Freelancing under an umbrella company or not

Hello all, I was approached yesterday to do a remote computer contract for a UK company so was hoping for advice on the best legal arrangement particularly whether to go freelance or to work under an umbrella company. Has anyone had to make a similar decision and what are the pitfalls? TIA Alastair

No expert in this, but to set yourself up as a freelancer, ie auto-entrepreneur, you have to have more than one client as otherwise it is considered as travail dissimulée which is illegal. Basically the law considers that you should be a proper employee.

So the only option is to find a portage company.

You are a french resident with no UK address?

I’m a UK national who is tax resident in France.

I’m not au fait with the French AE rules - never likely to need to be either, but it is similar in the UK - the much hated IR35 rules.

Multiple clients doesn’t have to be multiple clients at the same time, presumably - they could be consecutive or overlap but you’d probably need more than one in any tax year.

Work under an Umbrella company. They will deal with all the PAYE tax and Social security payments. So easy rather than declare self employed. I deal with umbrella companies in my line of employment. much easier. You wont have to deal with the IR35 rules here in France.

Rocam are you saying a UK umbrella company or a French portage company? They seem to be quite similar. Except the portage company is presumably going to advise the UK or French employer upfront of the various taxes the employer will have to pay as soon as any more than 25% of time that will be worked, is done in France even remotely?

In this case a French portage. Yes they do a simulation for the employee so they know what deductions will be made before signing the contract with them. If the OP takes a job through a UK agency, then generally the agency will have contacts here in France to deal with the matter. At the moment I work 90% remotely here in France with 10% on site work at my clients offices. I still get paid 100% through the french Portage.

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If you go down the “portage salarial” (French rough equivalent of an umbrella company) route, try and shop around so that you can compare exactly what will be deducted by the admin.

My wife was faced with that choice a few years ago when it was forced on her by a not too scrupulous French employer - after more than 10 years of working for them as a “contrat saisonnier” (in itself, also a bit iffy) - in the end she found gainful CDI employment elsewhere.

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Thank you all for your answers. I will be working directly with the client, not via an agency, so from your answers I should do the finances through a French Portage company. Any tricks to finding a reasonable, competent and trustworthy one gratefully received!

Prium Portage are worth taking a look at.

Your client will have to agree to paying your contributions here in France on top of your salary, a not insignificant amount.
You need to talk to your client to see if they are willing to do this.

Traditionally the freelancer agrees a day rate as per normal - the portage company invoice for them and convert the “fees” into wages for a small cost. Client only sees the agreed day rate - portage company receives payment - portage company pays employer costs - deducts employee contributions deducts their fee and what’s left is what you get paid.

As an employee expenses are way more favourable and your fully in the system.

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This thread has piqued my interest. I am resident in France, getting UK state pension also my S1 in the French system with CPAM. I have however been offered a lucrative contract with a UK based firm who want me to work in NE England. I do not want to get back into UK tax system by going PAYE, so is my best option going through a UK umbrella company or a French Portage company. Thanks.

Check that this doesn’t loose your eligibility for your S1. The devil is in the detail but if you work in France then France can become your competent state as regards health care and you no longer get an S1. The other issue is where you carry oit this work….

I will be carrying out the work in the UK, and I would be more than happy to get private medical cover whilst in the UK.

I’d go through a UK Ltd if that will work. Obvs carrying out 0-25% of the work (max) in France/remote in France.

Contract is issued to UK Ltd either directly or via agency - I’d even consider Ltd under an umbrella (some umbrellas used to).

If they’re refusing Ltd or insisting IR35 /PAYE then after 30 days working in UK IIRC you are back in UK tax net. But if you fill out the UK Double Taxation form you’ll be making the best of it and in the end you should pay no more. When you do your next French tax declaration I believe expenses can be quite generous under Fr regime.

You won’t lose your S1 as you will be a frontier worker like me and @Larkswood (he’s the expert). I doubt the UK will insist on HMRC reissuing it (HMRC issues working S1’s, DWP issues the post-state retirement ones) if you’re past retirement age.

As soon as you work for a Fr portage or French employer directly then France becomes your competent state. I think I’d avoid that if you’re already retired for quite a few reasons.

If you got your S1 before end of 2020 you can use both FR and UK when visiting. Not sure if that’s the case if you got it after that whether for working or retirement.

Thanks for that information its food for thought, I am already retired and my S1 was issued last august, so I am post brexit . I was going to work 4wks in uk then come home for a week of “work” which is agreed. This thread happened to pop up and I will follow it with interest.

Do you have a source for that? Because the regs don’t seem to suggest there is this leeway.