Homebased working for a UK employer in France

Near Pezenas. you? Ah it's all changing in April too under the Finance Bill - have you seen this? It looks at whether you still have a home in the UK, family ties and whether you were historically UK resident.

HMRC has issued new guidance relating to the Statutory Residence Test that will come into force on 6 April 2013 and has provided a further update on the new basis for the "Split Year Concession" and "Overseas Workday Relief"


HM Revenue and Customs has now provided further information regarding the legislation to be introduced in Finance Bill 2013 which will determine an individual’s tax residence on a statutory basis. The new test will come into force from 6 April 2013.

Broadly, you will either be “automatically” resident or non resident if you meet certain conditions. If you fail to meet those conditions, a “special” test is applied to determine status.

You will be “automatically” non resident if you meet one of the following tests:

  • You were resident in the UK in one or more of the three preceding tax years and you spend fewer than 16 days in the UK in the tax year
  • You were resident in the UK for none of the three preceding tax years and spend fewer than 46 days in the UK in the tax year
  • You work “full time” overseas without any “significant breaks” from your overseas position, and
    • You spend fewer than 91 days in the UK during the tax year; and
    • The number of days in the tax year in which you work for more than three hours is fewer than 31

You will be “automatically” resident in the UK if you meet one of the following tests:

  • You spend 183 days or more in the UK in the tax year
  • You have a home in the UK for a period of more than 90 days and:
    • You are present in that home on at least 30 separate days (individual or consecutive) during the tax year
    • While you have that UK home, there is a period of 91 consecutive days (some of which falls into the tax year in question) when:
      • You have no home overseas, or
      • You have one or more homes overseas and were not present in any for more than 30 days during the tax year

If you do not meet either test, you will need to use the “sufficient ties” test to determine your tax residence status for a particular year. The test examines your connections to the UK based on:

  • Family
    • broadly, you will have a family tie if either your partner (including husband, wife or civil partner, unless separated) or children under 18 are resident in the UK (certain cases where children are in the UK, e.g. at boarding school may not count)
  • Accommodation
    • you have a place to live in the UK (including a holiday home) and it is available for a continuous period of 91 days or more in the year, and you spend at least one night there (or 16 or more nights if the home belongs to a close relative). Gaps of 15 days or fewer will count towards the continuous period of availability.
  • Work
    • You do more than three hours work a day in the UK for an aggregate of 40 or more days in the year
  • 90 day tie
    • You will have a 90 day tie if you spent more than 90 days in the UK in either or both of the previous two tax years
  • Country tie
    • You will have a country tie if you spent more midnights in the UK than any other country during the tax year

The impact of the ties on the number of days you can spend in the UK without being treated as UK tax resident is as follows:

A: UK Ties needed if you were UK resident for one or more of the three tax years before the tax year under consideration

Days spent in the UK in the tax year under consideration

UK ties needed

16 - 45

At least 4

46 - 90

At least 3

91 - 120

At least 2

Over 120

At least 1

Hi Suzanne,

My company do have a division in France but my role is classed as premanent UK based which is why I doubt they'd employ me as a contractor either (that would be ideal as I presume I need to declare myself self-employed here anyway in order to pay french tax).

I was wondering whether I could increase the number of UK office visits I make to spend one week a month in the UK. According to http://www.pearse-trust.ie/blog/bid/91037/New-UK-Residency-Rules-Explained if I spend 91 days a year in the UK I am a UK resident for tax purposes but I'm not sure whether this would negate the need for a french contract.

Btw, where in Herault are you?

thanks, Jemima

Jemima, the problem for the company is not just employment law, it is that you working in France means they could be considered to have a French Employee and therefore be operating a French subsidiary which exposes them to French tax for both you as an Employee but also on any profits deemed to be obtained in France (read a hassle I'm sure they are not going to be prepared to enter into) so unfortunately I am not surprised the company refuses to issue a French contract.

I would imagine you will need to be UK resident for tax purposes and a UK employee (for your employer's purposes) to continue in your current employment and would probably be expected to commute back to the UK from France at your own expense. It is very difficult to remove yourself from HMRC if you still work in the UK for part of your time but at the same time you will need to declare in France your global revenue from income received for employment in the UK. You are not taxed twice due to the double taxation treaty.

HI All

just found this page which is over 4 years old but this is exactly the same situation i’m in and i was wondering if you had been able to work something out without quitting your job?

Many thanks
Marjorie

Some of the info in this thread is good but some is confusing.

One option may be to use an umbrella company (portage salarial)
eg https://www.freelanceinfrance.com/information-for-workers/
but again, I’m not sure whether this would be acceptable for a permanent contract. Worth asking though, there may be a way round it.

Failing that, either you would need to commute back to the UK on a regular basis in order to remain in the UK social security system, or you do your work from France and your employer enrols you in the French social security system. There’s no middle way. Either you’re a cross border commuter living in France and working in the UK, or you’re an employee living and working in France. Whichever your status is, the relevant rules apply; and the only way you can influence your status is through your working pattern, ie where you actually, physically, spend the majority of your working time.