Carte de sejour appointment - keep or cancel?

[alittlebitfrench]

Yep, that is forums for you.

No one is saying you are doing anything dodgy OP.

But....living off an income from a UK business to live in France !!! Hmmmm......it does sound dodgy to be fair.

I would still hold fire on the CDS. personally I don't think a carte CDS won't bring anything to the table.

BTW...Microentrepreneur is a structure for people who want to earn some extra cash. It is not really a business as such.

[EuroTrash]

"But....living off an income from a UK business to live in France !!! Hmmmm......it does sound dodgy to be fair. "

No come on ALBF, that's not fair. If it's done correctly and you have the correct French registrations and paperwork there is nothing dodgy about it. I'm sure lots of people do it.

And for the right type of business, micro entreprise is a perfectly good business structure as long as it's set up and run in good faith. You can turn over up to 64,000€ or thereabouts for a non commercial activity and 100,000+ for a commercial activity. Hardly beer money, unless you drink an awful lot of beer.

[alittlebitfrench]

It is an expensive business structure !!!

You may have a turnover of 64k but that is not what you are taking home and live off. I would cut that in half for starters.

If you are living in France and living off an income from a company in the UK you are going to be taxed twice. In the UK and France.

That don't make good business sense to me.

[EuroTrash]

Well that is true about high turnovers on ME, I agree that doubling the threshold was daft because to me ME is the wrong regime to be on if you earn anything over the previous thresholds. But, I spent over 10 years in France earning all my income through an ME and it was the most cost effective structure for me because my overheads were next to nothing.

You won't be taxed twice on the same income in any case because the UK and France have a tax treaty to prevent this from happening. The two possible scenarios for employees are that the company pays company tax in the UK, you carry out the work here as a French employee, pay your personal tax in France, and pay no personal tax in the UK because you don't live or work there. Or it could be that the company pays company tax in the UK, you carry out the work in the UK therefore you also pay your personal tax on that income in the UK, you declare it in France as part of your worldwide household income but the DTA is applied to that income to prevent you being taxed on it twice.

For every situation there is a set of rules and a solution.

[nomoss]

[quote user="Tartiflette"]Wow, in writing this post I certainly opened a can of worms. Some of the posts actually offended me as they implied that I am somehow "dodgy" when I have just set up a legal and legitimate business structure in France! But thanks for some of the more useful advice.[/quote]

Just to put the record straight, when I referred to a "dodgy occasional poster here" I was referring to a second rate property developer, who was in the habit of opening several fictitious accounts on this and other forums, and posting queries appearing to come from people who should not have been out on their own.

So, if the cap doesn't fit, don't wear it [:D]

[Cathar Tours]

Going back to the original post there are a few questions the answers to which may dictate the route they might take.

"My husband and I have only recently established residency in France".

How have you defined residency? Do you just mean you have decided to move there permanently?

"We have a UK-based company which provides the majority of our income"

Is this a Limited Company registered at Companies House from which you draw a salary or are paying yourself via a "bonus system" to get round paying employees NI? Where is the registered address of the UK company (roughly)?

"I have recently set up a micro-entreprise"

What will the micro-entreprise do i.e. is your intention to close your UK business and carry on the same type(profession) of business in France?

On top of this have you gained entry into the French social system i.e. healthcare etc. and if so how?

Alternatively I would say seek professional advice starting with your UK company accountant who should be able to pass you onto some professional who understands these things. Might cost you a bit but what you spend today could save you thousands later on.

Doing a quick search there appears to be loads of solicitors and accounts who specialise in this sort of thing.

[alittlebitfrench]

Nomoss

Just out of interest.

Who was the 'second rate property developer' you were referring to earlier ?

[nomoss]

Personally, I established residency in France by submitting a tax return in the year following our arrival, at the appropriate time, on which I stated, in the appropriate section, our date of arrival in France and where, and how long there, we were previously resident.

Good, reliable, and up-to-date advice on French taxation is available here [url]https://www.french-property.com/guides/france/finance-taxation/taxation/[/url]

[nomoss]

[quote user="alittlebitfrench"]Nomoss

Just out of interest.

Who was the 'second rate property developer' you were referring to earlier ?[/quote]

You know. The one who makes/used to make posts taking the pi$$ out of people just arrived in France by pretending to be such a person.

[Cathar Tours]

ALBF is sort of right about not needing a Cds in that if there is an agreement you won't be able to keep it as there will be a new card for Brits in the EU. However if you have a Cds it will make it easier to transfer to the new card. If there is no deal then you need to get one of these new cards by then end of 2019.

The French now have a website just for Brexit where you can find out anything you want like pensions, healthcare, business, residency etc.

https://brexit.gouv.fr/sites/brexit/accueil.html

[Tartiflette]

Thanks Nomoss,

That is exactly what I intend to do - I have already been to the tax office to try to inform them "we are here" but they weren't that interested and basically said come back in May 2019 with your paper tax return!

Registering my micro-entreprise should alert someone somewhere to the fact that I am here at least!

[Tartiflette]

Thanks Cathar Tours,

My micro-entreprise is nothing at all to do with our business in the UK (ie. completely different activity) and is my main activity here in France. I will be nowhere near the threshold limits so not too worried about that but it should still provide me with a reasonable income hopefully.

Yes, our UK company is registered at Companies House, and we just take a very small dividend (it ain't Apple!).

I will have access to the healthcare system via the micro-entreprise I am told (although I will need to chase this) but for now we have (expensive!) private health insurance.

Our UK accountant is great, but doesn't really have any knowledge of the French accounting system/dual tax treaty etc.

I just can't believe that there are not people living in France (legitimately and legally!) who own companies registered elsewhere in the world!

Thanks for your advice, however. I think we definitely need to pay a professional to get some advice on this!

[alittlebitfrench]

Eurotrash is the expert on all this.

They probably know more than French professionals.

There is another forum out there..

https://www.expatforum.com/expats/france-expat-forum-expats-living-france/

Where you will find a lot more technical advise. The mod there is very good at this.

[Cathar Tours]

"I just can't believe that there are not people living in France (legitimately and legally!) who own companies registered elsewhere in the world!".

If you're from inside the EU you can have your registered office anywhere you like within the EU. I know several people first hand who have their UK Ltd companies registered in other EU countries. One friend has his software business located in his house here in Germany which is also his registered UK Ltd. company address.

How this is done I have no idea but in his case I know his company name and have checked on the Companies House register and it is as he said. I have no idea how Brexit will effect this by the way.

One thing I can tell you which my Father learnt very early on in France never assume anything but then that's the same in Germany to. They don't do "joined up thinking" very well if at all so don't think because you have registered in one place means another knows you exist.

[EuroTrash]

Tartiflette, I'm sorry and I know you don't want to hear this but the issue is, that changing your residence to France also affects what you can and can't do in the UK, because your status there changes from resident to non resident.

So assuming you do actively work for the company, as opposed to being purely sleeping partners, you can't keep your UK business activities in one box and your French business activities in another box, and say "what I do in the UK has nothing to do with France and vice versa". The system doesn't allow that. You can't work in two different EU countries as if resident in both of them, paying into two different social security systems at the same time. EU and national law is very specific on this.

Under UK law, if you're not resident in the UK and you're not working in the UK, then you're not entitled to pay NICs, and any salary you pay yourself is not liable to UK tax. So you can't carry on taking your salary through UK payroll as you did when you were resident there. In fact the UK is very slack on this so in practice you probably could, but technically it's incorrect.

French law is very specific that all business activities carried out in France must conform to the French code de travail and be registered with URSSAF. The fact that some of the business activities you carry out in France are on behalf of a UK company and/or UK clients, doesn't make those activities outside the scope of French law if they are carried out in France.

https://www.urssaf.fr/portail/files/live/sites/urssaf/files/documents/5015-GuideCNFE-UK-2017.pdf

"Employees working in France must be registered with the French social security system regardless of their nationality or place of residence."

The fact that you also have another separate business activity registered in France, doesn't change this obligation.

You can live in France and own a UK registered business, no problem there. If you're a sleeping partner and you don't actually hold a function within the company, you just take dividends, you wouldn't have to register with URSSAF although obviously you would have to declare the dividends to the fisc But if do have an active role as an employee of the company then all the hours you work in France must be recorded and shown on your payslip and paid at SMIC or above etc etc etc etc.

Alternatively you can set up a French business structure that acts as a service provider to the UK business but that needs careful planning.

So there are various options, but what I'm saying is that setting up a micro entreprise here doesn't take the UK business out of the picture, the issues still have to be dealt with. If you don't want to take my word for it, please get advice from a specialist such as Blevin Franks or one of the other big names, because France takes any failure to meet one's social obligations very seriously.There's a lot of misinformation around on this issue and I'm sure that if you google you'll find plenty of people saying Oh yes you can do this - but they won't pay your fines for you if France decides you can't.

FWIW, some of the information here seems pretty sound:

https://www.accountingweb.co.uk/any-answers/living-in-france-but-ltd-co-registered-in-uk

- but even here there is some confusion, and this is a forum for UK professional accountants, so as you will be realising this is not a simple matter.

[Tartiflette]

Hi Eurotrash,

Thanks for all your advice so far. Firstly, with regards to the actual topic originally posted, I have cancelled my Cds appointment.

Secondly, with regards to your most recent post, I'm not so concerned about my own situation - I am now a sleeping partner in our UK business and the entirely separate activity I do within my micro-entreprise is my principal activity here in France, and I am hoping it will provide enough income to obtain a temporary Cds (if it doesn't then we're pretty much doomed).

It is my partners situation we need to sort, so that he is legally established in the French social security and tax system. Do you know if it is legal for him to set up a micro-entreprise himself and bill the UK company for the work he carries out here?

I feel like I have stepped into a minefield, and just trying to do the right thing (there must be a way!!!) so any advice you have on the above would be very welcome.

[Cathar Tours]

You need to look beyond Brexit as well because things may very well change especially as there may well be a no deal Brexit.

[Tartiflette]

Cathar Tours, of course!

My aim is to be able to live and work (albeit on a self-employed basis) in France permanently and legally. Whatever type of Brexit ie. deal or no deal will mean many of us will have to jump through more hoops in order to do this.

A no-deal Brexit is a very frightening but increasingly possible outcome which is why I'm simply trying to get things in order now and not in March!

[Cathar Tours]

That's why you should read the information on the official French government website hose link I gave before because it tells you how France will deal with issues if there is a deal or if there isn't and it includes tax.

Originally, from what I have read, the UK had dual tax agreements with many countries but a few year back the individual EU countries had all EU countries added to them and the agreement changed from a country by country to an EU wide dual tax agreement. This could effect what your doing.

You really need to read the link I gave and you really need to get professional advise, it may save you a lot of money, jail even, if you get it wrong.

[BritinBretagne]

The simple answer to your question about your husband working in France as an ME is, no, he can’t. As an ME you are not allowed to work for one main client. The French tax system would consider that the U.K. firm was failing to meet the obligations re social charges and employees rights. There are ways to legitimise his work but they will cost and are best discussed with a professional.

I’m still not sure why you need to set up as an ME to enter the French health system. If your dividend payment and husband’s income are sufficient you can apply through PUMA anyway. If you want to work, that’s different.

As a PS, I think that you were unwise to cancel your CdS appointment. The authorities are keen to help British residents to establish their residency and you would have had an opportunity to discover if your paperwork was sufficient or if not, exactly what you needed to fill the gaps.

[EuroTrash]

Hello Tartiflette

I'm glad you came back because the message I felt I was getting from other posters was that I had misinterpreted the situation and had "hung you out to dry" for no reason at all.

The correct solution for your OH is for the company to register him with URSSAF as a France-based employee, on a French employment contract, and pay French social security contributions to URSSAF. I think I gave the link before, but here it is again:

https://www.tfe.urssaf.fr/tfewebinfo/cms/lang/en/presentation.html is the platform the firm will use to register him as an employee (called the Foreign Firm Slip), and

https://www.urssaf.fr/portail/files/live/sites/urssaf/files/documents/5015-GuideCNFE-UK-2017.pdf is the booklet that explains it all in English.

It is a certain amount of faff but it is perfectly do-able and the portal is designed to take you through it; the cotisations will be higher than UK NICs and there will be more admin in producing the monthly payslip, but it will make him will fully legal, he'll have access to healthcare and other social security rights, and he won't have anything to fear from Brexit whatever happens because he'll be classed as a resident employed worker, which is the safest status of all. Whether his employer is inside or outside the EU, is irrelevant. The important thing is to get himself registered with URSSAF before 29 March in worst case scenario, or before the end of any transition period, because I imagine his legal residence in France will be counted as starting on the date his French employment contract started.

(As BinB said, setting up a micro entreprise and posing as self employed when you're not really, is not the right solution. That's called disguised employment in the UK and salariat déguisé in France, and technically it's fraud in most if not all countries. People do it to avoid paying their full social dues, because self employed cotisations are considerably lower than combined employer/employee cotisations for a salaried worker, but the penalties in France are particularly severe if it's picked up. Certainly not a good idea if you know your micro entreprise accounts are going to be inspected as part of the carte de séjour procedure.)

Regarding your micro entreprise, level of income at the outset is not in fact a criterion that is used to decide whether it is a "genuine and effective business". The authorities do understand that it can take a while to build a business up. What they are looking for is evidence that you have a sound business plan and you are putting in the time and effort to make it work. Clearly yours is a genuine activity so you should have nothing to worry about, after a few months you should be able to demonstrate that you have for instance set up a website (make sure you have all the obligatory mentions légales on it!) and put out publicity and are getting enquiries, and you are sending out devis, issuing invoices and generally building up a client base, or whatever.is appropriate to your activity. They should look at all these things, it's not only about money in the bank although obviously if you can show a good turnover, that will help too.

[EuroTrash]

@BinB, don't forget that not everyone can or wants to retire early and live in France as inactifs! The OP has indicated that they both intend to carry on working, so my advice is based on that. It's not all about accessing healthcare.

[EuroTrash]

@CT, in fact France and the UK have their own DTT so I don't think the tax situation will change.

https://www.gov.uk/government/publications/france-tax-treaties

I don't see income tax being problematic as long as hubby is correctly registered with URSSAF.

[EuroTrash]

Just to add, another solution of course would be to close the UK business and for your husband to re-start it in France. This would be the simplest and most obvious way forward and would give you the most options in terms of choosing the most advantageous French businesss structure etc, but I've been assuming that there are reasons why you don't want to do that.

[Tartiflette]

Eurotrash, thanks for taking the time to give me sensible advice, I do appreciate it. Yes, the reason for wanting to keep a UK company is that all of our clients are British, trust a UK company which is registered to Companies House and wish to pay in £ (although they may not once it is worth 10 cents lol).

I did look at the URSSAF system for foreign companies with no established branch here in France and this seems to me to be the best way to do things, ie set up OH as an employee in France, so we will initiate that process.

I have a further CdS RDV in February - I just felt completely unprepared for the one I cancelled, and by late Feb I will have submitted figures for my ME and will have invoices, entries to my bank account etc.

This is my first experience of forums of this type and while you and some others have been really super helpful, I have found that others have been very quick to judge and point the finger without really fully understanding the situation - I guess that's life! So you may not see me much on here again, but thanks again for all your sound advice.