Cross Border Working

[walt]

Having read many of the posts that deal with the issues of being resident in France but working for a UK-based company I am still not sure what my tax and social charges liability would be as well as that of my employer. I will work for a UK company and split my time working in both countries - from home in France for my employer's UK clients and on these client's sites in the UK. I have consulted an French-based accountant who is also a CA in the UK and he did not clarify this point. Instead he replied with this -

"I copy below from my consultation:

 

As

a French resident you will be taxed on your income from the UK company, both

that income earned while working from home in France, and the income from

working in the UK.

 

Social

charges are payable on most types of income in France, including employment

income. However as these are deducted as source, they would not apply to your

income from the UK and you would therefore not be

chargeable.

 

You

can ask your employer not to deduct NI from your salary on the basis that you

are no longer resident in the UK. It will ultimately be up to the NIC

contributions office if they accept this or not."

[shimble]

no expert but yes if you are resident you will at least have to declare your income in france resident = more than 183 days per year you will thhen pay impot sur revenue on the income you declared as far as the rest that will be a quagmire. you may well need to take assurance malady if you are not in france more than 183 days per year it will be easier if you are in france more than 183 days per year find out exactly what you need to pay and how much. at the frenchside be prepared to pay through the nose talk to another accountant and seek advise juridique and then verify it

[Nick Trollope]

"I copy below from my consultation:

 

As a French resident you will be taxed on your income from the UK company, both that income earned while working from home in France, and the income from working in the UK.

 

 

This is certainly true.

 

Social charges are payable on most types of income in France, including employment income. However as these are deducted as source, they would not apply to your income from the UK and you would therefore not be chargeable.

 

 

This certainly not true. There is no "dual taxation" agreement for social (NI) contributions, which make up the larger proportion of French "taxation". As a French resident (tax resident, not domiciled), you will be liable for them (all of them), regardless of where your income is earned.

 

You can ask your employer not to deduct NI from your salary on the basis that you are no longer resident in the UK. It will ultimately be up to the NIC contributions office if they accept this or not."

 

Again, not true. If you are resident in France, then they cannot deduct UK social charges. They can deduct income tax, which will be taken into account by the French authorities.

 

Is this accountant actually qualified to act in France? There is a growing band of UK trained (& qualified) accountants operating in France, who don't kow how it works. IANAA, but I have had years of experience of running UK businesses and being employed in the UK, from France.

 

 

[Will]

What the accountant said about French social charges is sort of right, but this assumes that your employer does what he is supposed to do, and employs you though a French subsidiary. I tend to go along with what Nick says though, because if your employer had a French subsidiary then the answers to your questions would already be known. If you are resident in France, you will be liable for French social security charges - with either the employee contribution deducted at source by a French employer who pays the employer charges, or payable by you on a self-employed basis. It is vital to get this right otherwise you could end up being liable for both employee and employer charges, which together could amount to over 60% of your income.

The key would seem to be where you are actually resident. If you are in Britain for 183 days or more in a tax year, or for an average of 90 days or more over a period of several years, you can claim UK tax residency. Booklet IR20 explains it all. The French have additional criteria, so you could well be tax resident there too, but thanks to the double taxation agreement tax paid in one country can be offset against your liability in the other.

This does not apply to social security - these charges are payable in the country where you spend the majority of your time.

The question often comes up 'how do they know?' - the answer is that if you get investigated, they have ways of finding out.

 

[walt]

Thank you all for your responses. Makes you wonder what happens to those poor folks who follows the incorrect advice of an accountant like this. So I guess the key is to live in France but restrict work only to the UK. I guess I could negotiate reduced workdays with my company to only work in the UK and see if that actually leaves me in a better position than if I did work in France and had to pay all the social charges of employer and employee. The question is would the French taxman believe me if I said I did not work on any work-related documents on my computer or read my work email whilst in France?

[Coco]

Will's right about being very careful about the social charges if you are working for your UK employer from France.  This happened to me when I first moved here.  I was still working for my old company in London via email.  When I was registered with URSSAF they automatically created a French subsidiary of my bosses company at my address as I was the only representative of the company in France.  I was then landed with employers contributions of 40% and employees contributions of 20% (approx).  I had already negotiated with my boss that I would be paid my gross salary as I knew that I would have to pay income tax in France and I even knew that I would have to pay social charges here, so was paid the equivalent of the UK employers contributions to pay towards the French employers contributions.  We realised they were higher, just not HOW MUCH higher! [:(]  When I tried to argue the toss with URSSAF the response was that I should get my employer to pay the 40% for me (not much chance of that, as I had been the one who requested to work from France!) and when I said that I wouldn't be able to afford to live on only 40% of my salary and threatened to go and claim French benefits, the reaction was "Madame, you have paid all your social charges,  you are entitled to claim benefits if you haven't enough to live on, please feel free to do so, here is the address".  It was almost a relief when I was made redundant!!!

[walt]

So what happens if I only work in the UK and do no work at home in France? Or will URSSAF not go for that and say that regardless of whether or not I work in France I am still being treated as the French subsidary of my UK employers and so will have to pay both employers and employees contributions on my earnings for work done in the UK?

[Will]

duplicate post - please ignore

[Will]

If you work in UK, but spend the majority of your time in France, you will most likely be taxed in UK and be liable for French social charges. As to how this will worked out, you would have to check with a well-informed accountant is if you do no work in France you should not really be charged the equivalent of the employer contribution.

[Nick Trollope]

But if (as in my Wife's case) you sit behind a computer, in France, working for a UK company, then you will be deemed to be working in France.

[walt]

What Nick and Will say makes sense. I will get another professional opinion on this issue this week and when I have a clear answer I will post it here. Thanks to you all for your replies.