I’m a french resident since 10 years and own a Ltd. in UK 50-50 since 4 years now. The business is a piano school, and the other director (my sister) lives in the UK. I manage the administration of the school remotely from France.
Up until now I haven’t paid myself, but I want to start doing it this month.
I am looking for some reccomendations on accountants that know both french and UK systems to help me decide the best way forward. I’ve got questions about PAYE in uk, NI, pension in France, etc.
My UK accountant can’t help with the french legilstation, etc.
Anyone has any contacts I could get in touch with? French or english speaking, it doesn’t matter.
I was in a similar position Elena - actually I wound up my UK company only last year. We used Shreeve Hallam Jones: http://www.shreevehallamjones.co.uk/
If anyone knows anything about this I would be quite interested to know if in such a situation there could be issues with the Ltd. being a ‘Foreign Controlled Company’. Someone hinted there might be some regulatory or tax issue this could fall foul of but I have not managed to find out.
I seem to recall that the France UK dual taxation agreement deals with this issue in some detail, have a read and see what light it sheds on your question?
I might be a little out of date, but there was no issue when we moved to France (10 years ago), as long as one if the directors was a UK resident (like Elena’s sister). I in fact owned the whole company; my wife and I (both French residents) were directors, and an old friend and regular contractor was our UK resident director. (Brexit might have changed things though I guess.)
Hum. Thanks both. Thought I’d read the DTA but hadn’t seen anything. Geoff are the things to beware of HMRC, Co. House or some other regulation?
Thanks a lot, Geof_Cox. Will get in touch with them!
Now you are asking. It is a very long time since I had to worry about any of this and I do not trust my memory, or I would have been more specific.
I seem to remember that to avoid the danger of the company being deemed tax resident in France it needs to have a UK resident director and/or to be genuinely active in the UK, with a head office / production facility there and ideally employing workers in the UK and not in France. (I, am pretty sure that company residence is covered in the DTA, there is a whole section about what does and does not constitute a permanent establishment in France etc etc etc.)
The other issue I seem to remember arises if the director who is resident in France does any work for the company rather than simply being a sleeping partner. Under UK law a director cannot take 100% remuneration in dividends, he has to pay himself at least a minimal salary, and if he neither lives nor works in the UK he cannot keep himself on the UK payroll, he has to go through the French payroll system with all that that involves.
But it is over 20 years since I got rid of my UK company. There may be new rules since then.
I think you may have touched on an important point Sandcastle. Doing the administration remotely from here means you are working on French soil. So you will have to ensure everything is properly registered here, and you pay the cotisations (NI equivalent). France is quite strict on this, and it will come to light through your tax returns so best to get it sorted first.
Thanks Sandcastle. Luckily as a frontalier not working nor administrating in France and a couple of other reasons it looks like nothing has been transgressed. Some of what I looked up previously has come back - there’s not even a need for a rep office. I was warned a very few years ago not to perform any work in France unless something very serious and long duration was offered. It seems sticking to this advice has avoided more than one complication since!
Btw did you know the lifting of the 25% tolerance of work done in France, for frontaliers and other employees of foreign employers, has been extended to June 2022?
I assume the residence permit allows you to work in France?
I don’t know whether there is any useful information in either of these:
This Remain in France Guide also has several links which might also be of relevance
and there is this article
For us it was very straightforward - the UK company operates with respect to Companies House and HMRC exactly like any other UK company.
As directors we were paid a small wage - on the UK payroll - just over the UK NI threshold, and any further money taken as dividends. The company also paid our ‘home office’ expenses.
All income was declared on both UK and France tax returns, but there was no double-taxation - on our wage we paid only UK NI, not French cotisations. I know others contributing here think it is more complicated than this - we’ve touched on this before on SurviveFrance - but this is how it worked for us, for a decade until quite recently.
The only unusual thing about our work was that it was not in either France or the UK - our company contracts were almost all from various third countries, mainly in Eastern Europe, Asia and Africa, apart from a little teaching at UK universities.
Geof, the issue is where were you physically when you did the work that earned your wage? So may not be the same situation as the original poster. The link that Elsie posted above shows quite clearly that the OP needs to regularise her position carefully.
You were UK resident first and then moved to France, right? So you had a NI number and you kept being on the UK payroll.
The difference with me is that I do not have a NI number, so not sure if doing it that way (small salary + dividends, which is what we agreed upon with my UK accountant) would be ok.
Also, since I don’t have (and cannot have) a NI number, my time worked for the UK company might not be counted towards retirement pension time in France.
I’ve gotten in touch with Shreeve Hallam Jones so I hope to get it sorted soon.
If I remember correctly from our meetings with the accountant when we started the company in 2018, at least in our case, that is not an issue.
Our Ltd. operates only in UK. All customers are from UK, operations are phisically held there, since it is a piano school (not online). Also, my sister who holds 50% of the company lives there (and has been living there for the last 10 years). If I remember correctly, what made the difference is that all the decisions had to be made in the UK (board meetings, stuff like that?).
But I think best is to get expert advice as every case is different.
Yes, sounds as if you need specific advice. Just do make sure you ask lots of questions about your position working on French soil, and get them to back this up with factual official information.
I think quite straightforward to ensure the company remains UK based etc, but a Director actually working from here is different.
Thanks @JaneJones, that’s what I am looking for. I’ve read tons of links from uk gov, french URSSAF, accountants articles, had discussions with my UK accountant, but there are many questions that I can’t get answered like that. I’ve got a list of questions ready and depending on the answers to those I might have more questions coming.
I do not recall it being so very complicated.
As far as employment, social security and personal taxation is concerned it seemed to me the central issue to resolve was whether you fall under French or UK tax and social security law. This as you say is ascertained by asking a series of questions looking at the specific details of your situation. Normally it is pretty black and white, particularly if you live and work in the same country as seems to be the case here, I do not see why there is a doubt. It is more complicated if you live in one country and work in a different country or if you work in more than one country. Then once you are clear on that, everything else falls into place, you simply follow the rules.
Indeed - the accountants I linked are very expert in these complexities and will know (the article linked by Elsie is interesting, but does contain a fair few ‘maybe-s’).
For us, there was no simple answer to the question ‘where were you physically when you did the work?’ It was an international training and consultancy business, so very different from Elena’s.
It would be impossible to answer the question of ‘where?’ in our case - it would be a list of dozens of countries, changing constantly and often many at the same time! (It was not unusual for me teach say a training course over a week or two in some country, but at the same time work on projects in several others - very frustrating when you’re in some beautiful city but have to stay in your hotel room and work because you have to prepare for next week when you’ll be somewhere else entirely.) Some of the work (research, preparation, etc) was undoubtedly done in France - but no trading was done here - the income sources were all other countries - which might be the crucial thing.
But the issue is, where you are, physically, when you do the work. If you are sitting in a hotel room in Italy working on a project in China, you are working in Italy.
This is relevant to company taxation but not to personal taxation, surely? You are employed by the company and the company pays you a salary. The sources of the company’s money out of which it pays salaries, is irrelevant to employees,