French Tax on Uk Income

[jezrourke]

Hi ,

Here is my situation , I am purchasing a property in the lannemezan area of France whic will be my main residence with my wife and parents. I will be working in the uk Mon/Tues/Wed and then from france Thur/Fri at this new residence. I am paid a monthly salary in GBP(£) into a uk bank account. I want to know if i am subject to paying further tax on my income ? 

thanks

jez

[Russethouse]

There are lots of posts about this topic - you could start here : http://www.completefrance.com/cs/forums/875920/ShowPost.aspx and then try the search facility.

After a little reading I'm sure you will have more specific questions.

 

[Llwyncelyn]

this is a hugely complex situation and centres of economic interests residence domicile and all associated matters come into play  The advice I would suggest you would receive from this forum is to take professional financial advice.

Lots on here would have opinions but those opinions may be wrong and equally may be right thus outside advice is called for.

I have little doubt that this has been covered at length on this forum thus the archives is a good starting point and with a bit of luck one 'Will' may be able to help for I think he works primarly in the UK but has residence here?  However some would say to beware of the 183 day rule I say to be aware of the 90 day rule including travelling days.

rdgs

[Will]

As Llwyncelyn says, this is a very complicated subject and one on which you should take professional advice. As he says, I have personal experience of various combinations of the live in France/work in Britain/work in France for UK clients equation, and I know how complicated things can get when you don't fit neatly into any of the pigeon-holes provided by either country's tax system or the double taxation agreement that exists between Britain and France.

There are some basic rules, such as the 183 days and 90 day rules that exist in Britain (and France can apply different residence qualifications), and the slightly more unofficial rule that says 'the country that taxes you is the one in which your bum is on the seat when you carry out the work'. You won't fit this one either - my suspicions are that you would be taxed in Britain rather than France but those two days you mention could cloud the waters considerably.

Even more significant than tax is social security. If you get things wrong you can quite easily lose two thirds of your income to the French authorities - again, the basic rule that seem to be applied is that you pay social security in the country where you spend most time, but if you have dependants in another country that can confuse the situation considerably, particularly once you get beyond the period for which any E-forms may be valid.

The other vital, unarguable point is that it is not you who decides where you pay tax and social security. It is the tax/social security authorities. All you can do is to try and arrange your affairs, with an accountant's help, so you are likely to get the most favourable treatment for you. Also, outside the guidance provided by the double taxation agreement, the UK tax authorities cannot advise about either French tax, or social security in either country, and vice versa, likewise the social security people cannot advise on tax. So it can be very difficult to get a definitive answer to any of these questions.

There are plenty of people who may say I am wrong about what I have said above. Maybe, but it is based on my experience, plus advice from a very knowledgeable accountant in France who deals with a lot of UK workers, and advice from responsible people in HMRC. But everybody's situation is different, so for anybody whose affairs are the slightest bit non-standard, professional opinion is an absolute must.

[jezrourke]

do you have any pointers as to where i could start , seek out professional advice before i commit to making a purchase in France...i dont fancy the idea of having two thirds of my income grabbed from me by the french authorities !

[Will]

You will find people advertising finanial services in the magazines like Living France of French Property News. They tend to specialise, though, in the tax affairs of the retired (including the early retired) and will probably not be able to tell you about the much more significant social security payments that face people who work. Reckon on social security charges (cotisations) representing 20% of your wage, if on a salary from a French-registered employer, or 46% of your taxable income (i.e. income less costs and expenses) if self-employed.

The two thirds is a worst case, though not unknown, which can result from getting the registration process wrong and ending up being liable for both employer and employee cotisations. So if you do intend to work in France, particularly for a UK-based company, do see a good French accountant before you start trading to make sure you get set up correctly.

[jezrourke]

just to confirm that i am not self-employed , i am employed by a uk company on a PAYE basis. Does this help thiings ?

[Will]

It helps in so far as your tax while working in UK will be taken care of. You still need to establish exactly how and where the work you do while in France will be taxed, and where you will pay your social security charges. You can start with HMRC, who are very helpful, though they will be unable to advise on the specifics of either French tax or any social security issues, they should be able to point you in the right direction.

Answering such questions is outside the scope of this forum. I would expect you to pay all your tax and SS in UK, but this will have to be confirmed. It is what the double taxation agreement would suggest, but that covers only tax, not social security.

Alternatively you can just keep quiet about doing any work in France, but you did not read that here. And it does not really help the health etc cover position of your dependants in France, who I presume will not be working or paying into the French system in their own right. I would suggest you talk to DWP in Newcastle about their eligibility for E109 or E106 forms.

 

[AnOther]

Sage advice from some very knowledgeable people but I think we should check that we are reading you post correctly i.e. will you actually be working in France Thur/Fri and if so what type of work will it be and where ?

As Will points out, what you actually do on those days could be absolutely crucial.

If you were just working at home on the computer for instance then frankly I don't see it as an issue however if you were working for say the French office of your UK employer it could be an entirely different situation.

[Will]

I quite agree with Ernie - there are so many variables, many of them hidden.

You could see the accountants I use, but they are France based (near Rennes) and their knowledge is mainly on the French systems rather than the UK which you would most likely come under, at least primarily. Many of the big accountancy firms like KPMG have offices in both Britain and France so should be well equipped to advise you - but it will probably be costly and they seem to be more interested in company affairs, including self-employed, rather than personal taxation. Your best bet might be the French Chamber of Commerce in London, which knows of accountants based in England who understand the French systems too. Nothing can be done on the cheap, but as the consequences of doing nothing, or doing the wrong thing, could work out very expensive, look on it as an investment in your future.