Living France, Working UK ???

Minouette · December 9, 2004

I have lived in France for 2.5 years. During that time I worked for a French chap which put me into the French taxation and social security system. It all ended disastrously but that will be the subject of a different post.

I am currently in a no job, no cash situation and desperate for work. The job seeker people are unable to help (its very rural round here) and Assedic have told me I am ineligible for any unemployment money. Luckily, I have friends and ex-colleagues in UK who are pulling a lot of strings to get me back into my previous line of work… freelance PR consultancy.

The plan would be for me to work, via computer and telephone, in the English language, with UK companies who would pay me in £sterling into a UK bank account. I would remain in France but they envisage quite a few flying trips to UK for meetings, hands-on stuff etc.

I’ve read a lot of other threads but I am still very confused as to what this would mean from a business set-up viewpoint. Do I have to set up a French business? Or a UK business? Or just do the work and declare my UK-earned income on the annual French tax-form? And if I decided to do additional work for English people here in France (finding artisans and overseeing renovation work for non-French speakers, for example, but probably paid in UK) would that change the situation at all?

Many thanks

Minou

Pangur · December 9, 2004

If you are living in France, and accessing French services for the forseeable future, it seems logical that you will have to set up a business under French regulations and pay French tax. Would your UK clients be employers or just paying you on a consultancy basis? There are ways of remeining an employee of a UK company and paying UK tax, but from my sketchy understanding of it, it wouldn't be applicable in your situation.

I started a thread on a similar topic (which you have probably read through) and the summary seems to be: speak to a French accountant. My husband is currently organising it so he can work in France for his UK employer, but we will be paying French taxes.

Minouette · December 9, 2004

Hello

My UK clients would be paying me on a consultancy basis. They are very unlikely to want to pay me in Euros, or take me on as a member of staff. In fact it would probably be better if they didn’t even realise I was working from France! In the past I frequently worked remotely for clients – living London, clients in N.Yorkshire, for example – but they can’t seem to get their heads around living France, working UK for some reason. Telecommuting is not yet a true reality, it seems!

I’m happy to pay French tax and whatever else is necessary but I have heard that business set-up costs in France are horrendous and, given that the work could be sporadic, I’m rather loth to go that route unless absolutely necessary. I’ve also heard that whether work is incoming or not there are monthly cotisations to be paid to a never ending list of caisses. I think the portage idea takes care of this for people who are living AND working in France, but I don’t think it would work with someone like me with a foot in both camps.

Speaking to a French accountant is my Plan C but, given my impecunious state, I was hoping to raid the forum members’ experiences to begin with (or maybe swap them for some PR advice?) so that I would only have to take the very, very serious/difficult questions to him.

Thanks for your help

Minou

Nick Trollope · December 10, 2004

Hello

I would suggest that the Chambre de Commerce be your first port of call. They will advise you & it won't cost anything (yet). Be guided by them.

As pangur suggestes an accountant would be the best route. You will probably be able to find one that is a) not too expensive & b) will consult initially for free, on the promise of lots of paid-for work when you are rolling in it.

You could, of course, just open a UK bank account and start trading, worrying about the legalities when you are in a position to pay for them. (Lots will whinge about this suggestion, but the French Authorities will not be amongst them).

Will · December 10, 2004

I have answered this question several times based on my own experiences and situation - though in general people don't like the answer.

I think my position mirrors yours quite closely. I do exactly the same work in France, for the same clients, as I did in UK, and am paid in sterling - so the only difference is the location of my bum on my seat. And it is that location that counts as far as tax, social security etc is concerned.

Unless you get wish to get involved in deception you will be a French resident, on the grounds that your main home is in France, your family/dependants are in France, and your main economic activity is carried out in France. Quite apart from the number of days you spend in France/UK respectively, any one of these is sufficient for the French tax people to deem you French resident. That means you have no choice but to register yourself and your business in France.

How you do that depends on what work you do - your local URSSAF or ANPE may be helpful, though a French accountant is probably the best person to advise you, but I note that you think consulting an accountant is a bit of a last resort. If you are worried about fees I would point out that many regions have advisory bodies for setting up and running businesses - ours is called CNGE (centre Normade de gestion des entreprises) and were very helpful, and didn't charge for initial advice.

In your case I would imagine you would set yourself up as a travailleur indépendant (you would probably come under the heading of profession liberale) through URSSAF, which will give you a Siret number, allowing you to trade. My experience was that set up costs were negligible as we did it ourselves, but if I had used one of the so-called taxation and law specialists I would have paid several thousand euros.

You will be liable to cotisations, as you correctly state, but these are not as bad as many will tell you if you look at them realistically and compare with what you would pay in UK for NI/social security, pension fund, medical insurance etc. There are ways of limiting these in the first years of business but to take advantage of these you really do need an accountant's advice, or to be really fluent in not just everyday French, but French taxation-speak. Even so, you need to budget for 40% to 60% of your income going to French officialdom in one form or another - but it doesn't just go out, what you get back includes unrivalled social and medical benefits.

It's when trying to limit cotisations themselves that people come unstuck. For instance many people will tell you that you can operate as a French subsidiary of a UK business, which is perfectly correct, but for most people at the end of the day you will end up liable to pay out far more - e.g. taxes in both countries, employer and employee social security contributions etc. Again, if you are considering this option, professional advice is essential.

As you have already lived in France for more than two years and presumably left the UK system this paragraph won't apply, unfortunately, but I will mention this important point again for the benefit of others. As an EU citizen you may be entitled to carry out your UK work overseas (i.e. in France) for up to two years, still paying UK tax and NI, provided you can get a suitable E-form to allow you access to medical cover etc in France. This will depend on things like the type of work you do, your NI contribution record etc. You will have to talk to DWP in Newcastle or an Inland Revenue office about this. This is an invaluable option if you aren't sure how things will work out in France and don't want to commit yourself to setting up there from the outset - but when the E form cover runs out you have to either go back to UK or register in France, as above.

I'm surprised that having been employed in France and presumably contributed to the social security system there is no help available for you. Was your previous employer operating legally or had he conveniently forgotten to add you to the official payroll, pay employer cotisations etc? I think this is probably the first question you need to address.

Nick Trollope · December 10, 2004

As an EU citizen you may be entitled to carry out your UK work overseas (i.e. in France) for up to two years, still paying UK tax and NI, provided you can get a suitable E-form to allow you access to medical cover etc in France. This will depend on things like the type of work you do, your NI contribution record etc. You will have to talk to DWP in Newcastle or an Inland Revenue office about this. This is an invaluable option if you aren't sure how things will work out in France and don't want to commit yourself to setting up there from the outset - but when the E form cover runs out you have to either go back to UK or register in France, as above.

Bill

I have spoken to the SS in Newcastle who INSIST that there are NO e-forms for anyone living/working in France unless 100% (or damn near close to it) of their work is carried out IN PERSON in the UK, ie. they commute. You UK NI contribution only have an influence on your future pension entitlement and there is no point in establishing these until you retire. They insist that it is necessary to join the French SS scheme to gain entitlement ot medical cover outside the UK.

We (Tina & I) are in the difficult position that the USSARF will not/cannot bracket us to enable us to register with CPAM. CPAM have now said that we must now make an application to them based on our earnings (paid gross in Sterling) - proven by bank statements, as, because we cannot register as anything (until the USSARF pull their fingers out of their USSARS) we cannot keep "books".

It is not at all easy eh? I wonder why people make the conscious descision to work on the black.

December 10, 2004

I have come across French people who operated UK-registered businesses in France because of the lower costs of setting up and running a limited company or equivalent. They paid taxes in France, as virtually all French residents should, and social contributions.

The services you are proposing within France would necessitate a separate business registration to the PR wherever the latter business is located.

Hagar · December 10, 2004

" I think the portage idea takes care of this for people who are living AND working in France, but I don’t think it would work with someone like me with a foot in both camps."

I have been looking into portage recently and have been told by a number of people that it is suitable for people residing in France but working for companies in the UK. The only tricky issue is persuading you UK based clients to accept a contract with the French based portage company. If you only have a handful of clients that give you work then this should not be too much of a problem.

Having said all that I have contacted 2 portage companies in the last month re setting this up and have yet to receive any replies !!.

Will let you know if I get any further info from them.

Hagar

December 10, 2004

In my experience the only way to get a reply from a French company is to ring and speak directly to the person responsible - not usually easy.

Jo53 · December 10, 2004

Minouette

I am in a similar professional situation to your own, except that I won't be working in the UK very often. I wish you all the best with trying to make a go of it here.

There is a special provision for lower cotisations for self-employed people whose activity is not carried out for more than 90 days per year. Maybe, especially in your first year, you won't work on French soil for more than 90 days? It is, I think, possible to pay UK NI contributions and NOT French ones if you are carrying out contracts actually in the UK. Speak to the DSS (or whatever it's called now) Centre for Non Residents in Newcastle. You would still pay French income tax, but we all know it's social security that's the problem, not tax.

I think, also, that if you opt for the micro regime you can ask to have your cotisations calculated on real earnings from day one. The official site www.apce.com is a good source of information, as is www.l'entreprise.com .

I'm not disputing that, in principle, we should pay into the French system if we want to live here. But there is a real cotisations trap for people who are just starting up and haven't got a regular income yet, and looking for ways around this is a matter of survival not a desire to cheat.

I recently had two quite informative free initial sessions with French accountants, one of whom I will be hiring to help with my declarations next year. They will usually give you a free initial meeting. As one of them emphasised to me, it's very important not to register with the URSSAF etc until you have the money coming in, otherwise you pay out cotisations 'pour rien'. It's not illegal to prospect for clients or begin your first contract (in a non-regulated activity) before you register, as long as you register before cashing the cheque.

All the best

Jo

Will · December 10, 2004

I have spoken to the SS in Newcastle who INSIST that there are NO e-forms for anyone living/working in France unless 100% (or damn near close to it) of their work is carried out IN PERSON in the UK, ie. they commute.

Nick - the relevant forms are E128, which is (was) issued with E101. There are others for specialised jobs.

However I can understand Newcastle's difficulty at present as the new European Health Card is designed to replace E128 (as well as E111 and certain other temporary forms). Although most European countries, including France, is issuing these cards, UK will not be issuing them until the end of 2005 so is in rather a state of flux at present - hence the 'was' in brackets above. Such forms seem to apply to those doing the same work overseas as they were in UK - in effect a 'posting overseas' and are of course for temporary stays rather than moving permanantly, though of course if you want to test the water before committing to a full time move, and are maintaining an address in UK, they are (were) a good solution.

I quite agree that it isn't easy, though it does sound as if your URSSAF is particularly bureaucratic and uncooperative. You seem to have drawn the short straw with whoever you dealt with at Newcastle too - we found we got a wide variety of answers from them, many of them just plain wrong. Fortunately we knew what should happen, having been advised by senior Inland Revenue people who knew the system, so we kept hammering away until we found somebody who gave the answer we needed.

Among the misinformation I received from Newcastle was that an E106 form didn't entitle you to work in France; this is not the case, though it does appear that if you take on a permanent job you are expected to join the French system so I suppose it's just another of those half truths.

Minouette · December 14, 2004

Many thanks for such helpful, info-packed postings… all printed off and being studied very carefully! A few people asked specific questions and I’ve replied to separately. I was going to do it as one big posting of my own but it started to get rather unwieldy!

Thanks again,

Minou

Minouette · December 14, 2004

Hello Will

I am already registered as a French tax-payer and, having been employed, I have a Carte Vitale. I’ve been told by the social security people that this remains valid until 2007 even though I’m unemployed and therefore not contributing. I didn’t feel guilty about this lack of contributions until recently as, despite a liking for nicotine and the odd glass of wine, I seemed not to need medical assistance! I’m now having a course of dental treatments though, using my Carte, so perhaps I should go and double-check my social security liability just to make sure I’m not draining a resource to which I am not entitled.

Was it because I had registered as a job-seeker that I was considered exempt? I didn’t renew my registration last month, basically because I had decided that I would be better off setting up on my own so it seemed pointless, but if it has an impact on my social services status then maybe I had better get myself re-registered pronto until such time as my own business (and thus I’m paying cotisations) comes into being?

I’m not entirely sure why I was not entitled to any dole payment, however small. I worked for six months on an ad hoc unpaid basis to help a guy set up a business importing an American product into France via its UK distributor. The French guy spoke no English which is where I came in….. Once we had a proper office I was supposed to become a part-time salaried employee. He did put me on the books but not at the time that we had agreed… it didn’t happen until a full six weeks later. He fudged the books to pay me for two of the weeks but I have never been paid for that first month, a month during which I must have worked double the legal maximum! He then sacked me 4.5 months after I actually started work, which was 3 months by his dodgy reckoning.

Do you think my non-eligibility is due to not having worked for long enough, or because I was dismissed?

He also used my name (and two others) in order to start the business in the first place [because he was still employed himself and wanted to keep the set-up secret] and, as far as I know, I remain a 10% shareholder although I did not put up the 10% capital investment. I certainly don’t want to be liable for anything if his business goes down the pan but I have no idea how I get out of this... any thoughts?

Now, I’m off to check the web for a local centre de gestion, as you suggest.

Oh, one more question… travailleur independent and profession liberale sounds spot on. However, if I plan to offer services to clients, but in very different fields, can I still do this with just one company, ie using it as an umbrella for a range of different services? Or (big loud groan) would it need two separate companies? Surely I wouldn’t have to be double-cotisised or cotisated?

Many thanks

Minou

Minouette · December 14, 2004

Hello Pucette

I don’t understand what you mean by ‘PR’ in your posting. PR to me always means Public Relations but I’m sure that’s not the case here. Could you explain, please?

And if you have a moment could you also take a look at my other posting re taking an employer to the Tribunal. Deby thought you might be able to help and I’d be most grateful.

Many thanks

Minou

Minouette · December 14, 2004

[quote]Minouette I am in a similar professional situation to your own, except that I won't be working in the UK very often. I wish you all the best with trying to make a go of it here. There is a special ...[/quote]

Hello Jo

It was very useful indeed to know that I could prospect for clients before setting up a business. Do you know if Public Relations would be considered a non-regulated activity?

I’ll look into the micro-entreprise side and see how this stacks up alongside Will’s suggestions about travailleur independent and profession liberale. I’m rather hoping to work for more than 90 days a year (quite apart from liking the odd meal I have a house to renovate!) but it would all be carried out on French soil. I reckon the trips to UK would just be the initial ‘pitching to the client’ bit and maybe a tiny bit of hand-holding if really necessary. I have no problem with paying either French or Brit tax or social security… I just needed to know which type I legally had to go. Everything seems to point to France which is actually better for me as I am already a French tax payer and Carte Vitale holder.

Best wishes

Minou

Will · December 14, 2004

Minouette (lovely name)

I think, though I'm far from certain, that you should hang on to your carte vitale. I'm sure that if the authorities wanted it back they would ask for it and/or cancel it.

The fact that you have worked in France does make your situation very different from most other forum users. I don't know why you are getting such a raw deal - I've heard so many stories of people who have arranged things so they get sacked, so they can become professional alcoholics existing on handouts.

Also I don't think you should get hammered for two lots of cotisations, though you may need to register two distinct businesses. Again, you would need to get proper advice on that through URSSAF, ANPE or an accountant. Our situation, for example, sees me registered self-employed and paying cotisations, Mrs Conq employed here (and paying employee contributions): we also have a small B&B offshoot which is properly licenced and registered with the tax people as a micro entreprise but we don't pay further social charges on that. Or maybe B&B is a special case?

Minouette · December 14, 2004

[quote]Minouette (lovely name) I think, though I'm far from certain, that you should hang on to your carte vitale. I'm sure that if the authorities wanted it back they would ask for it and/or cancel it. ...[/quote]

Well, I suppose it all depends on knowing how to play the system, and it wasnt on my school curriculum! Even when I was made redundant once in UK (many years ago) I didnt claim the dole as my husband was delighted by the turn of events (he thought - quite wrongly - that I would be far happier as a housewife) and I knew I could get another job very easily so it didnt seem fair to take money away from those who needed it. Maybe I need lessons in how to play rough??

Ta ta

Minou

December 14, 2004

Sorry, I mean PR consultancy...

I understood that you were intending to work in two areas,

1 - freelance PR consultancy.

2 - additional work for English people here in France (finding artisans and overseeing renovation work for non-French speakers, for example, but probably paid in UK) would that change the situation at all?

They would be separate businesses.

Each business would incur cotisations but the one which earned the most money would be liable for your cotisations for health care, pensions &c, the other would be lower.

Hope that is clearer.

Clare ElizabethClare · December 20, 2004

Hello

I'm new to this forum, and probably won't spend much time here as I supposed to be working, but wanted to post as your experience quite similar to mine - I'm based in rural france working exclusively UK and other northern european clients

1. It's probably worth keeping up the job seekers registration, you can do it on line, and it may qualify you for some kind of help in the future

2. What worked for me, was once I had three months without income (unemployed with no unemployment payments, is that I qualified for the RMI, which is minimaux social, as an rmist, you have to do a lot of humiliating things, such as meeting with a social worker to discussion your reinsertion into society, but it also gives you access to apply to the ACCRE, which is a year's exemption from almost all cotisations. You have to prepare a business plan, and submit it to a commission, but there are lots of organisations that will help you do it. You can't apply for an ACCRE, if you have already started. Then I registered as a profession liberal, I had a great boutique de gestion which helped me with the paper work, and generally held my hand. Most of my clients were quite happy to pay into my French account

let me know if there is any more I can help with ... I'm starting my second year and worrying myself about how bad the cotisations can possibly be, but then again we do pay NI in the UK,

Minouette · December 20, 2004

[quote]Hello I'm new to this forum, and probably won't spend much time here as I supposed to be working, but wanted to post as your experience quite similar to mine - I'm based in rural france working exclu...[/quote]

Many thanks, Clare. Very useful info that I would never have known existed!

Best wishes, Minou

Living France, Working UK ???

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