Changes to the collection of social charges on foreign earned income and pensions

[Sunday Driver]

Having just received my tax forms, I see that the method of collecting social charges on foreign earned income and pensions has changed.

Up until now, CRDS was collected by the tax office through income tax declarations, leaving CSG to be collected by URSSAF. However, there was no referral mechanism in place for the tax office to notify URSSAF that CSG was due (and no-one ever voluntarily contacted URSSAF and offered to pay their CSG) so this long standing loophole remained - until now.

So, if you are liable to social charges on your foreign earned income or pensions (ie, you are registered for state health insurance either through CMU or through employment contributions) then both of these charges will now be collected by the tax office.

Form 2047 has been modified - under section VIII, you enter the income subject to CSG and CRDS in the relevant boxes and transfer the sums onto a 2042C déclaration complémentaire (under section 8 - Divers).

If you are exempt from these social charges because you are registered for healthcare under a form S1 or you have private insurance, then none of this affects you and you continue to ignore section VIII.

There are exemptions/reductions which are income dependent and you can find full details in this updated tax office note:

2041 GG   REVENUS DE SOURCE ÉTRANGÈRE ET REVENUS PROVENANT DES COLLECTIVITÉS D’OUTRE-MER

 

 

[NormanH]

That adds another complication to the question of whether or not  to declare Local Government pensions under the new system, given that the UK is not on the list (p3 of the notice) of countries applying the convention.

parsnips and I were discussing that on another thread.

On this particular question, is there still nowhere to declare if you have an S1?

That phrase 'ignore section V111' seems a bit vague...

[Sunday Driver]

[quote user="NormanH"]
On this particular question, is there still nowhere to declare if you have an S1?
That phrase 'ignore section V111' seems a bit vague...
[/quote]

If you have income which is subject to the charges, then you complete section VIII.  If you don't, then you don't. There is nowhere to 'declare' that you have an S1 because the tax forms don't require it. 

However, we all know from experience that a brief mention can avoid some tax office data input clerk thinking you've missed something off the form and helpfully filling it in for you.  You can either attach a written note to your declaration or scribble it on section VIII or, if you're filing on line, put a comment in the additional information box on the 2042. 

 

 

[woolybanana]

Sunday, I have PM'd you.

[lyndros]

I don't quite understand why you say that those with a Form S1 can ignore Section VIII, as the title to that Section includes the word "Imposables".

Because this word "Imposables" is used, does this not mean that this Section is therefore wanting details of foreign income NOT taxable to CSG and CRDS (i.e. where there is a Form S1). However, my understanding of the French language or the french way of thinking is not very good.

Please could you clarify.

Regards

Lyndros

[Sunday Driver]

It simply means foreign income upon which CSG and CRDS is imposed, ie payable. 

To reiterate, if your foreign income is liable to the charges, then you fill it in.  If your foreign income is not subject to those charges then you don't fill it in.  In other words, you ignore it.

How difficult can this get......[8-)]

 

 

[lyndros]

Am I correct in thinking that interest on UK Bank Accounts and UK

Dividends are subject to these charges, irrespective of whether there is

a Form S1?

[Sunday Driver]

Yes.

 

 

[cooperlola]

Thanks for the heads-up, Sunday.  Do we need to change the FAQs?

I'm sure I should know, but what's the amount involved - ie the percentage due?  I'm afraid I'm all at sixes and sevens at the mo' as the builders are in and most of my papers locked away or hard to get at.  Plus I'm sitting in a corner in my wheelchair with the laptop trying to slide off...[:-))] (Already posted by mistake before I'd finished typing.)

[woolybanana]

Nah, you have just got up, I reckon!!

[Sunday Driver]

[quote user="cooperlola"]

Thanks for the heads-up, Sunday.  Do we need to change the FAQs?

I'm sure I should know, but what's the amount involved - ie the percentage due?  I'm afraid I'm all at sixes and sevens at the mo' as the builders are in and most of my papers locked away or hard to get at.  Plus I'm sitting in a corner in my wheelchair with the laptop trying to slide off...[:-))] (Already posted by mistake before I'd finished typing.)

[/quote]

Full details of the rates and RFR based reductions/exemptions in Note 2041GG in my earlier link.

....and yes, we'll need to change the FAQs [:(]

 

 

[cooperlola]

Before I do this then, can I run this by you please?

Our pensions are from the UK, we are in CMU and we paid more than 61 euros last year, I put the full amount of our pensions in box 8TV in Section V111 on the pink form then transfer it to the blue.  We will pay 6.6% of our pension amount in CSG.  Right or wrong?

Also, I'm assuming that they'll want this all in one hit in Jan 2013 along with the CRDS payment.  Right?

[5-element]

But Coops, surely, if your pension is from the UK ONLY, then you have an S1, and therefore you still WON'T have to pay Social contributions.

I thought it is only for people like myself, pension from the UK, BUT I also have a tiny pension from having worked in France early on in my life, and that meant that I lost my S1 (no choice there) and therefore became à la charge of French Sécu. The fact that you get medically treated here in France, doesn't mean you are "a la charge" of the French healthcare, since it is the UK who pays for you - because of your S1. The change for me this year is that I will have to pay CSG etc... on ALL my income, instead of only on my French income as it was last year.

 

There is no change for my husband, who will continue to have his own S1. So in effect, as far as social contributions go, we will have to be taxed separately. I don't know how "they" will work that one out, given that we have a joint return.

 

Please someone tell me I am right, it took me ages for the change to percolate????

[cooperlola]

I am not on an S1.  I am one of those evil people[;-)] who won from our campaign and who pays 8% of their income in cotis to CMU-B.  It will be another couple of years before Mr C is old enough to get paid for by the UK.

Does 6.6 sound right to you, N?

[5-element]

Of course, you are too young, Coops, I forgot!!! Sorry, my neurones were busy doing somersaults, I have absolutely no confidence in my ability to really "get it"...[kiss]

[cooperlola]

[quote user="5-element"]

 

There is no change for my husband, who will continue to have his own S1. So in effect, as far as social contributions go, we will have to be taxed separately. I don't know how "they" will work that one out, given that we have a joint return.

 

Please someone tell me I am right, it took me ages for the change to percolate????

[/quote]I think that if you put just your income in VIII/8T,Q,V,Wor X - depending upon which is correct for you - then the social charges should be correct.

[5-element]

Thanks Coops, I'd done that (following SD's advice and having studiously and carefully read all the official blurb on the subject - it's just your post that threw me, as I hadn't remembered you not having an S1/exE121 - so I thought "could I have it ALL wrong?". Mostly reassured now, it's so easy to get anxious and paranoid[:)] about filling a tax return correctly.

[5-element]

Thanks Coops, I'd done that (following SD's advice and having studiously and carefully read all the official blurb on the subject - it's just your post that threw me, as I hadn't remembered you not having an S1/exE121 - so I thought "could I have it ALL wrong?". Mostly reassured now, it's so easy to get anxious and paranoid[:)] about filling a tax return correctly.

[NormanH]

I have sent you a pm 5e

[cooperlola]

[quote user="cooperlola"]

Before I do this then, can I run this by you please?

Our pensions are from the UK, we are in CMU and we paid more than 61 euros last year, I put the full amount of our pensions in box 8TV in Section V111 on the pink form then transfer it to the (extended version of the) blue.  We will pay 6.6% of our pension amount in CSG.  Right or wrong?

Also, I'm assuming that they'll want this all in one hit in Jan 2013 along with the CRDS payment.  Right?

[/quote]Sorry to repeat this but before I file my return I just wondered if anybody (Sunday?) could confirm that I'm correct?

[cooperlola]

Am I the  only person on the forum to whom this new procedure applies?  I have to go ahead as the deadline is nearly here but I'd love to know if anybody reckons I'm right or wrong as 6%-odd of our income is a chunk of money to find in one hit so I need to start saving if I've got this right.  I'm pretty sure but a second opinion would be good.

Anybody?

[Antonia]

FWIW Cooperlola I'm in the same position as you and read it the same way. I filled in the forms as you described and handed them in a couple of weeks ago. I'm expecting the 6.6% to be added to my cotisation bill.

[cooperlola]

[quote user="Antonia"]FWIW Cooperlola I'm in the same position as you and read it the same way. [/quote]Great, thanks.  Just one person on the same wavelength makes me feel a little less daft!  Thanks for that.[:)]  I guess I've been getting away with this for years so it's a fair cop, as it were.

[gpnoel]

For Cooperlola and Antonia: sorry I have only just picked up on these posts and did not reply sooner.

I am far from being an expert, but my understanding is that early retirement occupational pensions (received before UK State pension age is reached) are only subject to the 0.5% Contribution Social Generalisée on the gross figure received; certainly this is what I have been charged for the last five years - (and I suspect is what you also have paid from your comments, Cooperlola).

My recollection is that this reduced level of CSG for such pensions was the result of a case taken to the European Court - with which Sunday Driver (and perhaps Parsnips) was/were involved.  However, I cannot support my recollection with any documentation, because when my previous hard disk "died", I lost lots of references/articles which I had bookmarked and can no longer quote "chapter and verse".  However, I am sure Sunday Driver/Parsnips could confirm.

If I am correct, only CRDS box 8TL would need to be completed with the gross pension figure - along with any other relevant figures of income such as UK interest, rent viagères etc - and no entry would be required, in respect of the gross pension, in any of the four CSG boxes.  The situation changes, of course, when one or other of you/spouse reaches UK State pension age and obtains a form S1 (former E121), whereupon you cease to have any liability to CSG on pension income - as no longer "à la charge" of the social security system, courtesy of the S1 - and you become no longer liable to make CMU contributions.

The whole thrust of boxes 8TQ/8TV/8TW/8TX confuses me, as they do not appear very relevant rates of CSG for UK immigrants/ex-pats; there is no mention of the 8.2% standard rate of CSG, which is levied on UK interest, rent viageres etc; there is also no provision on form 2047K for the third Social Charge viz the 4.8% Prélèvement Social et Contributions Additionnelles - which is levied on UK interest, rent viagères etc! 

Leaving taxpayers to determine themselves which rate of CSG is appropriate for particular sources/levels of income seems wholly inappropriate to me and is just asking for mistakes.

In my own case, I have merely provided ALL the figures to the tax office, but asked what level of Social Charges should apply - and from what year - as it appears, from explanatory note 2041GG, that I may be exonerated completely from CSG on pension income, because of the level of our overall Revenue Fiscal de Reference (for the last couple of years).

(Here was I fairly comfortable with my knowledge of tax return process - until this year)!

[JohnFB]

Antonia / Cooperlola

It does not affect me this year but will next so I have been looking at it. My expectation as a CMU-B payer is that on making my declaration next year I will be assessed to Soc Sec charges at 6.6% on pension income payable with the investment CSG bill, and will in the subsequent declaration be able to offset against taxable income 4.2% of pensions aswell as 5.8% of prior years investment income.

However that could all change if El Pres rolls up CSG into income tax as promised. What that will mean for S1 holders heaven only knows, but almost certainly a bigger bill as it never goes down.

Hope that helps

JFB