UK Income on my French tax return increased by 25%?

(Many Morrison) #1

I am just reviewing our French Tax Return from last year, and i have just notice that my UK income element has been multiplied by 25% boosting up our fiscal reference.

Does this happen to anyone else? if so do you know why? and is there any way to avoid this?

(Many Morrison) #2

Thank you Alex, I'll take a look.

(Jonathan Barclay) #3

Did you miss out a "not" in your last sentence. I am in the same position and equally relieved not to be running a business here

(Alex Thurgood) #4

It would appear that having filled in the BNC box has qualified you for the 25% penalty - what you should have filled in depends on your particular circumstances, for which you should probably seek professional advice from someone who knows both tax systems. There might be a link on this site under the Useful information header, I seem to recall that the question does come up occasionally.

(Many Morrison) #5

On the form 2047 in section V "Bénéfices des professions non commerciales" ,on the form 2042 box 8TK and it is also on form 2042C Pro in box 5RI, is this correct?

If not how long do i have to amend this?

Thank you.

(Simon Armstrong) #6

(Many Morrison) #7

I declare and pay my tax in the UK and declare the UK income also on my French Tax return. What exactly are you questioning?

(Many Morrison) #8

The UK income in question is from my self employed UK consultancy business, and the submitted figure has been multiplied by 1.25.

Is there a way to avoid this?

Would it make a difference if the income was verified by a UK Accountant?


(Many Morrison) #9

The submitted income figure had already be converted from GBP to euros.

(Many Morrison) #10

What mean is that the figure i submitted on the tax return (after converting from GBP to Euros) is shown, but the line below it is my submitted figure multiplied by 1.25, so an increase of 25%, and it is the increased figure that has been used to calculate my fiscal reference on the avis.

(Simon Armstrong) #11

(Many Morrison) #12

Thanks Marie, I'll take a look at the link.

(Alex Thurgood) #13

As you don't mention the type of income, it is a bit difficult to second-guess...for example, if the income in question relates to a professional activity, such as freelancing, it could be that your local French tax office has decided that this is "unverifiable" professional income (bénéfices non-commerciaux) and as such will have an automatic 25% penalty added (and not multiplied).

See for example here, or this page which references that link

Basically, the tax authority applies a multiplication coefficient of 1.25 to the total income declared where parts of that income are not subject to control by a registered accountant or an approved company management association "association de gestion agréée).

However, as I mention above, without knowing the circumstances of the declaration, all just hypothetical.

(David Rosemont) #14

That would apply in the case of businesses only I believe. It seems to be a default percentage and can be challenged. I agree that properly qualified advice should be sought. Thank heaven I am retired and running a business in or from France.

(Marie-Claire Gauthier) #15

I suppose you mean that 25% was added to your UK income. Apparently, this can happen if you declare commercial or industrial profit.

I really don't understand why, you'd need to ask a chartered accountant why, and how to get round it!

(Simon Armstrong) #16

(David Rosemont) #17

There will have been an increase based on the exchange rate but if you take it month by month it will not amount to as much as that. It's come down again, and by quite a bit, since Christmas, as the markets are very unstable. If you income from the UK is a pension, or rents, it's likely to have gone up a bit. This fluctuation is pretty alarming as regards ISF and could well take many expat Brits over the limit. The relevant date is 31 December for that, and the exchange rate at that time was high. If you have capital or investments in the UK, or have the benefit of them, then you may well be affected.

(Many Morrison) #18

No i converted my UK income from GBP to Euros using the published exchange rate, and entered the Euro amount onto the tax return.....

(Simon Armstrong) #19