Working for a UK company but living in France

[beachbunny]

Hi

I am sure that this has been covered many times before in the Forum but unfortunately i can't find it, so i will apologise in advance for asking again!

I need some advise PLEASE.........Here's the scenario.......We are living in France but own a limited company registered in the UK. So technically we work for them. The company itself will obviously keep on paying taxes in the UK but I think we need to be paying tax here in France on our wages. They are paid to us in the UK into a UK bank but we are living here full time. Does anyone know how this works? We live in the Lot et Garonne (47) so if anyone knows of a good accountant we would be grateful for any recommendations. We are not planning on moving the business to France as everything is already set up back in England and we can run it from France just as well. (Our work is internet based.)

Also as the company would be apying into the UK tax system would be still be entitled to any benefits or healthcare from the UK?

Any help would be appreciated.

Thanks

Phoebe

[Pangur]

http://forums.livingfrance.com/shwmessage.aspx?forumid=279&messageid=185549#bm185947

http://forums.livingfrance.com/shwmessage.aspx?forumid=279&messageid=85209#bm84980

I think the rule of thumb is, if you're working and living in France permanently, you need to pay social charges and taxes here. There are ways of paying into the UK system for up to two years, but if you are here permanently, you need to be paying into the French system.

You can become legal representatives of the company in France, which means you take responsibility for paying employer and employee social insurance contributions. We've found it a staightfoward process to set up with our accountant, but we now know why there are so many complaints about the high cost of employing someone here. If as owners, you are paying your own wages, it is going to cost you a lot more. For example, about 66% of my husband's UK gross salary, including UK rate of employer social payments is handed over to the French government.

[Viv]

I think if I remember rightly from those in the know, that you have to set up a a subsidiary of the UK company in France in order that you pay all the required social charges and taxes.

I think the general advice has been to re-start your business over here, because though expensive, its easier in the long run.

Where's Will the Conqueror when you need him?

[Will]

....in Rotterdam.

I can't add much to what the others have said, this has been discussed many times before so even if the search doesn't work for you then a look down the topic titles will point you in the right direction.

The French Chamber of Commerce in London can be very helpful to those wanting to set up or move a business to France, see also the www.apce.com web site.

[Owens88]

Forgive me if this is pedantic.

I know that if resident in France one pays to the French state on the basis of worldwide income. No challenge to what has been said here already.

Income can be wages (director) or dividend (shareholder) or capital gains (presumably as shareholder) or pension. Whether these are taxed differently I do not know.

However, I do question whether a part owner of a UK business who then goes to reside in France is necessarily involved in relocating the business to France.  Obviously if it trading/performing within France, or if the owner becomes a local representative office etc., then the situation is clear.

But if the main office (and billing /selling points) are 'offshore', and much of the work is done 'offshore', at what point does doing a bit of 'bringing work home' necessitate the full conversion ?

John

[beachbunny]

Thanks for all the replies so far. They have been very helpful.

We will definitely never be moving the whole business to France, so that option is out of the question. The setup we have in the UK is too good and reliable for us to change it. We just don't want to live there!

The business we are involed in is mainly sales and as yet we are not selling directly to France. The majority is to the UK and all money is handled there too. I suppose that what we need to determine is how much of our personal income should be taxed here. We are still paying NI and stuff in England.

It just seems to be so very complicated!!!!!!

Phoebe

[Will]

John, it is indeed very complicated. The general rule is that if work is carried out in France, other than on a very temporary basis, it needs to be done through a French registered business. Tax residency qualifications are different in France from Britain, but more to the point is the health and social security situation as E forms like E106 and European Health Insurance cards may not cover you. It is best to take qualified advice if in doubt - forum users have in the past fallen foul in a big way of the French social charges systems through working, even on a part time basis, for British companies while living in France.

[Owens88]

Will

I don't doubt for a moment what you say, but as you see the OP doesn't want to operate in France.

I have known musicians, business leaders and more who 'take work home' while living in France or 'on holiday' wherever they are. It may well be that they 'haven't been caught yet' so I am not advising anything, and am not in a position to advise. I am curious though.

Cheers

 

John

 

[JS14]

[quote]Forgive me if this is pedantic. I know that if resident in France one pays to the French state on the basis of worldwide income. No challenge to what has been said here already. Income can be wage...[/quote]

Not so. Income earned in another country might or might not be taxable in France. It depends on the tax treaty between France and the country concerned. I was employed in Holland while resident in France and my income was taxed in the Netherlands and not in France.

[Teamedup]

JS14 didn't you have to declare your dutch income in France and the amount of tax paid on it anyway?

 

[JS14]

[quote]JS14 didn't you have to declare your dutch income in France and the amount of tax paid on it anyway?[/quote]

Yes, you have to mention the dutch earnings on the tax declaration. The income tax paid in the Netherlands doesn't reduce any tax that you have to pay in France on other income. As far as I can see, the Dutch income can be taken account in deciding the marginal tax rate that you pay in France; that's why you have to declare it. I suppose that if you earned a million euros in the Netherlands and 100 euros in France, the Fisc might tax you at 60%, or whatever, on the 100 euros.

[Amandap]

Hello - sorry in advance for the lengthy reply, just glad to be able to post something useful to people out there.

We are in the EXACTLY the same situation as you and it has taken a while to sort it out, based on advice that sent us round and round in circles.

You need to register at URSSAF as 'a sole representative in france of a foreign company' - not as 'a 2nd branch of UK company' (we did this in error and am now in the process of trying to change it. This option brings with it the necessity to pay corporation tax in france based on 'company profit' here. Since all we bring into france is my husband's wages, there is no 'company profit', and therefore unless I get it changed, will have to employ an accountant to do the co. books!) So, do the first thing, i.e. 'sole representative of foreign company in france'. You'll get a SIRET number with either option.

Now, in order to be able to be 'salaried' over here (cheapest option), you or your other half must not be 'gerant majoritaire', i.e. adding your div shares together must not receive more than 49%. (possibly not more than 50%, but we didn't take the risk, seek advice!) Not sure if this applies if you are not married. If you are not in this position, or cannot put yourself in this position, then I think you have to register as a TNS (travailler non salaire - or something like this). In addition to 'salaire' being the cheapest option, it also means that you and your family can get a carte vitale as long as your hourly rate is more than €8.03 per hour and that you work for more than 60 hours a month.

If you are able to be salaried, then you can register online, or at URSSAF, with a 'DUE' (I think). It just states when you are starting work, and for whom. You can probably do it at the same time when you register as 'sole representative' although won't be able to put the SIRET number on the DUE yet.

As for not paying tax in UK. You'll need to keep on top of this. I'm still chasing my husband's NT (no tax) code, IR have made a right pigs-ear of it, but hopefully will come through soon. As for NI - we don't want to pay it as we can't see the point in guarding NI interests back in England - if you do want to be exempt from this it is IMPERATIVE that you say that you carry out 100% of your duties outside the UK. You probably have to say the same thing to get a NT code. We also run an internet business - most IR employees find it difficult to believe that you really don't have to go to the UK at all!

If you have been given a workers E106 then unless you've been seconded here by your own company (!) I don't think its valid. If like us, you were too honest with the inland revenue and said you were moving for good, they won't have issued an E106. By the time we sorted it all out we'd been in france for 9 months without any cover, with 2 young kids - luckily we didn't need it, but still paid a good €400 in visits to the Dr. for vaccinations etc. Look into signing up for CMU at CPAM initially if you think the above may take a while.

Anyway, hope this helps. I believe it to be correct - pm me if you want to discuss any of this.

Just like to add: a big 'thank you' to babnik and his OH, without whom we would still be wondering what the hell to do!