Social Contributions

[AnOther]

[quote user="Will"]Quite so, and small curly dogs with short legs don't tip over very easily either [:)][/quote]I trust that's a reference to your pooch and not me....[:'(]

I'm not THAT well paid, I wish...........would be a "nice" problem to have [;-)]

[cooperlola]

Good to know the two of you are stable!

Will - I re-iterate your point about being careful of the "official" outcome of tax returns etc.  Having had mine done by an accountant last year - perfectly correctly - my tax office decided suddenly that we owed nothing here.  If I had not pestered everybody, we would have paid no income tax anywhere - either here or in the UK.  Sounds good in theory but I for one would not have wanted to face the consequences when the error was discovered.  They are all just human, after all, and make mistakes....

[allanb]

[quote user="Will"]As a general rule, when you have paid tax in Britain, you will not have to pay tax again in France. The exception is that if adding the British income would put you into a higher tax band in France - for instance if your household already has income originating from France - then you are assesssed in France on your total income, and tax paid in Britain is credited. [/quote]

Well...

To be exact, tax is calculated on your world-wide income (revenu mondial) as though it were all taxable in France, and then the effective average tax rate given by that calculation is applied to the income that is really taxable in France (revenu imposable).

Tax paid in Britain is then credited, if that's what the treaty says.  Otherwise, you may have to apply to HMRC for a refund.

I suppose this kind of statement must be made subject to caution: people's circumstances vary.  But it's worked for me, exactly to a euro, for the three annual returns I've filed so far.

As for social security and other contributions, I don't know enough to comment.

[AnOther]

Update to my earlier post:

'er indoors is back from the CPAM and all in all a bit of a non event.

No queue, she filled in a short form, they copied all the papers and told her to expect a letter within 10 days, in and out in 10 minutes.

The only question they asked was if she was applying for just herself or both of us.

I'll keep you posted !

[cooperlola]

The latest news - and whether you believe this or not is up to you - is not good

http://www.connexionfrance.com/expatriate-news-article.php?art=35

[AnOther]

It looks pretty conclusive to me Coops, and backed up by logic I would say.

There is a contradiction though is there not because, as previously mentioned, until recently it was illegal to have private health cover and one was obliged to afilliate to the CMU. Maybe the small print in that law excluded non French nationals, I couldn't say.

Whatever, for some this will be catastrophic, if not potentially life threatening news [:(]  

[cooperlola]

I imagine, Ernie, that this is precisely the kind of "clarification" which is being hammered out.  Not to mention the one or two posters on here who have, within the last few days, been assured that they will be able to remain in the CMU, in spite of apparently not fulfilling the conditions as they seem now to be being interpreted.

As you say, there will be some tough decisions to be made, for some.

I am currently looking at French "Mutuelles" to find out what/if any full medical cover policies they would be likely to offer.  Now is the time for everybody to start doing their homework and shopping around.  By the end of the month, many of us will have some sizeable bills to face.

[cooperlola]

A short update.  I have just spoken to my insurance agent (English speaking, French company).

He tells me that until the last couple of days, certain CPAMs were indeed re-issuing Cartes Vitales to the early-retired and others.  However, the speculation in the press and elsewhere, plus the number of phone calls being received on this subject on their English speaking helpline, has caused the central authorities to clarify this position to the local agencies.  The result of this has been that more and more CPAMs, who are currently making their annual reviews, and residency checks, on immigrants and others, are now toeing the government line and revoking CMU rights.

There is a meeting currently going on at a high level and a statement is expected tonight, or tomorrow, on their findings. This should clarify the position which Ernie mentions above, whereby at present the apparent anomoly of being legally bound to contribute to a system which may not be of any benefit, will be resolved.

His advice is that everybody waits until their CPAMs act before phoning them.  The more your head remains under the parapet, the less likely you are to be shot at.  It could be (and there are one or two cases so far, but this may change) that your Cartes Vitales will already have slipped through and you may get one or two more years' cover while your CPAM figures out what it's supposed to be doing!

He is currently in negotiation with a number of healthcare providers, in order to attempt to formulate new policies for the early-retired in France who may be affected, and should have more details next week, which I will post when I know them.  They are aware of the potential huge problems for the chronic long-term sick and those with existing conditions and are considering ways of formulating new policies to help them.

I am going to talk to him again early next week and he will keep me up to date.

[AnOther]

[quote user="cooperlola"]

He is currently in negotiation with a number of healthcare providers, in order to attempt to formulate new policies for the early-retired in France who may be affected..... They are aware of the potential huge problems for the chronic long-term sick and those with existing conditions and are considering ways of formulating new policies to help them.

[/quote]Now why doesn't this give me a warm and cuddly feeling I wonder. Insurers are not philanthropic societies but hard nosed businesses and cannot see how any would write a policy, in the knowledge of specific pre-existing conditions, and not have to charge a commensurate premium. The whole premis of any insurance is to cover you for things which MIGHT happen, not those which already have.

Don't forget too that the age group which we are talking about here will, to a very large extent, either already be suffering problems or expected to be in the short to medium term and you won't have a base of the young fit and healthy in the schemes to subsidise them.

Let's hope somebody surprises me though [blink]

[cooperlola]

Yup.  Without a doubt they'll have to cover their costs and make a fat profit to boot!  It ain't going to be cheap or easy.

[Mark_France]

Hi there,

Sorry to bother you but I would be interested in hearing about the ups and downs of how you figured a way around the problems of UK work and a French home.

I work as an employee for a UK company (but never work in France) and France is my tax residence.  I presently pay N.I.C and Tax on this salary.  What I would prefer though is to be in the French system, assumming that the cost is not exorbative for either me or my employer.  The logic being is I live in France and wish to contribute to the society where I live and hopefully that society will look after me during hard times - based on my contributions.

I'm open to all sorts of ideas.  I have no confidence in accountants and their various different answers to a similar question.

Thanks,

Mark

[Iceni]

The simple rule is that you are first liable for tax etc where your bum is parked while you work. If you want to pay tax etc in France there is a simple answer, work over here.

But I was an accountant so you cannot have any faith in what I say however correct it may or may not be.

John

not

 

[cooperlola]

I have seen a quoted figure of around 50% of income for "cotisations" here, so you may well be better off being taxed in the UK.[Www]

[samdebretagne]

[quote user="cooperlola"]I have seen a quoted figure of around 50% of income for "cotisations" here, so you may well be better off being taxed in the UK.[Www][/quote]

Except in a few special cases, I don't really think you have the choice - if you are considered a tax resident in France, you are supposed to "cotise" here as well, no matter where your income is earned.  That'd be too easy if people could just work out of the UK and pay lower taxes but still take advantage of everything France has to offer without ever having to pay in.

[cooperlola]

Sam de B this isn't something I know enough about, but does that actually apply if the work is all carried out in the UK?  I've heard conflicting reports on this so am interested in the answer.  I know that you cannot work here (by internet,phone etc) for a UK company, but is it still true if your work is in the UK and you go there to carry it out?  Or is it dependent upon how long you spend in each country?

[samdebretagne]

I'm no expert here, but from what I understand, you cotise in the country where you are considered a tax resident.  So if you live in France most of the time but work in the UK, you would be required to register your own business here in France.  I know a few people who live in France but run UK-based businesses and just declare everything over there to avoid paying French taxes, and they have been told this is illegal by their French accountant.  They still keep doing it, but I guess that's their perogative - I definitely don't agree with that line of thinking.  Which I think is also part of the reason the gov requires all French residents to declare their worldwide income on their French tax return.

[cooperlola]

Once again, sadly SamdeB, this is one of those instances where immigrants seem, then, to continue to cheat the French out of their taxes.  I've always felt that you should pay to support the place whose services you use, but I really was under the (probably misguided) impression, that this was in fact a legitimate way to do it.  But as it doesn't apply to me (I just pay all I'm asked to pay over here, not in the UK) I have never studied this aspect very seriously. No wonder they're coming after us, and sweeping the innocent and honest up in the process.[:(]

[londoneye]

Now I am confused.   I am not currently working but am seriously looking (as mentioned along the way in this post) at doing some work in the Uk on a contract basis.   It transpires that instead of doing this because I want to, and it would be nice to earn a little money, I may have to, in order to cover mine/OH's new health insurance costs.

I had understood that if I worked in Uk, as self-employed then I was not doing anything wrong or cheating anybody out of anything, by paying my way via the UK system.     Have I misunderstood, or is this not the case?

Why would I have to pay into the French system also.    Essentially all I want to do is to earn some money in a place where I am able to (hopefully) and minimise my tax (and I regard all payments made to the government as a tax of some sort) in a legal manner - ie I am not looking to tax evade. 

[cooperlola]

This is what confused me Londoneye, I really had thought that I had got it right and that if you carried out the work in the UK, you paid tax there.  But SamdeB's info conflicts with this.[:-))]  Really, this is when we need Will and co!

[samdebretagne]

Maybe I'm wrong after all then - but this is what I was told by the URSAFF office (in Strasbourg, I think??) that deals with all the accounts of foreigners working in France.  They said that you pay where you reside, no matter where the money is earned, with only a few exceptions for those under special circumstances. 

It'd definitely be worth seeing a qualified accountant if you're thinking about doing that - I'll be the first to admit that you can't take everything you read on these sites as the absolute rule!  The only problem is that you can ask three different accountants and you can get three different answers!!!  *S*

[cooperlola]

Is the confusion between tax and cotis then?[:-))]

You're right about accountants but one point in their favour is that, if you use them and follow their advice then - certainly according to the contract I have with mine -  if the mistake is their's then they are liable.

[Mrs B]

I don't know whether I can shed any light on this. My understanding is if you are resident in France, you have to pay tax in France unless there is a specific requirement for you to pay tax in the UK. In our case, we are resident in France with a business is in the UK which we manage online. We are non-resident landlords so we have to pay tax in the UK on our rental income. We have to declare the UK income and the tax paid in the UK on our French tax returns. We then pay tax in France on our investment income. Our tax band in France takes account of our UK income.

Our E106s run out in January 2008 and we want to register our UK rental business in France so that we cease to be classed as 'inactifs' and can become 'loueurs en meublé professionnels' and pay cotisations to the Régime Social des Indépendants. We went to our local Chambre de Commerce yesterday who seem to think that this might be possible but weren't really sure.

Has anyone got experience of registering a UK-based business in France?

 

[makfai]

I was in a similar but not identical situation to you.  In my case, payments would be made into my business account in UK by clients from the UK but I would have been performing work in France for those clients while I was resident in France.

I asked the UK HMCR for their advice and they said not a problem, carry on as before as an employee of the UK business and just declare it in your French Tax return.

I was not too confident in this advice so I posed a similar question to the Tax Attaché at the French Embassy in London.  I asked if it would just be OK to treat me as employee of the UK company and provide the full information in my French Tax Return as you are now doing so that any liabilities could be taken into account..

She advised that I should set up a business in France so that I could then basically sub-contract the work from my own business in UK. She explained that if I didn't do this the local tax authorities may decide to conduct an audit of my tax position suspecting that I was avoiding tax and cotisations in France.  She did advise that I discuss this with the local tax office in France and I intend to do that once we are settled. I would rather have them on-side from the start because if they audit you later they are extremely ruthless about all transactions through your accounts

So I saw the logic in this and now that the health care issue has blown up the advice probably works in my favour as it will mean that I will be part of the French Health care system.

The difference between my situation and yours is that I would be doing work in France for people in UK rather than in your case managing a business which takes place solely on UK soil.  In view of this you may find your situation different to mine.  I would work out what you want to do and discuss it with the local tax office.  As regards businesses in France generally you may find this information useful:

http://www.french-property.com/guides/france/working-in-france/starting-a-business/

http://www.britishembassy.gov.uk/servlet/Front?pagename=OpenMarket/Xcelerate/ShowPage&c=Page&cid=1150454460655

[Mrs B]

Thanks Makfai. I'll have a look at these links.

[makfai]

These may be of interest to some people with queries on this subject

Living in France, working in the UK – can it be done? http://www.frenchentree.com/fe-legal/DisplayArticle.asp?ID=28289

Running a UK business and living in France – how to save tax http://www.frenchentree.com/fe-legal/DisplayArticle.asp?ID=27907

Personal Taxation in France  http://www.french-property.com/guides/france/finance-taxation/taxation/

Taxation of Business Profits http://www.french-property.com/guides/france/working-in-france/starting-a-business/taxation/

Health Care Services in France http://www.french-property.com/guides/france/public-services/health/