Tax for Uk self employed in France

(Steve Cross) #1

Hi all,

We are currently researching moving to France next year. As we both were born in NI we qualify for Irish passports so continuing EU citizenship after Brexit should not be an issue.
I work self employed in UK and would continue to do so after the move, having spoken to HMRC and French authorities it seems fairly clear that as I earn in the UK I pay UK taxes and then submit a French tax return with UK income on it which would then receive a credit under the double taxation agreement.
Whats less clear is how I would pay social charges. My partner soon to be wife would register as AE as she would be doing Chambre d’hote in the house, I understand this would entitle her to access to healthcare. Ive also read conflicting reports that as her spouse my healthcare ( basic ) would be covered too, and others that say with Puma after 3 months resident I would qualify in my own right anyway?

As a non UK resident I would not have to pay NI so there would be no huge impact to finances if I had to pay social charges but the issue is I would have no registered business in France. Any help appreciated.

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(David Martin) #2

As you will be travelling back to the UK to work won’t you be paying NI and therefore be eligible for a workers’ S1?

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(Anna Watson) #3

No, this is out of date info. Dependent spouses did used to be covered as “ayant droits” under the old CSU system but the ayant droit arrangement for adults was phased out when the new PUMA system was introduced in Jan 2016. Now every adult is covered in their own right. (In any case if you are working then you are not a dependent.)

No. Inactifs can apply for PUMA after 3 months residence, but if you are working in the UK then you are not an inactif.

As David says, you need to get an S1 from the UK and this will be your route to healthcare in France.

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(Steve Cross) #4

Thanks Anna,

As a non resident in UK I was told I would only be able to pay Ni on a voluntary basis but that may not cover me for an S1. Saw on a few other forums people saying the criteria were very restrictive in that you had to spend time every week in UK and do absolutely no work from home in France - that would be an issue for me.

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(David Martin) #5

The working from home in France is a very important point. The French tax office will consider any work carried out while you are physically in a France as work taxable in France even if it is online for your British company and British clients.

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(Steve Cross) #6

I dont mind paying tax, indeed I’m not trying to avoid it at all, but surely there must be people who work cross border who pick up a call or send an email while in their resident country without opening a whole can of worms?

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(Anna Watson) #7

Again, exactly as David says. You pay tax to the country where you are physically when you are working.

Unless you have an S1 that is also the country whose social security system you pay into, and this covers your healthcare…
I found this which explains about the social security aspect
https://www.lappelexpert.fr/question-juridique/social/un-salarie-peut-il-etre-dans-une-situation-de-teletravail-dans-un-pays
"En matière de sécurité sociale, par défaut, le salarié en télétravail à l’étranger est dans une situation d’expatriation. Exerçant son activité dans un pays étranger, il est soumis au régime de sécurité sociale de ce pays, où doivent être réglées les cotisations sociales (Règlement CE 883/2004, art. 11).

“Dans le cadre de l’Union Européenne, de l’Espace économique européen ou de la Suisse, le salarié peut, sur option de l’employeur, être détaché au sens de la sécurité sociale pour une durée initiale de 24 mois. Le salarié continue alors à être affilié au régime de sécurité sociale de son pays d’envoi, la France, sans cotiser dans son pays d’accueil (Règlement CE 883/2004, art. 12). Hors de ce cadre, des conventions bilatérales prévoient également la possibilité de détacher des salariés.”

If your UK employer “posts” you (détacher) to France you can carry on paying NICs in the UK while paying tax in France, but this is a time-limited arrangement so it wouldn’t work for a permanent move. Then there’s Brexit to think about too, will the UK still be in the Espace économique européen or will it be an add-on like Switzerland.

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(Steve Cross) #8

So if I work 75% UK 25% France I have to split my returns?

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(David Martin) #9

If you are a French resident you have to submit a tax return declaring your worldwide income. You do not have the luxury of where you pay your tax.
Over the years I’ve seen numerous similar posts where people think that moving to France and running their U.K. company from their computer will be the answer to their problems but it’s a lot more complicated than that. A few years ago a British removals company with their U.K. registered lorries working out of Kent where they had their office and warehouse were fined hundreds of thousands of Euros because they had used a French correspondence address in the Limousin and a French phone number and not declared their income in France. Get advice.

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(Anna Watson) #10

I remember that. A cautionary tale.
I can’t remember the details now but I thought it was URSSAF not the tax office that caught them, and sanctions were for running an unregistered business and not paying cotisations, rather than tax? But as a general rule; not paying cotisations is dealt with far more harshly in France than failing to pay tax. The tax office are on the whole reasonable people but URSSAF have a reputation for being draconian. There was also the bar owner in Brittany who allowed a customer to collect empty beer glasses on a busy night, and URSSAF tried to prosecute her for using undeclared labour. You couldn’t make it up, but it happened. Welcome to France. As David says, get advice.

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(Anna Watson) #11

Results of an evening’s googling while waiting for various emails to arrive:
I found loads of reports about the Brittany bar owner


etc.
I couldn’t find any reference to the hauliers but in searching for it I did find this which might or might not be relevant - a case that revolved around whether a UK company did or did not have an establishment in France. Haven’t read every word cos it’s in small print! but the gist seems to be that even though it was eventually decided no taxes were owed, the prison sentence was still enforced. Va savoir. But the message has to be, get very good advice and if in any doubt at all, play safe and don’t risk it for a biscuit. It’s a different culture, France takes these things a lot more seriously than the UK does, to an extent that Brits find hard to comprehend when they first move here, and is more proactive in doing checks.
http://www.etudes-fiscales-internationales.com/archive/2017/08/03/etablissement-stable-penal-mais-non-fiscal -cass-crim-31 -05-25584.html

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(Steve Cross) #12

But this confirms revenues were withheld. I’d be submitting a French tax return and declaring all income. Not sure it’s relevant but thanks for checking…

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