-income-live-abroad/personal-allowance

Conflicting advice on such a simple point as this is the reason you need professional advice!

17

I am a tax expert, or was in my previous life in the UK about 100 years ago! Fiscal residence is the same as tax residence and determines where you will be treated as resident for tax purposes and therefore which country will require you to declare your worldwide income. You will be taxed in the UK but you will then get relief for that tax in your country of residence via a double tax treaty.

This explains it well.

http://www.tax-news.com/features/Whats_Fiscal_Residency_Anyway_And_Why_Does_It_Matter__571630.html

18

Indeed, and good professional advice at that because I definitely seem to remember being told by a UK accountant that I would not get a personal tax allowance in the UK :-(

Thanks for putting that right, Mandy - do you happen to know if the rules have changed, or would this have been the case 10 years ago and I was advised wrongly?

19

It seems you may have been poorly advised. Nothing has changed from 10 years ago.

There was a consultation by the government on removing the personal allowance from non-residents a couple of years ago but they decided not to proceed. It may still happen but not before next April at the earliest. Here is an article about it.

http://www.telegraph.co.uk/finance/personalfinance/expat-money/11272572/Expats-will-keep-their-tax-break.html

Hope this helps.