UK registered businesses

[Viv]

I don't want to discuss the ethics of this, just the advantages / drawbacks.

I am aware that I can start a business as a sole trader, in the UK although I am resident in France.

I am also aware that I would be required to pay Income Tax and N.I etc to the UK and not France.

As a UK registered 'Sole Trader' living in France, what would I have to pay the French authorities?

Before 'outraged from Tunbridge Wells' starts raving, I am merely curious.

[Iceni]

We went through this with the IR in the UK who were very helpful. The advice was simple - where you work - ie where you stand or sit to do the work is where you pay tax - it is slightly more complicated but if you are working and living in France you do not have a choice.

I find the following interesting and wondered where you got your advice but perhaps that is me being Outraged of Aubiac:

I am aware that I can start a business as a sole trader, in the UK although I am resident in France.

I am also aware that I would be required to pay Income Tax and N.I etc to the UK and not France.

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Good French accountants are worth their weight in gold - they will give you better advice than I can.

[Will]

The advice I have received is the same as that given to Di. I think many of us would be interested to hear the source of the original questioner's 'awareness'. As far as I know, the only ways you can live, fully and legally, in France and pay tax and NI in Britain are basically:

1. as a long-distance commuter, i.e. travelling to and carrying out the actual work in Britain while your residence is in France.

2. On a temporary basis, using the appropriate E forms (e.g. E101 and what was E128, but now European Health Insurance card). This will only give up to two years cover in France, and is not really the correct route if you intend to reside permanently in France.

Of course, anything is possible, but is it either legal or financially viable? You could get into the situation where you pay company tax and an NI contribution to Britain, but personal tax and social charges in France.

[Le_Jars]

What if, for arguments sake one was living here but said they were still living in the UK (on and off maybe - how do they know?) and therefore paying UK tax? with a wife who lives here permanently and runs a small business here and therefore pays taxes/cotisations here.

Only asking like

[Viv]

This is where I'm at.

I contacted Business Link, London and they told me that not being resident in the UK does not exclude one from having a UK registered business . This to me makes sense eg The Glaser Brothers own Man Utd but are not resident in the UK.

I would of course be sent a UK self assessment to fill in and would therefore have to pay taxes to the UK government. So it seems straightforward so far. It's the French end that confuses me!

 

[Will]

That is quite correct - you can have a UK registered business wherever you live.

As far as I can tell, the problem in the case of France is that, despite Brussels' efforts at legislating for free trade and free movement of labour within Europe, and despite dual taxation agreements, it is not possible (legally) to actually carry out work in France and pay tax and social security charges to another country, except on a temporary basis. There is a requirement in France that if anybody in France works for a non-French company, then the company has to set up a French subsidiary to employ that person, and the subsidiary company has to pay employer's social charges - as well as the emplyee paying tax and the NI equivalent in France. I think they have got you on that particular point.

I couldn't possibly comment on just not telling the authorities. I'm sure people do it, but there are possible problems if you need health care beyond what you can blag with an E111, or the card equivalent. Also the officials do carry out controles, although most of these are looking for illegal hotel workers and construction workers on the black, how any non-French people earn a living is something they do check up on if there is a suspicion of black-market work.

You will find the French Chamber of Commerce in London is a very good source of help and information if you have a specific project or problem to discuss.

 

[Viv]

Thanks for that Will, it's really and finally cleared things up in my mind.

I wouldn't dream of working on the black but thought that there may have been a loop hole, which having read your comments has been well and truly filled! But its better to know now - so thanks.

[nimportequoi]

Le Jars,

I am in a similar situation to the one you describe. I have a business and also work in France and pay cotisations here for myself and my daughter. My partner and I jointly own the house in France, but he works for a UK company and has another small house in the UK. He comes home (to France) every other weekend. From having spoken to my French accountant, he said that if we were married, my partner would have to pay tax in France and the UK (i.e his income would have to be taken into account for my French tax return). He would then be reimbursed for the tax paid in France, although I think this is a time consuming and complicated process. As we are not married, so there is no problem with him paying UK taxes and me paying them in France, our incomes can be considered seperate.