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


Sunday Driver
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Although we don't seem to pay social charges (as you know Coops, we are on this mystery health care thing), we have declared all UK earned interest (not a lot), to be 'up front' and have opted to pay the charges for CMu, if they send a bill, so be it, if not, all well and good.

Our accountant went through everything, now we wait and see.....[8-)]

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[quote user="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.

[/quote]Yes, Noel, this has always been my understanding too (and we have indeed been charged/paid 0.5% since our arrival.  However, I read and re-read SD's post and the tax instruction in his link and still I don't know what is the correct thing to do - carry on as per or put our income in the TV box.  I am rubbish at this stuff in English - let alone French.  I really am a bit worried about this.  I could cough up the amount but it's a lot (it nearly doubles the contribution to CMU doesn't it?)  OK, I owe the health system a lot here but that is a lot to pay if it's wrong.  It does seem odd that I appear to be one of very few people whom this affects - maybe I'm just relatively rich?

Sunday, Parsnips - are you out there?  Which is correct?  Pretty please.

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As mentioned in my opening post, CSG/CRDS have always been chargeable on foreign pensions where people are 'a la charge d'un régime obligatoire d'assurance maladie' - ie, early retirees paying for their state health insurance through contributions for couverture maladie universelle or through employee contributions.  The only change is that up until now, only CRDS was collected by the tax office but from now on, they will be collecting CSG as well.  People who are registered under an S form and pay nothing towards their state health insurance and those with private health insurance remain exempt from CSG/CRDS altogether, so nothing changes for them.

For those who are 'a la charge' and therefore liable to CSG/CRDS, here is how it now works (figures based on a couple):

The charging rate which applies to your 2011 income (which you're declaring now) is based on your 2009 revenu fiscal de référence as it appears on your 2010 tax bill.

If the RFR was below 15,150€, you are exempt from CSG/CRDS (so you leave the tax form boxes blank).

If the RFR was over 15,150€, but your 2010 tax bill was under 61€, you pay 3.8% CSG and 0.5% CRDS (you complete box 8TX and box 8TL)

If the RFR was over 15,150€ and your 2010 tax bill was over 61€, you pay 6.6% CSG and 0.5% CRDS (you complete box 8TV and box 8TL)

Simple innit....[;-)]

 

 

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I am not going mad then.  Thanks.

Oh, and what is simple to you is a murky pond to the innumerate (is that a word?) amongst us!![:D]

EDIT : I must say that I'm quite surprised at the muted reaction to this on the forum - I can only imagine that everybody has been paying URSSAF as they should have been up until now, or they're all on very low incomes (imho, 15.2k isn't that much for a couple, pensioners or not.) 

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[:)]

Well, having satisfied myself (thanks so much SD for pointing this out 'cos I'd just have done as I do every year - although I'd have smelt a rat I guess once I noticed that my usual box was missing from the short form) that I had identified the correct procedure, I declared on line this afternoon.  Interestingly, the dreaded 6.6% doesn't come up in the calculations at the end but I guess the system has yet to catch up as it's there in the summary.

We shall see.  Just hoping it has to be paid with the social charges bill and not the tax one to give us a month or two more to catch up.

It will be interesting if this all gets absorbed into the income tax bill as it more than doubles mine.

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Wasn't that fun... NOT! I think we will be filling a large chunk of the deficit this year

If you want to, you can find the dreaded box (8TV) on the SECOND 'Divers' page - you tick the box at the bottom of the 'Divers' page (just below the box 8UU for foreign bank accounts). Then up pops the new page. Not so simple!

I had to go back and correct my return, having submitted it earlier in the afternoon, after I read the proper 2041GG notice (I had somehow downloaded an old version of 2041GG).

Just log in again to the impôts site and you can make changes and re-submit (as I just did).
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I did find the box and filled it in.  However, when the calculation of the tax bill came up at the end, there was no CSG amount in the payment estimate, in spite of the fact that our pensions total was shown as having been put in box 8TV. Did the total CSG amount due come up for you, Chessfou? Our CRDS one did but not that.

 On the short blue paper form I got in the post there's no 8TL either which would have alerted everybody else who's affected to the change, I guess.  Hence the quietness on this thread.  Luckily (huh!) I was granted the princely sum of 11k euros in compensation for my accident so I can pay this no problem this year but it will be a significant additional monthtly outgoing in the future - luckily just for a couple more years until Mr C gets his OAP.  Here's hoping we won't get done for back payments or I'll have to send him out on the streets. 

Discovering that we get 6.6% less a month than we thought has been a real blow, I can tell you, I haven't slept properly since I first saw this. I still am amazed it has raised such a muted response.

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No, the system didn't give me any figure for tax payable - probably didn't want to frighten me (by my reckoning, all the changes combined will, in our case, result in a tax bill of more than the total of my pension next year!). I forget the excuse - something along the lines of 'because of the particular nature of your return, we can't immediately do a tax calc).

The 'Resumé' does, though have a large number adjacent to a line that starts 8TV (immediately above that for 8TL).

Also, I remember that last year, when the system did tell me what the tax bill would be, it did not include anything for CSG - that only turned up later on the Avis for Prélèvements Sociaux (about a week after the Avis for Taxe d'Hab.and a couple of days before the Avis for the delightfully named "cotisation foncière des entreprises, taxe pour frais de chambres de commerce et d'industrie, taxe pour frais de chambres de métiers et de l'artisanat et imposition forfaitaire sur les entreprises de réseaux' which seems to cover most things!).

The combination of the 'extra' 6.6%, plus going into a higher tax band (thanks to the French health service, I am now working full time again), means that the next time I do a comparative of what it costs us to live here and what it would be in the UK, it may show a large enough difference to make us think ...

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I certainly couldn't live here on my own pension, Chessfou.  If the  o/h pops it, I'm off.  Not what I have ever wanted but there you go. I'd be sad to leave but as I have cancer I cannot now opt out and go private as they wouldn't take me.  Happily the o/h would be fine as he is nearly 65 anyway but if I were on my own I'd be stuffed in more ways than one.  Ah well, such is life.  It's nice while it lasts.
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[quote user="cooperlola"]Discovering that we get 6.6% less a month than we thought has been a real blow, I can tell you, I haven't slept properly since I first saw this. I still am amazed it has raised such a muted response.[/quote]

It gave me quite a shock too. Especially as we are skint after buying our house/home 2 months ago. Until I read the details SD had posted. Then all became clear; we have no liability this time. Whether or not you are liable for this additional tax depends on circumstances and income in the tax year taken into consideration. Fortunately, this time, we are not liable.

No consolation for you Coops, but a huge relief to me.

Sue

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[quote user="cooperlola"] Discovering that we get 6.6% less a month than we thought has been a real blow, I can tell you, I haven't slept properly since I first saw this. I still am amazed it has raised such a muted response.[/quote]

Maybe most people don't/won't pay because they've got S1s, or are working and paying anyway?

We're a bit odd in that I work, and my husband is classed as my dependent with CPAM. He gets a small (and I mean small!) occupational pension, which up to now we've not paid CSG on. I've dutifully filled in the 6.6% box so expect to get a bill this year. We can't really afford it, but I'm reasoning that strictly speaking we should have been paying this from the beginning, and at least from next year I can factor this cost into our budget.

Surely they can't apply it retrospectively and send us a back-dated bill, can they? This would scupper us.

Lou

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[quote user="Lou"]
Maybe most people don't/won't pay because they've got S1s, or are working and paying anyway?
Lou
[/quote]I think this must be it. When I was first on here there were a lot of "pre-retireds" about but I guess the healthcare scare and then the exchange rate have got rid of a lot of those.  Now that I know I'll put more money in the Livret A each month from now on but it's the surprise which got me.  It's going to make life hard but at least I can budget for 2013.  This one was a big shock and has eaten a goodly chunk of the meagre compensation I got.  I don't know where we'd have found the money otherwise.

I really hope they can't do this retrospectively too Lou, but after the problems Clair had this year with her AE, nothing would suprise me.  It would finish us too in that we'd need a loan to pay it and that was the last thing we wanted when we moved here.  We had hoped at least to be debt free from now on.

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[quote user="NormanH"]This is only a change in the way these charges are collected surely, not an extra charge?
Or have I missed something?

In addition it only affects the few under retirement age who have chosen not to work or run a business and pay their charges that way as Lou says.


[/quote]I don't think you have missed anything but Lou and I had!  It seems that we (the early retired) should have been paying 6.6% of our total income to URSSAF (or is it SAAF? - I forget!) since our arrival, as well as the 0.5% collected automatically each year by the tax man.  However, I, Lou, Anonia and maybe others who either haven't read this thread or just aren't much affected, have never been charged this amount as UR-doo-dah have never collected it nor asked for it, even though we have all (afaik) filled in all the correct bits of paper.

My suspicion is that as you've worked here you've always done this anyway and thus it's something you paid and were charged for automatically.  For me at least, I never realised I had to pay anything but the 0.5 on my pension and the other charges on unearned income (not that I have any of that  - ie savings interest etc - since that's all 0 on UK current accounts nowadays.)  Plus of course income tax and cotis to CMU.  I am aware that ignorance of the rules is no excuse but it's interesting that I've never noticed this subject before on this forum.  I'm happy to admit that it's my mistake but I am truly dreading the fact that now the tax man is collecting it that somebody will join the dots and demand this for the last seven years we've been here.  And that is money we just do not have.

But I'm sure Norman, that it will not affect you as you are more on top of these things than I who am a financial numbskull in any language.

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I don't think we have to admit anything, Cooperlola, if we've filled in all the forms required of us then it's not our fault.

When we first arrived we still had some savings which were earning interest (ah the good old days!) and with the then good exchange rate on top, we did get a bill for CSG and CRDS which included my husband's pension listed for CRDS but never in the column for calculating CSG (just the savings interest).

In addition I don't think this can just affect Brits, but all nationalities including any French who have pensions or unearned income from abroad. So there's some consolation (for me anyway) that it's not a "foreigner" or "British" thing.

So Norman is right, it's not a new charge, but in practice it will be for those of us affected.

The real bummer on a personal level is that it is kicking in just when things in general are costing more - though of course presumably that's partly why the authorities have decided that they ought to do something about collecting it properly.

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It was Sunday's original post that made me prick up my ears:

"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. " My italics.

As this was their error then I guess we can't be liable in retrospect but knowing the way the systems can work here one can never be 100% sure.

(EDIT :No, I haven't got something odd in my ear.  The word is pr  ick)

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Well, out of curiosity having just checked the last bill we received (in 2009, headed "Avis d'imposition prelevements sociaux"), Sunday's post isn't STRICTLY true, in that that bill does collect *some* CSG eg on savings interest, and comes (in all appearances at least) from the tax office.

Do you think URSSAF would have listened if you HAD contacted them and offered to pay??! Telling a bureaucratic French fonctionnaire that you think their system has got it wrong.....

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I have a sort of 'word of mouth' feeling that in any case the tax people don't go back more than 2 years.

Whether that applies to these charges I don't know.

I have always (as far as I know) correctly declared my French and UK income, but the charges were only taken on the French part, as that was taken by the employer.

Perhaps I too should have paid CSG on my  small UK Pension, but I genuinely believed that as it was paid by the UK Gov, and taxed at source over there it wasn't subject to CSG.

Your phrase made me smile cooperlola, as it reminds me of the title of a Joe Orton play, although I suspect he uses 'ears' as a euphemism..

Let's hope none of us get it any where uncomfortable..

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It's pretty clear, anyway, Norman, that people on small incomes aren't affected as one is exempt if one pays no income tax, afaics, and pays less if it is very low.  Thus people like Kenny who are on AME don't pay anyway.  Thus I can't imagine your UK pension would attract a lot of this by the sound of it.  But then, as I say, I am really cr*p at this.  No matter how many times I read financial documents I still don't understand them.  Figures do my head in.

Your comment about retrospective claims is reassuring, I must say.  However, as I mentioned, it was Clair's exprience with her gite earnings this year which made me nervous.  If she has trouble with these collection agencies, what hope have I?

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I'm grateful for SD's original post and for all the subsequent information given in this thread.  However, I still have a doubt about what to report in the dreaded Section VIII.

SD's advice included this:  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.

– but later this: If you have income which is subject to the charges, then you complete section VIII.

Later posts confirmed that foreign interest and dividends are subject to the social charges – I don't think this is in doubt.  So what if you are registered under an S1 but have UK interest income which is subject to the charges: do you report it in section VIII or do you ignore it?

The amounts specified on the form itself – if they are imposables à la CSG, etc – are traitements, salaires, pensions, and rentes viagères à titre gratuit.  These apparently would not include interest.  I have looked for help

in 2041GG; but the key phrase there seems to be "revenus de remplacement"

and I don't know what that means.

 
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Hi,

  As you read the note at VIII above the lines for entering the income , you have seen that it specifies " montants bruts des tratements, salairies, pensions, rentes viageres à titre gratuite (cadreI) à reporter sur la declaration des revenus"---no mention of any other income , therefore you don't enter any other income here. "revenus de remplacemen"t means pensions as opposed to salaries.

   Declaring interest etc. has not changed.

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Hi,

Coops and all, just to mention that although we are on AME and have a low income, on our tax form we have filled in the bit with our UK interest  for social charges and have opted to pay our part of the social debt - we reckon they will be around 38 euros for the social debt and around 238 euros for the USSAF thingy.

We will see what we get.

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