Moving online business from UK to France, or not?

Banking & Financial Tax & Social charges
21

I'm not the OP Norman. I don't have a second home in France, France is my home, my Husband is a dual resident of UK and France. Second house in my post refereed to the second arm of the Uk business.

I was just pointing out to the Op that in my experience of small sole trader business on both sides of la manche, if you make it in France France want you to be in their system.

I agree with you the French system goes out of it's way to be complicated it keeps French bureaucrats in red tape and therefore justifies their jobs for life.

22

Claire, are you claiming French tax relief on the second home in France? If so then it sounds as if you are already in the system. To be honest I am not a tax specialist, but if you claim benefits against a property be very careful, as in France I know this means it should be registered as a 'commercial property' which then opens a HUGE can of worms!

Insurance, Health & Safety Regulations, VAT requirement, different tax fonciere rates etc. will all become applicable. It's not like even in Belgium where a Profession Liberale could claim for the percentage of costs of a personal property, against space used for the business. As a Writer and Lecturer at the time (registered) the system was very clear and easy to use. My rented flat was classified as 5-rooms, and one room was deductible against tax (ie one-fifth of the rent).

I am not up to speed on latest developments in France - but I doubt things have gotten any easier - it's not the French way!

23

Paypal.

Paypal is dependent on email addresses and you can link more than one email to a single Paypal account. Then depending on how you are taking your money out of the account will depend on what currency you get paid in. I have 2 separate email addresses linked to the same account. One Sterling and the other Euro. Works a treat.

24

I would like to know if you have any written info on that as a given Theo/Norman, it could be very helpful to us.

To clarify from my own experience. It's not about the majority of clients as a sole trader, our major clients are in the Uk but the items we make are made in France so the French insisted we inscribed a second house of the same business in France.

If you are a limited company as previously mentioned it's possible to be a salaried worker for that company but as a sole trader it's not the same.

25

Claire, only if the majority of your clients are in France..., - its like Norman mentioned above.

26

If you are a sole trader and making what you will sell (jewellery) in France the French authorities will consider that you are working here and therefore you will have to register in France . A limited company can trade differently to a sole trader hence the difference in information.

27

Pip, Rachael, we have our son who will stay here but that is not a guarantee. They might move to work abroad as well, not sure which country yet.

IF I keep working for my current community project - depending on the decision of the Directors, I will have my wages paid into the UK account and transferred to one in France. But that is still a big if. In that case, I could ask one of my colleagues if the banking info can be mailed to them.

However, if that is not the case, then I do not really have the need for an account in the UK.

How did you manage to get your Paypal switched over Pip? I read that this was not possible and that you needed to set up a brand new account with Paypal when moving countries.

28

Even since moving here full-time, Lloyds were happy to open a new business account so long as I had a UK mailing address they could send communication to. They weren't interested that I was in France. There only requirement was that I had a English bank account already and the lady on the telephone actually stated, don't bring France address into this, just keep everything as UK and everything will go through smoothly.

It has and I have my UK business bank account with card reader and everything working.

I have my statements electronically. The only correspondence they send out is letters about changes and then there's usually months before the changes take place so no problems.

29

Friends and family members can be useful. I know people who do this, not easy though. I just wish I had made more of an effort to find a solution and keep my account.

30

Hi. reading your comments and responses. Do you have a relative still in the uk who would act purely as a mailing address? I bank with Halifax and they know I am full time resident in France. Even Paypal have transferred everything over for me.

31

Hi Graham and Rachael,

As we will not have an address left in the UK, how do I go about keeping my UK bank account?

Would a bank accept a post box address?

32

Totally agree Graham, I seriously regret getting rid of my UK bank account. Would advise to keep it, it is amazing what crops up.

33

Thanks for the words of wisdom Norman. One can never be warned enough :)


34

Well said Norman....I completely agree...if possible, keep it in England.

I'm hoping that in time France may learn but I doubt it will be in my working lifetime, malheureusement. "Bon courage".....this is what the french say when they wish you luck during the day, I often wondered why??? I don't any longer ;o))

35

Chris, I fear you are getting just an 'initiator' into setting up any sort of business here, and why I diligently advise any and all NOT to do it. Others will advise you differently I am sure, but the problem is quite simply 'red tape' and bureaucracy which applies now just about as equally as if you are a major company or an individual.

Not only is this a nightmare to contain, let alone handle there is also something that is not that well-known, and that is, it is almost impossible to 'cease trading' to stop the flow of paperwork.

A friend of mine opened a restaurant on his property, and ceased actual trading some six years later following a divorce. This was almost twenty years ago, and when we last talked about this he was still having to provide zero TVA returns and other paperwork on his ill-fated project!

As others have mentioned the AE system is all very well, but they keep moving the goalposts eg the Social Charges being applied - yet another piece of paperwork. It can become a nightmare, so take the best advice you can find, but tread very warily. What is fine today, can easily change tomorrow.

When I considered the AE route for a book production facility here some years back, I too was required to 'take a Marketing Course'. At the time I was Professor of Marketing at European Business Schools, and United Business Institutes based in Brussels, teaching both BBA and MBA levels, with published books to my name internationally. All of which was duly dismissed as not valid by the local (Cahors) Chamber of Commerce - who of course would know better and more about Marketing than me wouldn't they?

That was warning enough for me, and the business remained in Australia. I am sure similar stories abound.

Last thing I read a few months back was that only Luxembourg has higher charges than France in the EU - which, if true, probably makes it pretty high on the list worldwide.

Sorry to be so negative, but I spent a lifetime (55 years) in Marketing internationally, and had businesses registered and running in 8 different countries at various times - from Asia to Eastern Europe, but could never fathom out a way of working sensibly - let alone profitably, in France. I love this country, but it is not business-friendly.

36

Welcome to SFN Chris! :)

37

I am getting a slight headache here...

I thought I only asked a simple questions. I am not talking about a HUGE business. I will again be a sole trader (no dividends and such), I make all pieces myself apart from the findings (the stuff to turn my beads and such into finished pieces) from all over the world and then sell online and at the occasional selected market.

It will be a weekend business.. unless it picks up really well and can become a main income but I doubt that.

So, thank you all for your tremendously in depth additions to this conversation :)

38

Pip, there are ceiling to which you have to adher to to be an AE, over that threshold you have to register as one of the many regimes that are registered for VAT / TVA purposes.

As an AE you may not take off any deductions - this includes if you bill your client for postage (ie you declare and pay social charges on the full amount on the facture, the goods PLUS postage)

39

All this must be getting quite confusing for Chris Pellow.

I am going to add a further spoon. Sorry.

In the UK there is a ceiling that you can trade to before you HAVE to register for VAT. I have seen nothing to say there is a France equal.

And adding yet another question to this discussion, what do you do if you are buying the materials to make the produce here in France, that you then sell on the internet say to the UK which in fact means you have exported the goods?

This then leads to is there import taxes to pay in the UK or whichever country you export to.

40

Hi Pip. I'm by no means a tax expert but the advice I've received is as follows (in my own words). One has to separate the company's income from one's own. Despite being tax resident in France one can be an owner, shareholder and/or director of a foreign limited company. Any dividends or salary from that company should be declared as income on your French return. Assuming there is a dual taxation agreement between the country the Limited company is registered in and France then I would expect you'd get full allowance for tax deducted at source on those dividends or salary. Currently I do not draw down any income from my Irish company but will in due course pay tax here on any dividends.

As far as the Limited company is concerned it must make annual returns and pay corporation tax in the country of corporate registration. If the company is trading cross border then things get a bit more complicated but if managed properly the tax on the company's entire income can still be paid in the country of registration. VAT accounting is a whole different challenge though.

Apple is a very good example. I would guess that all iTunes revenue in the EU flows through Ireland and is liable to the beneficial Irish tax rate of 12.5% (if not less by using the Netherlands as well). However when one makes a purchase on the French iTunes site one pays French TVA which is remitted to the French Government. Same in UK, Germany, Spain etc. So the company's income and VAT returns are treated differently. One is global the other local.