UK employee, French tax?

[Xophe]

Thx Steve. It's bad but 43% is better than 65% - as Will suggests. So including income tax I think we're saying you lose bout 50% of your gross income. I am happy to pay a bit more for a better Health Service.

Xophe.

[Cricks]

Hello,

I am actually exactelly in the same situation (and geographically pretty close: Pays de Gex near Geneva). I have been working for a UK company for 8 years. They have agreed on principle for me to move to France (where my boyfriend lives). I am a French National. I have been looking into it quite a lot. So far, I have calculated that with the social charges difference between France and England, it would be equivalent for my company to raise my salary £15,000/year (for them, from 12% to 40%) which is quite a big sum considering they are doing me a favor - That doesn't take into account the CSG and the other tax that I think companies have to pay for. I will also lose £400/month myself between the Revenue tax and the Social charges. I am not sure what my option are. I am the owner of a small flat in London that I will be renting to a friend - I could keep some of the bills in my name, hence a partial residency. I will also be going back and forth between France and England. However, my move is long term and I am not looking for a quick fix. I was wondering if there is any possibilities to keep on paying social charges in the UK even if the Revenue tax is payed in France. Does the same number of days rule apply?

 

Thanks for any help!

 

 

[Cricks]

One More thing - Steve, when you talk about 43% that is only if you are self employed right? As far as I understood, if you stay employed by the UK company you are the representant of the company in France, hence the company has to pay your social charges. You then have to pay your own as Will explained. Could you please clarify that point?

Thank god for this forum, I have been looking for other people's experiences forever and was starting to get quite depressed.

[Babnik]

I am employed by my company and not self employed, but the French authorites have no juridiction over UK companies, so I (as the representitive of the UK company in France) am liable for all charges (including Employer charges). My employer pays be gross plus anything they would have paid as NI contributions in the UK, then I take care of the rest. They do not deal with the French authorities! The 43% (that's an average), is from this gross+NI. For e.g. If my wage is say 900€ a month, the company gives me 1000€ (including the NI they WOULD have paid in the UK..if you can get your company to pay the 40% or so that is the norm in france..then great!) I then pay around 400€ a month in social charges leaving me with 600€ a month. Calculations are really much more complicated than that, but I am an employee, with all the rights that French employees have (Pension/Health care/redundancy insurance etc etc) It's expensive and that doesn't include tax, but I didn't come to France for the money.....

[Babnik]

Can I also add that because in the UK, you are paid AFTER both PAYE and NI have been deducted, you never really think about it...now it's very painful to get a nice cheque every month from your employer and have to see to write a cheque every 3 months for these charges!

Steve

[Eskenazi]

I'm amazed by some of these replies. Surely

if the source of the income is in the UK (wherever

the 'work' is done) then one pays UK Tax? I

would love it not to be so, since French tax

would be hugely advantageous for us!

[Babnik]

You pay tax where you are resident....residency is quite complicated in itself, but if you are live in a country more than 182 days a year, you are considered resident in that country. The rule also says if you are in a country greater than 90 days on average over 5 years, you are considered resident. Therefore it's possible to be resident in 2 countries at the same time. France and the UK have a double taxation agreement, so you wouldn't pay both. While French tax is more advantageous than UK tax, it's the social charges that are the killer!

Social charges/NI are also paid in the country of residence. It makes sense, as you'll be using French Social/Health services if you need them, so you have to pay in France!

Steve

[Babnik]

I see a possibility for a change of career here : Tax Advisor!

[Will]

My understanding is that in France you don't even have to live here yourself for half the year to count as resident for tax purposes - if the family you support lives here, or if your main economic activity is based here, you can be deemed French tax resident. As Babnik says, you can be resident in both UK and France - residence and domicile are totally different. This can often work in your favour where the two countries in which you are resident have a dual taxation agreement, as with France and UK.

Eskenazi - my income is wholly from a UK client, invoiced and paid in sterling, yet I pay French tax and social charges, as do several other forum users. The tax isn't bad, as you say, and neither are the other charges as enormous as they are said to be when you look at the overall picture.

[Eskenazi]

According to the Tax & NI people here, if my husband

earns our income in UK, then that is where he is taxed,

and he also pays NI. We are entitled to Health Care

under the French system via E106. Quote: 'Anyone who tells you

that you pay French tax from residence, is wrong: if the

money is earned in UK, it's UK tax, and that's it.'

[Babnik]

Eskenazi,

what they probably mean is that if you perform the work in the UK, then you are taxed in the UK, even if you are resident in France (going to the UK occasionally to perform the work). Social charges are paid in the country of residence.

I'm not sure who told you that you pay tax in the UK, but I'm not, and it's the IR who have said I don't have to!

Steve

[Will]

Eskenazi - 'via E106' is the key word in your posting. E forms such as E106 and E101/E128 allow you temporarily to continue paying UK tax and NI for a limited period even if you are living in another EU country. In the case of forms like E128 specifically for travelling workers they last for one year, and can, according to EU guidelines, be renewed for up to 5 years with the agreement of the member state in which the person is working; however in practice France invariably puts a maximum of two years, the same as the normal maximum for E106.

Once your E106 has expired then you will have to pay tax and social charges in France, until you become eligible for E121 (i.e. you receive state old age pension or certain invalidity benefits.

[Richardbk]

 

"Eskenazi,

what they probably mean is that if you perform the work in the UK, then you are taxed in the UK, even if you are resident in France (going to the UK occasionally to perform the work). Social charges are paid in the country of residence.

I'm not sure who told you that you pay tax in the UK, but I'm not, and it's the IR who have said I don't have to!

Steve"

yes, the problem with the discussion of living in FR and working in UK is that there are basically 2 scenarios. The first is the border worker scenario. You are deemed to be a border worker(for EU purposes) if you work in one country and go home to another country of residence at least once per week. In this case within the EU the default situation is that you pay tax in the country of employment(this I believe is the FR-UK situation). However, many other countries within the EU have cross border worker tax treaties that mean tax is paid in the country of residence. In the cross border  scenario the 'notion' is all social security charges are paid in the country of employment, but in doing this they should provide a mechanism to get access to services in the country of residence - this clearly is a area where the UK don't seem to help very much . I.e they should issue a mechanism to enable access to health care in France - e.g E106 or its newer versions. 

The second case refers to the case of working for a UK client or company ,but being solely based in France (e.g remote tele-working etc). In this case you are clearly are liable for both social and tax charges in France, irrespective of where your company is based.

regs

 

Richard

 

 

 

[BJSLIV]

But in other postings people (Eskenazi included?) have given the impression that they have been  living in France with the family covered by e106, and that this will continue  for as long as the partner continues to work in the UK... The plot thickens!

[Richardbk]

[quote]But in other postings people (Eskenazi included?) have given the impression that they have been living in France with the family covered by e106, and that this will continue for as long as the partn...[/quote]

If they are commuting, then clearly this is OK. They can in effect continue to live as a main residence in France, but travel back and forth to the UK. They pay tax in the place of work (UK), unless there is some specific cross border worker tax agreement with the UK. The 106 is the UK method of showing that social charges are being paid in the UK and thus allows access to the French system. (in fact the EU regulation is that they are fully entitled to access to both system (for medical)- although for unemployment benefit there is some split of responsibility. If they are not commuting weekly , and I guess in reality there is a grey area, since these days some tasks could be mixed between UK and FR then it  can be disputed as to exactly where the charges should be paid - here you need an expert to look at the particular case !

For the tax , however, it is very clear. If you actually perform the tasks in more than one EU country your country of taxation is always your country of residence.  Similarly if you work for more than one employer you always pay tax in the country of residence, irrespective as to where they are situated (even if they are all in the same country)

regs

Richard

[Ormx]

Hi all,

I should be returning to work (in Ireland) around March 05 (following maternity/partental leave) but would like to stay in France and am thinking of asking to work remotely.

Could anyone advise how you approached your employer to propose teleworking? I'm trying to gather the questions/answers before I approach mine.

- Must be possible to do job from home: yes

- ADSL: yes

- Office space (computer, phone line etc. ): yes

- Is there a precedent: yes somebody already works from home in rural Ireland

Any advice would be appreciated,

O.

 

[Babnik]

Well what I did was make sure that it was clear that it wouldn't cost my employer anything extra. I suppose it all depends on how expendable you are though. I'm sure my employer would have prefered me to stay in the UK, but they guessed that had I not been allowed to remote work from France I may have left anyway!

I have to add that I was already working 3 days a week from home in the UK before this move so it's not as much of a change as it would be. I was also put on a 6 month trial basis, just in case it didn't work out. I worked my butt off for 6 months to make sure it would be ok, but I needn't have worried as they're very happy with the situation, and it's now permanent!

At the end of the day, the worst than can happen is you get a 'No' as an answer...unless you ask you'll never know!!

Steve

 

[Hegs]

It was easier for me, I was already almost a remote worker (I reported into another country's organization but was paid out of the UK office).

Ditto about emphasising no extra costs, make sure they realize you will be fully contactable, trial period etc.

Also try to find something positive for your company, e.g. offer to work late or early some days to link up better with overseas offices rather than commuting, etc, cover different bank holidays, act as the "french interpreter" etc.

 

 

[Ormx]

Thanks Babnik and Hegs for your replies. Yes I'm hoping to make them believe I'm irreplaceable, I like the idea of acting as cover for Irish bank holidays etc. They have been extremely flexible in the past when I worked 3 day and 4 day weeks and I do have flexitime, plus I get on well with my boss so, as you said, I've nothing to lose.

I've drafted the letter and rehearsed the phone conversation, so I suppose I should just bite the bullet!

[clareS]

We are self-employed, but as we still have a UK home and are a limited company, our business is based in UK and we are officially employees based abroad, so pay UK tax and national insurance (working for companies in UK anyway). If we decide to stay over 12 months (increasingly unlikely reading messages in this forum!!) we'll have to look at becoming Frenchified. Feel a bit nervous about how regular this all is, but am assured it is! Anyone know otherwise? (no, don't tell me .....)

[Babnik]

"we are officially employees based abroad, so pay UK tax and national insurance (working for companies in UK anyway)."

It doesn't make one bit of difference where the company is based, but where you are resident. If you are resident in France, you pay French Tax and Social Contributions. Only exemption is if you are on a secondment for a year, and will be going back!

"If we decide to stay over 12 months (increasingly unlikely reading messages in this forum)"

I wouldn't let anything that's been said here put you off...it's complicated and you do pay more, but you do get a lot more for your money too in my opinion. (Health Service, Community facilities etc etc)

"Feel a bit nervous about how regular this all is, but am assured it is!"

If you decide to stay over the 12 months, French authorities might question whether the move ever was only for the 12 months, but I have no idea. I played safe and got my self 'frenchified' as you put it, straight away. btw, who is it that 'assured' you?

Steve

 

 

[Eskenazi]

'It doesn't make one bit of difference where the

company is based, but where you are resident.'

This is not so: it's true that where the company is

based is irrelevant, but if the source of income is

the UK (i.e. if you are physically earning it in UK)

then you pay UK tax, without question. You have to fill

in a French Tax Return, but because of the Double

Taxation Treaty you are not taxed twice. Residency

doesn't come into it - it's simply money made in UK =

Tax paid in UK.

[BJSLIV]

I'm not sure that anyone has found a definitive answer where someone is working for a UK company, but rarely if ever visits the UK. If you are doing intellectual things and then posting , freighting, or electronically sending them back to the UK then where is the work taxable?. It sounds like France to me, but it alos sounds like tribunal country to get that  final ruling.

[Eskenazi]

No, it's quite clear, no Tribunal needed (we have been

over it with lawyers / tax specialists) - if the work is

physically done in UK, it's taxed there: if it's

physically done in France, it's taxed in France.

'Intellectual' doesn't come into it. It's where you

are when you do it that counts. If you only rarely

visit UK, then you are taxed in France. If you commute

to do your work in UK, you are taxed in UK.

[Babnik]

My mistake...If you are doing the work in the UK, then you pay Tax in the UK, even if you are resident in France (Eskenazi was right!!!) I was just thinking of my case where I do the work in France. But if I'm not mistaken, you'd still have to pay social contributions in France if you are resident there. I think it could get quite complicated if you do part of the work in the uk and part in France! Eskenazi seems very confident of what he/she says, and I have to admit it fits in with what I've been told.