Help needed for IT Contractor in France?

[DBUD]

Hi everyone

I am looking to takeup a IT contract in the UK, but I am a resident in France.

What is the best way to setup a company, or can I declare my earnings at the end of the TAX year in France.

Many thanks

DB

[Nick Trollope]

[quote]Hi everyone I am looking to takeup a IT contract in the UK, but I am a resident in France. What is the best way to setup a company, or can I declare my earnings at the end of the TAX year in France....[/quote]

If you live in France and (I guess) you will do most of the work in France, then you will need to register as an "IT Contractor" in France. Go to your local Chambre de Commerce who will tell you how to register and subscribe to the French "system". If you are a single (as in sole trader) perso, then, unless you are likely to commit yourself to huge stock levels, you are probably best registered as an "enterprise individuelle", rather than as a Company.

You will pay quarterly social (health, unemployment & pension) payments and any income tax due after the end of the financial year (December).

Get an accountant!

 

[sue-J]

[quote]Hi everyone I am looking to takeup a IT contract in the UK, but I am a resident in France. What is the best way to setup a company, or can I declare my earnings at the end of the TAX year in France....[/quote]

You may fall foul of the relatively recent changes (late 90's) tax law in the UK where if you're contracting for one client the UK IR will decide you are liable for N.I. and PAYE at source as you're effectively an 'employee'. (IR35) Many larger companies now stop these payments at source, even if you're a Limited Company. If you're registered in France only, then you may have to register in the UK. If tax is not stopped at source you can arrange to have it paid through one of the 'umbrella' companies that do just that, most of which specialise in IT contractors.

But first talk to your clients HR people, even if it's only a short contract to clarify their preferences. However, I know of at least one contractor with a Swedish Company, who invoices his UK client (of five years standing) who pays no UK tax or NI, but of course pays tax in Sweden....

If you need an 'umbrella' company to take care of tax matters at source for you these people are well known in the IT contractor circles and I have used them in the past, very easy to use and relatively cheap.

http://www.contractorumbrella.com/

If you set up your own limited company you will have the added inconvenience of Companies House accounts etc, and you'll still have an involvement with the UK tax people and prefearably a book-keeper or accountant.....

As I see it you'll still need to declare to the French tax people, but if you've paid tax in the UK then you shouldn't pay twice. The National Insurance situation is a little less clear, UK voluntary contributions (Class 2) are quite cheap, but you may not need them if you 'live' in France.

Here's some IR35 news:

http://news.bbc.co.uk/1/hi/business/1723430.stm

sue ( ex IT contractor)

[Iceni]

If your money is earned in the UK then the UK taxman will want his slice of Tax & NI. In the good old days (up to a couple of years ago anyway) UKNI was largely avoidable but Prudence Brown may have woken up recently.

You should take professional advice that you will have to pay for.

John (accountant then IT contractor in a former life)

not

[Kevinmc]

DB

Check your private post box

[Nick Trollope]

All of the advice I have received (in France) and actions I (& 'er indoors) have done regarding Tax & NI in the UK and France are completely at odds with what Sue & John suggest, for a person living and working in France & earning in the UK.

I don't see what IR35 or UK NI has to do with a non-UK resident.

So I shall shut up & listen to my accountant.

[Will]

My experience is the same as Nick's. Though I have to say John is right when he refers to 'money earned in UK'.

Nick and I earn our money in France, so even though I (for one) work (not in IT) entirely for British clients on both a contract and a freelance basis and am paid in sterling, I pay taxes and cotisations in France, and have a SIRET number to prove it.

We have been into this in some depth. Mrs Conq used to train tax inspectors in Britain, so she knows a little about the subject. We have consulted senior people in the Inland Revenue, plus French tax officials and accountants, and although several on both sides of the Channel have thought there may be different ways of doing it, we always end up with the same conclusion.

I will take a lot of convincing about the existence of any other legal and feasible solution, after the period of grace offered by E forms (which I have used) though I would love to hear of one.

In answer to the original question, I would advise going to a French accountant who will help you register. Or, if your situation is simple (e.g. only one or two clients) you can register yourself with your local URSSAF office, as your line of business may well come outside the scope of the Chambre de Commerce or Chambre de Metiers. You will need a French accountant for your tax return next year unless your earnings are under the 'Micro BNC' limit, which I believe was about 27,000€ for 2004, in which case you just fill in the appropriate boxes on the tax form and you will automatically receive an allowance for expenses etc. You will probably find your local French tax office quite helpful.

[Miki]

"....So I shall shut up & listen to my accountant"

Is the accountant French ? (well yes I reckon that she/he is.) I ask really with tongue in cheek because at one seminar a few years back now, among the persons present, were two advisors that were French and 3 that were from English companies "specialing" in French law and admin etc.

I and a couple of friends, asked a few questions (free lunch, few beers and a bottle of wine, they don't do it like they used to, any more !!) and when we met up at the end of the day for dinner, we surprisingly had 5 differing answers, I say "surprisingly" with same tongue, still firmly in the same cheek

[Will]

I would add something to Miki's observation.

When I registered in France, we did it ourselves at URSSAF as I indicated above. The work required was basically filling in a single sheet A4 form. I had previously consulted a London-based 'specialist in Anglo-French business and law' who had quoted about 1000€ to carry out a study as to whether travailleur independant status or a SARL would be most beneficial (clearly the former in my case) and then to obtain a registration number (SARL would be charged extra at cost) - to that fee had to be added 16% 'disbursements' and then VAT on top of the whole lot.

I'm not saying don't take professional advice, I would strongly recommend anybody to consult an appropriate adviser. Just be careful, that's all. 

[Nick Trollope]

[quote]"....So I shall shut up & listen to my accountant"Is the accountant French ? (well yes I reckon that she/he is.) I ask really with tongue in cheek because at one seminar a few years back now, among th...[/quote]

Yes he is - selected because he speaks English!

I must say that he did have awful problems answering these questions and wrote at length to URSSAF (no replies, of course) and the whole thing took 12 months to sort, by which time I had sold up (in the UK) and Tina had been made redundant.

Wot a waste...

 

[Iceni]

"I don't see what IR35 or UK NI has to do with a non-UK resident."

The terms "resident" and "ordinarily resident" have a special meaning to the UK taxman - and they are not necessarily related to where you hang yr hat.

www.inlandrevenue.gov.uk contains a wealth of information free to download - but to paraphrase the old saying about lawyers - "a layman who attempts to handle his own complicated  tax affairs ................" hence the final comment in my first post.

John

not