UK ("Low") tax v. France ("High") tax

[chessfou2]

Working on my tax return (to be filled on-line, so I still have a few days to the deadline), I was interested to compare our predicted tax payment for next year with what we are shelling out this year. Then I thought, why not do a comparison with what it would be if we were still in the UK. The result (for this year), including all French taxes (impôts, habitation, redevance audiovisuelle, assainissement, professionnelle, etc) v. UK (Income tax & Council Tax), astonished me:

France = 1

UK = 2.9

I am slightly amazed by, and distinctly smug about the result.

[cooperlola]

[quote user="chessfou2"]Working on my tax return (to be filled on-line, so I still have a few days to the deadline), I was interested to compare our predicted tax payment for next year with what we are shelling out this year. Then I thought, why not do a comparison with what it would be if we were still in the UK. The result (for this year), including all French taxes (impôts, habitation, redevance audiovisuelle, assainissement, professionnelle, etc) v. UK (Income tax & Council Tax), astonished me: France = 1 UK = 2.9 I am slightly amazed by, and distinctly smug about the result.[/quote]I had always had the impression that the UK income tax levels were higher, as are property taxes if you go UK South East to Rural France, but that it's the TVA and the Cotis which push the balance back the other way and to my mind, probably leave them pretty even in the end.

[chessfou2]

Obviously, all circumstances will be different, but I was not expecting such a huge gulf.

Yes, Cotis can make a big difference, although not for those who are retired (or semi-retired/semi-working) but surely TVA is no big deal (19.6% v 17.5%).

If I apply the TVA difference to all our expenditure (and include the rather small Cotis that I now pay - health issues having reduced my activity), then the ratio is still about:

France = 1

UK = 2.1

[parsnips]

[quote user="chessfou2"]Working on my tax return (to be filled on-line, so I still have a few days to the deadline), I was interested to compare our predicted tax payment for next year with what we are shelling out this year. Then I thought, why not do a comparison with what it would be if we were still in the UK. The result (for this year), including all French taxes (impôts, habitation, redevance audiovisuelle, assainissement, professionnelle, etc) v. UK (Income tax & Council Tax), astonished me:

France = 1

UK = 2.9

I am slightly amazed by, and distinctly smug about the result.[/quote]

Hi,

      The most favourable position is that of UK state pensioners  with other income such as occupational pensions , and especially rent from a UK property.

Not only do we get the UK paying for our health cover (about 3 600€ pa. per person), but , unlike french pensioners , pay no social charges on any of our pensions. Because french governments like ,for political reasons ,to keep as many citizens as possible out of income tax , they give generous allowances and rates, while loading the social contributions, of workers and pensioners alike.

 For the icing on the cake , if , like many, a couple has a house in the UK which they let out, and no other UK taxable income, they will almost certainly , through their UK personal allowances, pay no tax on the rent in the UK, and the DTT excludes them from french tax on those rents, --so in effect, they are tax-free!

 It is a pity so many swallowed G.Brown's lies about the UK being a "low-tax" economy , and may have been discouraged from moving here. I know of many who have made great efforts to stay out of the french tax system ,and when finally"caught", have been amazed how much better off they were in the system.    

[cooperlola]

I think that far fewer items are exempt here than in the UK though.  Not that I'm arguing with you, Chessfou, simply that I think it's not quite as far in France's favour as one immediately thinks.  Our CMU contributions, for instance, cost about 50% - 60% again on top of the tax bill and of course they don't get you all your healthcare back - you need top up.  Those who are working pay far more too as they pay into pension/social security funds too.  Most of the people I know here work and they reckon they "lose" nearly half of their earnings to the state.

[velcorin]

This is an easy one for me, as I take my UK company salary with me within whichever country I work. Take home pay in France is 55% of what I get in the UK, 65% of Spain, and 70% of Germany.

Looks like the humble worker ants are paying for your party!! Enjoy!!

[cooperlola]

I have two close friends who are French and live in my former home village in the South East of England.  Both are there because they reckon they do better tax wise than here, especially as they run small businesses which are less cumbersome admin' wise to boot.

[NormanH]

[quote user="parsnips"][quote user="chessfou2"]Working on my tax return (to be filled on-line, so I still have a few days to the deadline), I was interested to compare our predicted tax payment for next year with what we are shelling out this year. Then I thought, why not do a comparison with what it would be if we were still in the UK. The result (for this year), including all French taxes (impôts, habitation, redevance audiovisuelle, assainissement, professionnelle, etc) v. UK (Income tax & Council Tax), astonished me:

France = 1

UK = 2.9

I am slightly amazed by, and distinctly smug about the result.[/quote]

Hi,

      The most favourable position is that of UK state pensioners  with other income such as occupational pensions , and especially rent from a UK property.

Not only do we get the UK paying for our health cover (about 3 600€ pa. per person), but , unlike french pensioners , pay no social charges on any of our pensions. Because french governments like ,for political reasons ,to keep as many citizens as possible out of income tax , they give generous allowances and rates, while loading the social contributions, of workers and pensioners alike.

 For the icing on the cake , if , like many, a couple has a house in the UK which they let out, and no other UK taxable income, they will almost certainly , through their UK personal allowances, pay no tax on the rent in the UK, and the DTT excludes them from french tax on those rents, --so in effect, they are tax-free!

 It is a pity so many swallowed G.Brown's lies about the UK being a "low-tax" economy , and may have been discouraged from moving here. I know of many who have made great efforts to stay out of the french tax system ,and when finally"caught", have been amazed how much better off they were in the system.    

[/quote]

On the other those with Local Government pensions who have contributed to the French system by working or running a business here are penalised in 2 ways:

1) Their pension is taxed in the UK

2) Their Health care is not paid for by the UK, but by the French state, so they are subject to the same social charges as French pensioners.

I wonder how many people realise that by working and  paying cotisations here they are effectively saying goodbye to the E forms

[milkeybar kid]

Interesting you mentioned this Norman H, I wondered about this some time ago as regards the working in France bit & losing the right to an E form and mentioned it to a couple who had just registered for auto entrepreneur status who were also approaching retirement. Their assessment of the situation was that simply they would apply for the E forms when the time came without stating they had worked. My slant on it was that the France side of it might not accept the E forms. Not being the sharpest knife in the box I thought I had it wrong.

[mint]

Question for Parsnips:

On UK rental, won't you have to pay French Contributions Sociales of 12.1% although in all likelihood you will not have to pay UK tax?

[parsnips]

[quote user="sweet 17"]

Question for Parsnips:

On UK rental, won't you have to pay French Contributions Sociales of 12.1% although in all likelihood you will not have to pay UK tax?

[/quote]

Hi,

    No. Under the DTT french "social charges" (CGT,CRDS,and PS) are treated as what they are--taxes, and UK rents are taxable ONLY in the UK.  The only way they are involved in french tax matters is in the calculation of the "taux effectif" --the notional rate which is applied to french taxable income.

[NormanH]

[quote user="milkeybar kid"]Interesting you mentioned this Norman H, I wondered about this some time ago as regards the working in France bit & losing the right to an E form and mentioned it to a couple who had just registered for auto entrepreneur status who were also approaching retirement. Their assessment of the situation was that simply they would apply for the E forms when the time came without stating they had worked. My slant on it was that the France side of it might not accept the E forms. Not being the sharpest knife in the box I thought I had it wrong.[/quote]

The point is that the contributions you pay entitle you to a French pension, and however small that might be it gives you Health Cover.

However  the UK say that cover by the E form isn't given to people who have a pension from another country.

[chessfou2]

Ah yes, Cooperlola, I should have made allowance for our mutuelle payments as well, which changes our figures to:

France = 1

UK = 1.5

Had I read Parsnips' post 11 years ago, we would have arranged things rather differently and our ratio would be truly spectacular! But I'm certainly not complaining; as far as I can see we are paying substantially less in total costs here than we would in Spain, Netherlands, Germany, Italy, Malta, Cyprus, Greece, USA, Romania, Bulgaria, Ukraine ... (to name only those I have tried to find comparisons for).

[oldgit72]

I have been wondering with the forthcoming cuts in the UK, what they (the UK) will cut for UK nationals living abroad. For example, are they able to stop the E forms and payment of state pensions to UK nationals living abroad? Are there any EU treaties that could prevent them doing this? If not, i'm sure they would be tempted.

[parsnips]

[quote user="oldgit72"]I have been wondering with the forthcoming cuts in the UK, what they (the UK) will cut for UK nationals living abroad. For example, are they able to stop the E forms and payment of state pensions to UK nationals living abroad? Are there any EU treaties that could prevent them doing this? If not, i'm sure they would be tempted.[/quote]

Hi,

      Barring seismic upheavals in europe (always possible) , they can't change the things you mention. The only reason the UK has honoured these arrangements up to now is that they are bound by treaties. That is why British governments of all parties have consistantly refused to update UK pensions for residents in certain commonwealth countries --because there are NO TREATIES which compel them to do so--so they don't.  

[EmilyA]

It would be interesting to know what does actually happen re French pensions and the E121. I became eligible for my state pension last year. We run a micro-entreprise so I filled in the form from RSI and they sent it off to Newcastle. Newcastle then said that because the vast majority of my contributions were in the UK that they would be my state pension authority and they pay my pension in sterling into our UK bank account. I have chosen not to retire from our micro-entreprise for the moment so I stll pay cotisations for my health cover, but I wonder what will happen when I retire from our business. Does anyone actually know from experience whether RSI pay or if they get the E121 to claim back from the UK?

[cooperlola]

My understanding has always been that if you work or have worked in France, then your healthcare is their responsibility and you pay as a French person does, just as Norman says.  If you've paid your 30 years of stamps then you should get your pension but I don't think you can get an E121 for your healthcare (although it would be financially advantageous for the French authorities to accept one if you get one, I would have thought given the per capita payment they get) if that is dealt with through your work and/or business.  But I don't know this for a certainty - it may well be another of these lotteries that depends upon the attitude of your caisse.

[NormanH]

[quote user="EmilyA"]It would be interesting to know what does actually happen re French pensions and the E121. I became eligible for my state pension last year. We run a micro-entreprise so I filled in the form from RSI and they sent it off to Newcastle. Newcastle then said that because the vast majority of my contributions were in the UK that they would be my state pension authority and they pay my pension in sterling into our UK bank account. I have chosen not to retire from our micro-entreprise for the moment so I stll pay cotisations for my health cover, but I wonder what will happen when I retire from our business. Does anyone actually know from experience whether RSI pay or if they get the E121 to claim back from the UK?[/quote]

My assertion is based on this

"the UK might not give you healthcare cover if:

• you get a pension from the country where you live or go to live;
  and
• you can get healthcare cover under that country’s rules."

source

http://www.dwp.gov.uk/international/medical-services/healthcare-arrangements-for-people/getting-long-term-incapacity-benefit/

Obviously the UK prefers not to cover people if it can avoid it.

[dragonrouge]

Certainly not a benefit if one like my wife has suffered from Rheumatoid Arthritis for over 34 years and is both in the UK and here registered as a disabled person.

Thus we are given 2.5 parts as against 2 parts. As indicated earlier in this piece we both receive occupation pensions our State Pensions and have rental income from investments in the UK

Even with TVA and Groupama I am amazed at the difference in tax levels. In our minds there is no argument we are better off here from both direct and indirect tax. TVA as with VAT is at the point of sale so one can decide.

[EmilyA]

Thanks Coops and Norman. I had always thought that I would be covered by the French caisse and RSI said "when you retire you will be with us for ever..." (Lucky me!) I had also thought, though, that my UK state pension would be paid through RSI and was surprised when it came directly from Newcastle. I just wondered if anyone had any actual experience of what happens about the E121.

To refer to an earlier post, I can't begin to imagine how people could contemplate not telling the UK authorities about employment in France. The UK state pension application form says "Have you ever worked in France?" and "Have you got a French Social Security number?" so I think anyone giving false information would be very foolish indeed.