UK Ltd company with self as employee (France)

[Helen888]

I've heard of people (living in France) setting up UK Ltd companies and employing themselves through them so taxes etc. in France are just declared as an employee. I just wondered if anyone knew what benefits there were to this. I don't need any particular qualifications to conduct my trade in France due to work record so setting up as profession liberale would be fairly easy...i just wondered if having a UK company eases the financial burdon in any way?

[Nick Trollope]

I can't see how it would, as Employers contributions are at about 60%.

[Will]

As Nick indicated, any small tax saving would be more than outweighed by massive social security charges. Although the idea has been mooted in articles by accountants that crop up in some magazines and on websites, it will be far more satisfactory overall to register in your own right in France.

[Mpprh]

Hi

I haven't check into this recently.

60% may sound a lot, but I seem to remember there was an expensive flat rate for the first year ?

Peter

 

[Nick Trollope]

The flat rate thing applies to the first 2 years of an self-employed persons activities.

Employed people pay about 20% of their gross as social charges, monthly. On top of that, the employer pays a further 60(ish)% of the gross as their social contribution. The result is that the employer pays out about twice what the employee takes home. As far as I can tell, if you are the employer and the employee, you are better off "self-employed", as the overall costs are lower and the benefits the same.

Income tax (for those few who pay it) is not dealt with like PAYE, it is done annually.

[Babnik]

I don't know where the 60(ish)% comes from? I work for a UK company (unfortunately not my own), and am resident in France. I pay both employee's and employer's contributions. I pay around 45-50% of my gross wage in contributions.

[Nick Trollope]

Exactly. Total cost is about twice what you take home....

 

[Jo53]

[quote]I don't know where the 60(ish)% comes from? I work for a UK company (unfortunately not my own), and am resident in France. I pay both employee's and employer's contributions. I pay around 45-50% of my...[/quote]

Babnik, does your UK company get let off its employer's NI contributions in the UK? And if it does, does it pay the equivalent into your pay packet instead, to help you with the French contributions? Also, are the huge amounts you pay in cotisations deductable from your impots?

I'm interested to know as I might be in the same situation one day.

Best

Jo

[Motorhead]

I wouldn't say exactly ,Nick.

 If the employees take home pay is lets say 1,000 a month and, if as you say, the employer pays twice that then the whole lot comes to 3,000. However if Babnik is on that 1,000 a month nett wage which is 50% of the total then that total must be only 2,000 - quite a big difference!

Now don't quote me on this but I remember reading that the employers contribution in France was (only) 40% and if you add this to the employees contribution and then take away an allowance for UK NI not having to be paid then it leaves you with about the 50 % that Babnik mentions.

[Babnik]

Jo,

Uk company doesn't pay NI contributions in UK, but gives them to me to pay off part of the social contributions in France. I find I'm basically paying one in three wages to the french government.