Do I "work" in the UK or here in France?

Employed & Self Employed Auto/Micro-Entrepreneurs
22

Sorry and all but just to pick up on this - if by last summer you mean summer 2016, you should have submitted a tax return in May 2017. It’s a legal obligation. I’m not sure why your income being below the UK tax threshold is in any way relevant to France, and I don’t think HMRC is qualified to advise people on whether or not they need to submit a French tax return. If you live in France you’re subject to French law not UK law, and that includes tax matters.

Apart from which, it’s a bit silly not to submit your tax return for several reasons, firstly because if you’re retired on a modest income you would have probably qualified for a reduction or even exemption on your tax d’habitation this year if you’d declared your income, and secondly because come Brexit, the date when you moved to France could become important, and the gold standard for proving residence is your avis d’imposition ie your annual tax demand. It’s the people who are living below the radar that are likely to come off worst in Brexit.

1 Like
23

You are correct in that DTAs apply to individual countries so those would not be affected. (mostly, there’s some stuff about personal allowances and EEA nationals in the HMRC notes so I guess that could change).

24

What’s in place as regards Import Duties is the original WTO agreement that was signed a donkey’s age ago. (See here.)

Meaning that the UK reverts to the duties that existed then.

25

I think the idea that we could “simply revert” to WTO rules is the subject of debate.

26

Yes, but that is where the EU has Britain by the, uh, “short 'n curlies”.

The WTO tariffs are not the least bit preferential, and the attitude in the EU is “If we do make any special arrangement with GB, we set a precedence for other countries wishing to leave.”

Which is a monumental No-No.

Aside suspiciously from Poland (and its wacko government at the moment), there is no real, identifiable movement to leave the EU. Of course, with the recent election in Austria, that fact remains to be seen …

PS: Moreover, since the WTO works by consensus and not voting - simply applying the agreed tariffs is the easy part. If not reciprocated (on behalf of GB), then the negotiating hard-part begins. Why did nobody explain the WTO-workings to voters BEFORE the Brexit vote; and if it was explained, why did it not “sink-in”?

27

Thanks, Anna
… and all the other helpful folk around here.

Sorry if I wasn’t clear. HMRC told me I didn’t need to do a UK tax return as no liability for UK income tax.

I must confess we’d not thought about registering with the French tax authority (simply because I haven’t earned anything here yet).

Can we do it online? What are we looking for?

And also if anyone can recommend a good source of advice as to the various regimes of self-employment I’d be obliged.

If I’m not an autoentrepreneur, do I need an accountant to do the books etc or does a file of invoices, receipts and an explanatory spreadsheet fit the bill? What are the personal experiences of folk here?

Thanks again.

Ken

28

The way you get registered for tax is by submitting a tax return. It’s up to you to ask for the forms from your local tax office for your first tax return, after that they usually send them or you can opt to go paperless and declare online which I think most people do - it’s simpler and the fisc encourage you to. The tax forms come out starting in March or April so you need to go to your tax office and collect them next April. Usually there’s plenty of reporting and public service announcements on the radio and TV and in the newspapers, and posters put up locally to remind you. I would have thought it’s impossible for anyone who lives in France to not realise it’s tax time, although some people seem to manage to remain blissfully unaware.

Self employment: comparison of the different options here
https://www.afecreation.fr/pid15073/les-structures-unipersonnelles.html&tp=1

29

For someone in your position a French tax return should be fairly straightforward. If your only income is from a U.K. OAP and a few savings, small enough to be under the UK tax allowance, it should not cause any major problems. I do, however find it strange that you moved to France with the knowledge that you would have to enter the French health system but did not consider your responsibilities re tax. Residency is a 100% commitment, you cannot have split residency.
There is plenty of help online, especially on forums like SFN, about making your first tax declaration and although I understand that it is not popular with everyone I have found the Connexion’s Tax Guide useful as well. Your problem is that we are now in October, between the dates to declare your income for 2016 and those for 2017. Your U.K. OAP should be being taxed in France not the UK as should interest on savings etc. One possibility would be to go and talk to your local tax office to explain your position, they may look at your arrival date and tell you to wait until May 2018 to make your first return, they may help you to make a late return for 2016. With Brexit looming I would try to get my tax history backdated because the length of time that you have been tax resident in France might be an important feature once your EU Citizen status is cut.

2 Likes
30

As already stated, it is not for you, nor your possible employer to chose where you pay tax. You are resident in France, you have put yourself into the French Healthcare system, and you should be filing a French tax return, declaring your UK income on this French return.

It looks to me as if you would become a French resident, employed by a UK company, and they should register you as such with the French authorities. As I understand it, you would then move to being formally in the French system as an employee, depending of course on the number of hours in your contract, you with have access to French social benefits (health etc.) as an employee. Both you and your employer would have to pay the French social charges, which are not insignificant - think 40% for them and 20% for you as a rule of thumb.

So, do think long and hard before you accept this role, understand what it means, and what are the positive points and what are the negative ones. Depending on the outcome of the current Brexit negotiations, you will either continue with your current blissful UK retired person status as regards medical care, or you will not. Some people would turn to taking a salaried job in France just to be sure of being in the French system, but as you are doing that quite late in the Brexit process, that would either be positive or negative on how you assess it.

I would recommend you talk to a French tax lawyer, NOT a French accountant NOR an British Financial Advisor, to get the correct advice so you can make the best decision for your personal situation and you personal objectives.

Best of luck whatever you chose to do!

1 Like
31

There’s also a difference in the UK between where you are resident and where you are domiciled.

32

Talk to the tax people here in France, they are not the dragons people think they are, but be prepared for complications just the same. Trying to ignore the basic fact that starts with your message that you do indeed ‘live in France’ - have a Carte Vitale and a Bank Account etc;, means you are already traceable and contactable by the various authorities. Note: Tax Authorities here CAN access your bank account(s) quite legally under the money-laundering acts.

Basic facts are that if you can prove by written statement or official documentation that any and all monies received in France have already been ‘taxed at source’ you will need to add that to your annual fiscal return. If, like me this means your ‘income’ in France is under the taxable level, then you will have no problems. This applies to me.
.
As others have noted, it is simply not worth playing games with the Tax Authorities here - or even to be seen as playing games.

Of course there is a potential problem area looming for all who have not taken French Citizenship, which is the final upshot of Brexit. At the very least status of Brits in Europe will change legally, and so many arrangements will disappear - almost certainly the Health Coverage side of things, although I would expect the French Insurers to come up with ideas on that as after all it is close to a million plus pieces of new business!

Residency will still be a simple matter as it once was, with you having to prove ‘you will not be a burden on the French State’. Again quite how that will be interpreted via Brexit remains an unknown. Plus Macron’s fiscal policy does seem odd at this time, i.e. increasing taxation for the lowest paid, and eliminating it for the rich.

So many imponderables in view, but even opening a document with the tax office nearest to you will be a positive move. They are not there to rip you off, but to apply the rules, even when we don’t like them.

33

Thanks again, everyone

Just to clarify, in the UK I was winding down my consultancy work on the grounds of ill-health and retired completely when my OAP arrived. Income was below the tax threshold, so tax was not “on the radar” any more. Health On moving to France it did not occur to me that there could be new work coming my way, so it didn’t occur to me to register for tax over here.

The prospect of this first project has obviously changed that – and when I mentioned it to a friend and former client in the UK yesterday he said he might have a couple of small jobs for me in the coming months.

So I think I will have to register here as a self-employed person – but equally obviously need more homework and advice on type / category.

But I don’t understand how the French distinguish between employed / self employed.

The nature of my work is typically that clients describe (or have me work out) their situation, and I then develop a strategy / plan / programme for marketing and / or communications.
Some parts of that plan I might manage personally (eg media relations) or carry out directly (eg script development, copywriting / editing etc).

In some cases the plan is the deliverable – I hand it over, the client says thanks [or something else] pays the final fee and that’s it. I may or may not have any further involvement.

But essentially I’m directing myself or other people, rather than being instructed by the client. So there was never any question of consultancy being disguised employment. Is it the same here?

TIA

34

Re registering for tax - the reason people are mentioning this is simply because under French law, every resident must declare income to the fisc annually, regardless of whether or not that results in you paying any tax. It’s a legal obligation, everybody has to do it. Droits et devoirs and all that.

Re disguised employment, the main criterion is the level of supervision. If you’re given a result to deliver and it’s up to you how you achieve the deliverables - the methods and materials you use, the timescale - that is normally s/e. If you are told what, when and how to do the work, ie carrying out an employer’s instructions, that is employment. There are other criteria but mainly they stem from the supervision one - can you subcontract all or part of the work; can you turn a job down; if you make a cockup, do you absorb the loss or are your earnings unaffected and you employer bears the loss; is your business financially dependent on the employer/client ie if they went into liquidation tomorrow, would you still be in business; do you market your business, do you bid for work, do you set your fees and issue invoices or does your employer offer you a salary and give you payslips, are you in charge of the strategic direction, can you decide to change the focus of your activities, etc etc etc. Essentially France doesn’t have a “freelance” category, a self employed person is simply a person running a business that employs only him (or her), and it’s fairly obvious, really, whether a person is running a business and all the cr4p that comes with it - keeping accounts, budgeting, maybe investing, thinking of ways to become more profitable - or whether they’re working for their employer’s business and letting him worry about all that.

But the main one is the relationship between worker and client/employer - level of supervision versus degree of independence, and from what you’ve said, I would say you could be unquestionably self employed… Some people will tell you you can’t be self employed if you have only one client but that’s an urban myth - it would be unusual but possible, just as having two or more ‘clients’ doesn’t automatically make you s/e - all of some of them might be classed as part time employers.

I think the confusion was that in your first post it sounded as if your employers were going to put you on the payroll:

It would be better if you invoiced them per job. A monthly fee is in effect a salary, and that’s what it will look like to your bank, because no genuine business achieve exactly the same turnover same month after month after month. Why not simply agree a fee per project, and if they’re long projects invoice in several stages if you want? After all part of running a business in France is knowing how to set your fees and charge for your services.

35

‘It did not occur to me that there could be new work coming my way so it did not occur to me ro register for tax over here.’

Did you do any research before moving? All French residents have to complete a tax return declaring all their worldwide income and open bank accounts. As mentioned above you will be subject to tax on your pension(s) and any bank interest etc. Being tax resident in France will also alter other things, you will no longer be able to receive tax free interest on ISAs and any Permium Bond winnings will be taxed too. By moving to another country you have taken on responsibilities, you now need to discover exactly what they are.
I would be tempted to talk to your former colleague who used to live and work here, he will be aware of the complications.

1 Like
36

You will no doubt have to pay some tax somewhere if you start earning again. I suggest you do some sums. Elect for whichever country gives you the best (lowest) tax bill.

37

You cannot do that, it’s not that simple.

1 Like
38

Oh not this theory again.
Read the DTA and see what applies to you. You are obliged to pay tax where tax is due, not wherever you fancy.
Any government will be only too pleased to take tax off you if offer. But if in fact tax is due in country A, and you haven’t paid any tax in country A, then country A will fine you if it happens to notice. The fact you have paid tax in country B/C/D or wherever you happened to fancy, makes no odds to country A, as far as country A is concerned it’s tax evasion.

1 Like
39

OK I will explain. We moved to France in 2005 and subsequently became resident here. We are both pensioned, being occupational (my husband’s government pension), state pension and two private pensions. We elected to be taxed in France and were able to do this under the dual taxation agreement. However the occupational government pension is taxed in the UK under another agreement signed between France and the UK. We have no choice in this. It gets more complicated where investment income is concerned, especially if it is rental income. Earned income, I am not sure but going from the original post it would seem he is being offered a series of options.

As for paying tax where tax is due, not so. Our state and private pensions are payable in the UK but taxed in France.

40

You can influence how your income is treated, by how you structure your business. But having structured your business, you no longer have options, you have to follow the rules that apply to that structure.

I don’t understand why you say “not so”. Under the DTA, UK state retirement pensions and most types of UK private pension are taxable in France if you live in France, so that’s correct. If you live in France you couldn’t have elected to pay tax on your UK retirement pension even if you wanted to, because it’s taxable in France, that’s what the DTA says. If you’re resident in France, the UK is only interested in income that under the DTA is taxable in the UK (eg UK civil service pensions, income from renting property in the UK). You declare worldwide income in France, and any tax you have correctly paid in the UK on these souces of income, is taken into account when France calculates your tax bill.

2 Likes