NIC and Tax France/UK

[Mark_Trambly]

Yes this may have been covered but despite various historical searches through the archive I couldn't find the correct answer.

Here goes:  I live in France and am treated as being domiciled there as it is my only residence and I don't live in any other countries.  What I do though is work as an employee for a UK registered company but never in France.  So I must pay UK NIC and UK tax.  The UK have told me that I must declare to France my earnings but any contributions will be taking into account.  The UK guy said that I wont have to pay social contibutions in 2 countries.  He said that I should apply for a E106 for health cover in France. 

What do the forum have to say to this.

Regards to all.

Mark 

[BJSLIV]

How often do you visit and how many days work do you actually physically perform in the UK in a typical year ?

[Nick Trollope]

Hi

a) You should not be paying NI in the UK, you should be paying tax (at the moment).

b) An E106 is inappropriate unless you live in France and work EXCLUSIVELY in the UK (i.e. actually being there).

You should join the French health, unemployment benefit & pension systems. Your UK NI contributions only have an influence on your UK pension, and only when you are of retirement age. NI contributions are not health insurance in the UK.

After April, you should ask your employer to pay you gross, and declare the income on a French tax return. This may require your employer to set a "branch" of their organisation over here. You will not be taxed in both contries.

As it happens, this is exactly the same situation as my Wife & I are/were in. It has taken us 18 months to sort it out! Don't bother to ask an accountant here (or UK!) as they won't know (we tried 4), ask at your local URSSAF, Hotel des Impots and/or the Chambre de Metiers/Commerce. Don't bother to 'phone or email. Visit them in person.

Believe me, this is a complex subject, so don't expect any easy answers. I found that it was easier to give up my UK job & start again over here. 'er indoors has just been given notice of redundancy, which means that she can claim UB over here, but only because we worked very hard on sorting it.

 

[Coco]

After April, you should ask your employer to pay you gross, and declare the income on a French tax return. This may require your employer to set a "branch" of their organisation over here. You will not be taxed in both contries.

Be careful.  BE VERY CAREFUL!  This is EXACTLY what I did two years ago.  My boss was paying me my gross salary, but when URSSAF came to work out cotisations they took 60% of my earnings.  20% contributions from me as the employee of the "branch" of the UK company and a further 40% as the employERs contribution.  As I was the sole representative in France it was deemed that I was the employee and the employer.  Their reaction to me when I said that I couldn't afford this and that I was only an employee of the UK company was that employer contributions are 40%, if I didn't want to pay them myself then I had better ask my UK employer to pay them.  They weren't bothered who paid, as long as it was paid.  There was no way that my boss was going to pay another 40% on top of my gross salary - and to be quite honest, why should he?  I chose to come and live in France, he didn't send me here.

[BJSLIV]

The things that Coco mentions are exactly why it is so hard to do the remote working thing.

It is incredibly hard to work out an equitable way to pay someone who is working remotely in France. If an employer does it properly , they are initially put off by the paperwork involved for a one-off employee. Ok they decide to go ahead despite the paperwork.then they find out how much the charges are, and begin to wonder if the employee is worth the additional spend.

So perhaps they pay you the gross amount they paid before including the NI contributions, but the remote employee is then left with all the charges to pick up.

So why not go freelance and work for them that way?. But then you have no job security and only one customer.

It ain't easy.

But, to return to the original question. If you aren't working in the UK then you shouldn't be paying NI, but should be directly enlisted in the French system.

 

 

[Will]

It is indeed a complicated subject. There is contradictory advice, even from DWP Newcastle, about working with an E106. If you are entitled to one, or any other EU social/health form except those like E111 or E121, you can continue to pay tax and NI in UK for the period of validity of the form. When the form expires you have to join the French system.

You can't, at least in theory, pay NI in UK and tax in France. There is an exception in that you can pay voluntary Class 2 or Class 3 NI contributions to maintain your UK pension rights, but you have to look carefully at the balance between what you pay and what you get back.

The system is that if you live in France, you pay tax and social charges in France.

E forms provide about the only legal alternative, but they have limited life (usually a maximum of two years where France is concerned). It is further complicated by UK and France applying different residence criteria for tax purposes, though there is a dual taxation agreement, so you can't say that because you pay tax in one country you don't need to pay or declare in the other.

[Teamedup]

The UK employer is getting away cheaply if they simply pay gross salary and the overseas employee is expected to sort the french system out. They do after all have charges over and above that for their employees.

[Owen]

Hello,

My knowledge is of healthcare in France and I comment because of mention of E106. There are key points in the replies so far.

If you are actually living in France and you are exercising your business activity here (albeit remotely) then you should be registered as either self-employed in France or as an employee of a UK branch office. But the UK branch office must be effectively registered as a business in France with the associated costs involved. The fact that you are working for a UK registered company and even if you are paying UK NI and Tax is irrelevant. The basic concept is that of your "principal establishment".

If you work for a UK company and you actually conduct your activity in the UK then this is a different matter. You can quite properly pay contributions in the UK. Because of budget airlines, weekly commuting to the UK and spending weekends in the family home in France is increasingly common. And, depending on your precise circumstances healthcare provision for you and your family in UK and France can be achieved by judicious use of E Forms.

If you work for a UK employer actually in the UK for part of the time then these particular earnings can be subject to UK NI and tax. You will still have to declare these earnings on a French tax return but any UK tax paid will be offset against your French liability. Effectively for the vast majority of people there will be no further tax to pay in France. But work conducted in France would be subject to French rules.

Unless you are extaordinarily lucky, talking to accountants and lawyers is wasted money particularly when they are UK based.

Regards

Peter Owen

pjowen@expathealthdirect.co.uk

[cyclebum]

Hi I live in France and work for a UK company. I am one of around 20 guys and we work all over Europe including the UK. The company has one office and wharehouse in France aswell as the UK. I pay all my tax and NI in the UK and I recieve payslips like any UK based person would. I have asked my boss as to the possibility of being paid gross and paying my own tax in France but his reply is that as I spend so little time in so many countries he would have a paper work nightmare. I think this is more of a 'can't be bothered excuse.' I spend 3-4 months in France but not at any one time. I would be very happy with a shelf stacking job in a French supermarche but my lack of fluent French holds me back. I don't know if my tax situation is ok or not. I'm dreading going to the Hotel d'impots as I may blow their computers. Any one been in a similar situation?

[Owen]

Hello Cyclebum,

In my opinion the arrangements you have in place are the best you are going to obtain. Although I am not a lawyer I think you and your employer are safe on legal grounds too. If one works in two or more EU/EEA countries then you remain insured by the UK if the company for whom you work is based in the UK. This appears to be the case with you.

I would certainly not approach either the Hotel des Impots or URSSAF. I also think that trying to be paid gross is a no brainer too. You and your employer are going to have to pay contributions somewhere and they are almost certainly going to be less heavy in the UK. If you really want to try and confirm your status I would contact the Inland Revenue (Centre for Non-Residents) in Newcastle upon Tyne. But do not preface any request with a wish to pay nothing!

Regards

Peter Owen

pjowen@rivieramail.com

[cyclebum]

Thanks Peter for the informative reply, agree no brainer to pay tax here but chose to live here, therefore be happy to pay tax here. Also if not registered with hotel d'impots would be hit for capital gains if selling my one and only residence here.

[Richardbk]

[quote]Hi I live in France and work for a UK company. I am one of around 20 guys and we work all over Europe including the UK. The company has one office and wharehouse in France aswell as the UK. I pay all ...[/quote]

If you work for a single employer than what you are doing seems OK. If you were working for multiple employers in different EU countries then under EU directives you should pay TAX and NI in your principal country of residence- probably based on where your main house/family reside.

regs

Richard