That is quite scary!!
Well, that’s for you to decide They’re good friends of mine and the husband is now being treated in UK following operation complications here. Also not particularly pleasant to suggest I’m not telling the truth…but there we are.
Bonjour Maddie: If the EU were actually a Single Market, rather than pretending, your situation would not arise - however that is fodder for a different debate.
I am not an expert, but have had past experience in running an international company, and now retired.
Here are a few things to consider.
You say you have a Ltd in the UK. Are you not owner/director of that? In which case you are not ‘self-employed’ but employed by the Ltd which pays you and your (director’s) tax and NI, plus tax on profits in the UK.
However a UK company cannot employ someone in France on a UK contract - it’s that Single Market not being a Single Market, faux freedom of movement thing.
A person is considered resident for tax in a jurisdiction depending on where they have their primary residence (spend in total 183+ days in a tax year) and/or where they earn their primary income.
From what you say you personally are resident on both tests for tax in France and you are liable for income tax and social security payments in France on your revenue whether earned or unearned from whatever source. In that case you would be automatically enrolled in the French Health system and you can tell HMRC you are no longer resident in UK as that may change the way any income you receive from your Ltd is taxed and NI collected.
In any case if you still must pay income tax in the UK, you would get a credit for this in France so you would not pay twice, but you may have an extra amount to pay in France if the French liability is above the UK one.
Under EU rules - as someone else has mentioned - tax on profits on revenue on an enterprise are due in the tax jurisdiction in which the major part of the sales activity takes place. (This is why certain US companies situated in Ireland or Luxembourg pay tax on profits on EU-wide sales in the EU Country in which they are registered rather than in the EU Countries in which the sales are made.)
From what you say, the sales activity for Ltd takes place in France (you are it) and it matters not where your customers are. You should then be making a tax declaration on your UK Ltd activities in France. I believe in order to do that you would have to have a company in France, maybe a branch office for the UK Ltd - others might know the requirements and practicalities.
Good news! You are not liable for UK Corp tax on profit on sales if the assumptions I have made above are correct.
UK Revenue do not accept an active Ltd company making no profit to tax. You would then have to show a chargeable activity against the French branch of the company - a service charge perhaps. This would be the costs incurred at the Ltd plus a mark-up of a few percent (this is usually agreed by the Revenue) - when I was in a similar situation 8% was agreed, but that is some time ago so rules might have changed.
In fact this is how those US companies in Ireland and Luxembourg operate. Their UK logistics companies charge the parent in Ireland or Luxembourg a service fee to cover costs and give a profit which HMRC can tax. Which is why these company pay relatively little corp tax compared to UK sales - cue angry headlines in the Daily Outrage.
I suppose if your UK Ltd charged the French operation a fee, it would be a business expense allowable for French tax.
Unless there is a compelling need to keep the UK Ltd, it may be simpler for you just to start a company in France and close the UK Ltd; but a French branch office may be a good first step.
I repeat, I am not an expert and have been retired for a few years and things do change, so I recommend you get expert advice from a French accountant/lawyer who deals with businesses - there are plenty who will speak English as this situation is quite common.
Hope that helps. Bonne chance. JB
Can you please desist from making such unpleasant and personal comments - effectively you are calling the poster a liar.
(And as an aside, whilst it is rare, it does happen that other countries do not offer similar levels of treatment as the UK. I know of two SFN members who have returned to the UK for treatment that is unavailable in France and have a good friend who is currently arranging to have a cancer op in the UK as the specialist is better than his options in Sweden and indeed, other European countries. But this isn’t really the point!)
Wow… John… thanks for that very clear explanation…
I’m going to print it out to keep for future reference…
I’m sorry if I appeared to be to direct but I was responding to what appeared to be a reason to bend the rules and keep a foot in both camps just in case you developed a mystery illness that was beyond the scope of the French health system. In my experience when a national health system is unable to treat a particular health issue the find somewhere that can. They don’t leave their patient to die. Moving to another country is a commitment, warts and all.
Well like I said, we don’t all have the same experiences and thank goodness for that.
However my original comment still stands; personal comments are not tolerated ( see our T&C for more details if you wish) so please desist from doing so in future or your membership will be revoked. Thank you.
Be careful! Everything that Anna has written is correct. However, I have been told that even if you are French resident, earning money in the U.K. and running your business from the U.K. you still have to declare the income in France. All French residents have to declare all income. If you are paying taxes in the U.K. there should be no problem, but you still have to declare it If you declare it, I see no reason why you should not apply for a Carte Vitale. Good luck!
What a very weird thing to write!
My contribution had nothing to do with keeping feet in both camps. I’m in the process of registering in France after spending my permitted 183 days grace working out what’s best. I explained a genuine scenario of friends who live here.
I think (and I have seen this before) that there is an assumption by some that people are “trying to do the wrong thing” rather than “trying to do the right thing” It really is not necessary and I feel would stop people coming forward and asking for fear of being shot down. So thanks to those who have commented in a useful way! much appreciated.
We accompany friends down to the local CPAM Offices.
One person’s situation is rarely the same as another’s… but… over many years now… CPAM has proved to be the best starting point.
They are so helpful and give best advice (along with loads of forms to complete depending on the scenario)…and if they cannot help, they tell us (politely) where to go…
Yep - lots of info being provided on this thread - some of it accurate - some not, but then at least the debate is opened up and people can follow up using official sources
Just one, often quoted, misconception to clear up - the 183 day rule. It’s not a numbers game and its most certainly not a definitive criteria for establishing residence. Residence may partly be determined as the place you spend most time - there will always be somewhere you spend more time, even if only by a few ours. Think about those folks who spend time in multiple countries throughout the year. Once that’s established then simple tie breakers are applied - centre of economic interest, income sources, family ties, property ownership / value, bank account / card activity, phone activity, utility payments etc etc - all pretty straightforward and really easy to identify.
Needless to say, the results of the tie breakers may significantly impact on time spent in any one location so, for example - you may spend more time in the UK but your centre of commercial activity and family ties lie in France. Under those circumstances you would be deemed French resident for tax purposes even though you spend less physical time in France. As I said - it’s not a game. Just look it up
I know what you’re saying, but what springs to mind there is - If your centre of commercial activity and family ties are in France, what are you doing in all that time you spend in the UK? If I was your wife I’d be going through your pockets and trying to nick your phone to read your textos
Not entirely a flippant comment, because that is also what the taxman might ask himself. I suppose we all like to think we are unique in the way we live our lives, but the taxman’s seen it all before and he (and the computers) are trained to recognise normal and abnormal patterns of behaviour, people don’t generally drift around at random, or live in a place that’s inconvenient for their lifestyle for no logical reason. So even if you don’t tell your wife what you get up to in the UK, you might have to explain it the taxman to get him off your back.
I think I’ve just entered the Twighlight Zone…
might get a bit crowded…
Hi Maddie, I was registered here as a salaried employee of a foreign company (my Ltd co in the UK), through URSSAF, which eventually led to my getting my carte vitale. Just meant I had to pay cotisations every three months, and tax return. Doesn’t change the requirement to do a tax return for the Ltd co. in the UK, or pay tax for it there.
And as an aside: a tip about the carte vitale - don’t make a postal application and assume it’s in the works, even if they write back to you requesting more details. People told me it can take up to 18 months, but after a year of waiting I went and sat down with them and discovered my application was nowhere on the system. They then sorted it so that I got it within 6 weeks. So I agree with the person who said go and talk to them - putting your body in front of them (even if your French is really limited) is the way to go. Would have saved me a year of waiting more, because I’d still be waiting! .
Hi and thanks. Do you mean you declared tax in both UK and France but only paid tax in UK?
The usual scenario in this case would be for the annual accounts for the Ltd Co to be submitted to HMRC and tax paid in the UK where the company is domiciled, and for the employee who lives in France to declare their salary and pay tax on that in France where they personally are tax resident, hope this helps.
In this scenario would the UK company have to contribute to the employees healthcare costs in France?