On the Payroll? or as a consultant?

[Pamela]

The plan is for me to continue to do about 20hours a week for my current employer when we move to France (e.g. about 1/2 time).  Based from home, office/PC work etc.

Does anyone know the benefits / drawbacks / implications of the two alternatives that I think would be open to me.

1.  To stay as a full employee of the company, I guess they would continue to pay my salary into a UK a/c, I'd have UK tax, NI etc. deducted at source as now and I;d have to transfer the funds over myself when required.  Presumably I'd have this UK tax already paid taken into account when doing my 'total income' tax return for the French.

2.Alternatively i could go as a consultant - less security for me I know, but I could probably ask for more money from the company because they wouldnt have to pay all the associated employee charges etc. - i would just send an invoice each month and they would pay it  - possibly even in Euros.  I;d have to declare all that as income in France and then pay tax on the total in France.

if it makes any difference, my husband will not be working (for a salary) - he will be working on our property etc.  We also have a young child so I believe we count as 2.5 for taxation purposes.

Anyone like to hazard a guess - or have any concrete information - as to which process would leave me better off?

thanks

Pamela

[Teamedup]

There have been a few posts about this.

As far as I can remember you would have to open some sort of company office here in France and pay the cotisations here.

[Maddie]

Beware whatever you do it will be chocka full of red tape.  My hubby is in the process of doing exactly the same thing, working full time doing exactly the same job as he did in the UK for the same company.

It is a complete minefield being self empoyed (ie a consultant) in France.  All my hubby wanted to do is pay French tax and social charges but his accountant (french) sent him off  ot the chamber of commerce as he was told he had to register.  The CCI then thought he had to take professional exams in France and it all got very fraught.  I recommend you check out some of the previous posts in this forum as there's been loads of useful stuff posted.

There are a few things you can do with your current employer in teh meantime adn I have sent some of the inofo my hubby got to your inbox.

Nicola

[Mpprh]

Hi

it is pretty straight forward to register as a profession liberale.

You prepare accounts with normal tax deductibles (including many costs that may well have been paid privately : phone, car, computer etc). No need to go to chambre de metiers, no courses. Your tax / social costs are a proportion of your taxable profit - no profit = virtually no contributions.

Check out this site for information : http://www.apce.com/index.php

Peter

[Babnik]

You can remain employed by your UK employer, but will have to pay French Tax and social charges if you are resident in France. It's not too difficult to set up (well I only say that as I now have it all set up) You can I suppose go independent, and write out invoices to your 'employer'. I'm not sure how this would affect you financially, but you'd still have to pay tax and social charges, and don't get the protection an employee gets here!

Steve

[Will]

We are assuming here - I hope correctly - that you are a UK citizen and your employer is a UK company (or at least European). If so you have another alternative: maybe not 100% kosher if you intend to stay in France permanently but perfectly OK if you are not sure how things will work out and don't want to commit yourself long-term at the outset.

Under EU law it is possible to continue your UK work in another EU country, while paying UK tax and NI and at the same time fully benefiting from the French health system without extra charge. You need to get the appropriate E form - it used to be E101/E128, but under the new E111 system this has changed; your tax office in UK or DSS in Newcastle should have up to date information. This lasts for up to two years in the case of France (other EU states have different agreements). This can often also apply to self employed people working in France (though artisans beware - although you may be legal as far as Brussels is concerned you may still be regarded as illegal by the French authorities unless you have all the relevant insurances etc). You will count as a 'migrant worker'; apparently not all trades and professions can benefit from this so without knowing exactly what you do I can't say if this will be a suitable option for you.

When the E-form cover expires, you will then probably have a clearer idea of whether you want to be employed or independent. Being employed is probably easier, but your employer will be liable for French social charges; not all are willing to pay these so you could end up footing the considerable bill yourself. I think at least one forum user has lost out through this.

While working as a migrant, you will still have to declare your income in France, but as you will have been taxed in UK you should not have to pay French income tax as well.

[Maddie]

[quote]Hiit is pretty straight forward to register as a profession liberale.You prepare accounts with normal tax deductibles (including many costs that may well have been paid privately : phone, car, compute...[/quote]

It very much depends on what you do as to how easy it is!  My old man needs NO qualifications to do his job in the UK (he does have some but they are not needed) but here in France, all of a sudden, it becomes potentially a job that needs exams, registering with the prefecture, bonding, registering as an agent commercial and goodness knows what.  And he does not even take any money himself, has no clients himself and makes no profit for himself!

Here's a bit from that APCE site

"Check whether your activity is regulated

In France, since certain activities are regulated (itinerant tradesmen, real-estate agents, driver’s education schools...), you must check whether you satisfy the required conditions (diplomas, experience, business card...) in order to carry out the activity you have chosen."

There seems to be far more "regulated" acitivities here than anywhere else and if it is regulated the going starts to get complicated!

Nothing in life is ever that easy!

Nicola

[Lavie]

From the APCE site:

"If you are the manager of a One-Man Business, the majority-shareholder* manager in a SARL (Limited Liability Company) or the majority-shareholder manager in a EURL (Partnership):

You come under the non-salaried worker system.

You must necessarily join the following 3 social security funds: CANAM (Caisse National d’Assurance Maladie) [National Health Insurance Fund], URSSAF [Social Security Contribution Collection Office] (for family allotments) and a retirement fund, either the ORGANIC (tradesman), or CANCAVA (crafts), or UNAPL (the professions).

The contributions vary between 27 and 35% of the income."

My questions are:

How come so many past posts say social contributions are around 50% when this doesn't seem to be the case? Am i missing a charge somewhere?

and Peter said:

"Your tax / social costs are a proportion of your taxable profit - no profit = virtually no contributions."   Again, many past posts say that hefty social charges are paid upfront - even before you've made any profit - and any adjustments re over/under payment are made the following year (which doesn't really help if you've just had a bad year!) So you basically have to pay high charges irrespective of your profit. Could someone please clarify which is correct?

 

[Coco]

Pamela

When we moved to France nearly two years ago I was in exactly the same position as you.  I was going to continue with my UK job, laptop-based, from Normandy.  Unfortunately, I was too honest with the DSS and admitted that I was moving to France permanently, otherwise, I would have had the option that Will is suggesting for up to two years.  However, by being honest it meant that I had to be taxed in France, even though I was still working for a UK-based company, because I was living for more than 183 days a year in France.  I then discovered that because I was the only representative of the company in France I was regarded as the employer AS WELL AS the employee, which meant I was liable for both sets of cotisations (similar to NI) and employer's contributions are almost 40% here!!!!!  I ended up paying nearly 60% of my salary in cotisations (the only upside was that I did not therefore earn enough money to reach the tax threshold!).  Here is France, when I explained the situation to URSSAF, ie that I could not afford to live if I paid such high charges, they gave me two solutions - 1.  I was entitled to claim any French benefits I needed because I had paid into the system, or 2.  My employer in the UK would have to pay the 40% contributions.  Unfortunately, I knew that my employer would not be happy to accept these extra costs.  In the two scenarios you are proposing, I think you will find that for option one you will run into the same problems that I encountered.  You could possibly go with option two but make sure that the extra fees you charge the company will cover the extra contributions you will pay here.

Needless to say, I no longer work for the UK company!

[Babnik]

Coco,

I find I'm paying around 42% of my wage in social contributions, but this includes what my employer would have paid in NI charges in the UK. I've worked out I get a few hundred euros less a month than i did in the UK (not including tax, but this is calculated on what's left after social contributions), but then again I don't have transport costs (which were a few hundred euros per month in the UK), although you then have heating costs etc etc. I still think I get more money than I would if I were to try and get a job in France (wages being a lot less here) And also I like the idea of working at home...no commute...no stress! If I didn't have the opportunity to work for a UK company from here, the move would have been a lot more difficult than it was!

Steve

[Pamela]

Thanks everyone for your really useful advice as ever.

It seems that the "easiest way" (I use the term loosely of course!) for my employers (and hence they are more likely to agree) would be for me to set up as self-employed consultant and invoice them monthly for the work I do.  This would mean no paperwork as such for them, no 'employee related' expenses for them and all the paperwork / charges down to me - but I would be fully 'above board', legal, covered for all health, social charges etc. in France. 

I think I could realistically ask for a higher pro-rata rate if i were going down this route and hence use this to cover the additional charges.  For example if I were to be getting a part time rate of 10K as an employee - I;d only end up with about 6K in my pocket but if I were able to persuade them to give me 15K I'd end up with 9K in my pocket? 

Does anyone see a flaw in this arguement?  (Except the fact that I have to deal with all the paperwork etc.!)

So the only thing to find out now is what the chamber of commerce would make of a 'salesy/marketying/scientificy type product manager' working in such a niche scientific market that I doubt theres an equivalent of!!

ho hum.... what did we all do before there was the internet to research these projects? 

regards

Pamela

[Babnik]

Can I just add, that as an employee, you have to do all the paperwork anyway, so it's no big deal for an employer. I just get everything gross!

Steve

[Babnik]

Oh and if you need a mortgage, I'd check with the bank if being a self-employed changes anything!!

Steve

 

[Emp]

I would stay on the payroll rather than be self employed.