I’ve posted before about moving to France and working from France for the internet based company registered in England and Wales that I co-own with someone who, for now, will remain in the UK, and received lots of help and advice. But I often end up more confused than when I started - particularly as none of us know what’s happening with Brexit even at the 11th hour!
My hunch is that Boris is going to get his deal though this week, but that if he doesn’t we’re probably heading towards a second referendum (hoorah!) In the former case, my understanding is that we’d have until the end of next year to move to France and not have to worry about visas, immigration policies etc and enjoy the same benefits as now?
What I’d really like is to find a company/individual that can help with any paperwork involved in residency after breakfast, tax and ensuring we don’t make any mistake. Although I speak reasonable holiday French, I’m terrified of bureaucracy I won’t understand and would love to be able to farm all this out to someone who can ensure we comply with whatever we need to and pay the right taxes. And I’d love to be able to talk to someone, explain our income in the UK and what additional tax we’d have to pay in France.
I guess what I need is an accountant who specialises in looking after people living in France but working for a UK company?
However, I’m optimistically taking the view that we’ll get either a transitional period or no Brexit and I’m primarily looking for advice in that scenario to understand how much extra tax we’d pay in France, whether my partner should register as an entrepreneur for his business, etc. etc. And am I right in my understanding that the deal would allow me to gain French residency and travel back to England for two weeks at a time to visit clients, run events and see the team (about four times a year).
Of course, in the event of no deal, then the conversation gets more complicated - should we move the business to France, can I get a visa, what sort… Argh.
So, let’s work on the first scenario. To be honest, we expected Boris to squeeze his deal through this week and had the house valued today ready to move in case that happened - on the understanding we’d have until the end of next year to get established in France. (Correct me if I’m wrong.)
I’m less sure now he’s going to pull it off. It’s going to be yet another cliff hanger in this never ending soap. lol
Please be careful.
Caveat 1: setting up and running a business in France, even a business without the overseas dimension, involves making decisions, and how can you make decisions if you don’t understand the rules and implications and consequences. In effect you would be asking someone else to make your business decisions and run your business for you, and that person won’t know your business as well as you do yourself.
Caveat 2: even if you follow advice in good faith and to the letter, if that advice subsequently turns out to have been duff the buck stops with you and your business. I deal with too many business owners and execs who have farmed out aspects of their business, trusted the third party to do it right and not kept a close eye on it and ended up with DIRECCTE on their backs sending letters alleging long lists of violations with fines to go with them.
Caveat 3: the withdrawal agreement and political declaration is only a framework for further discussions, and very few people know the details of that framework. The final trade deal between the UK and the EU is still way down the line. There may be things in that final agreement that will radically affect your situation at the end of the transition. Then again there may not be - we don’t know.
Presumably you must have a strong reason for wanting to move to France, but I fear that trying to keep a foot each side as it were, with your home on one side and your business interests on the other side, is going to get harder after any kind of Brexit no matter what form it takes.
Sorry to be such naysayer and by all means ignore me, but I felt I had to say it.
Many thanks for your considered response. This is, in fact, exactly why I’m trying to get some professional advice. To clarify, my current understanding is that if we leave with a deal or Brexit is stopped, UK residents who are resident in France before the end of December next year, be able to have the same benefits and rights to live in France as now and will be given the equivalent of settled status. If I’m wrong on this, please let me know.
My first assumption therefore is that we will have that period to move to France and enjoy the same benefits as now.
Your first caveat mentions setting up and running a business in France. Again, I emphasise that if my assumption above is right, that is not my intention. I co-own and have been running a successful limited company in the UK for 20 years. My hope is that that will continue but that I will live in France, as I could have done before Brexit - so again, I’m assuming a transition period.
I’m categorically not looking for advice on how to run a business - I’m looking to understand the accuracy of my understanding of the situation should there be a deal and the tax implications for my and partner of making such a move.
The problem with forums like this is that you receive so much contradictory advice based on limited information which is why I’m trying to get recommendations for professional financial advisors/accountants who can give me rounded advice based on my specific needs and situation - just as we would get from accountants and financial advisors here. The only complication with France is understanding paperwork and any additional bureaucracy involved in the transition from living in England to living in France.
Sorry, I understood you to be saying would continue to co-own and co-run the business from France. Must have got the wrong end of the stick.
If it’s just personal tax advice you need it’s far less complicated and there are a number of large reputable specialist firms.
Why do you assume you would pay additional tax? Many folk find they pay less income tax in France than they did in the UK.
As you say, the idea of a transition period is to preserve the status quo, so Brits will be able to exercise FoM subject to meeting the same criteria as at present.
We seem to be confusing each other. I will still co-own and co-run my business, working from home, as I do now. It’s just that home will be, hopefully, in France. You seem to imply that’s a problem but my understanding is that in the current scheme of things it’s perfectly fine to work for a UK company from home and live in another EU country and that, in the event of a deal/transition period, as long as I’m in France before the end of next year, the same will apply? This is really part of what I want to clarify as, given our desire to live in France, it seems to me that a transitional period linked to a deal, gives us a window of opportunity to move that we might lose, or which might become more difficult. (I’d like to understand fully the implications of a no deal Brexit and whether that would completely rule out a move to France too. )
I realise that my situation is unusual as most people don’t have the luxury of having a business that, logistically, allows them to live anywhere, and I’m not retiring to France. For clarity, the company is registered in the UK and our head office/registered office is and will remain in Cumbria where it’s been for 20 years - I now live in Devon. It’s amazing what’s possible with the internet. It’s that complexity which makes me want to seek professional advice/help and, again, if you do know of anyone you can recommend, I’d be really grateful. x
I think you might well be right on tax - as my partner doesn’t currently earn much and I believe in France tax is calculated by household income rather than individual income. Again, this is the sort of information I’m trying to seek and hoping I can get some recommended companies to talk to.
I agree with Anna that you need to understand the detail yourself and not farm everything out, as yours is a very specific situation that many of the general support services may not have enough expertise in.
There are businesses like pleasehelp.fr that say they are there to support people through the setting up phase, but whether they would be appropriate for you I wouldn’t have a clue.
You also need to be aware that you will need to check both sides of the channel as even now, pre-brexit, what is acceptable to the french may not be so to UK authorities and vice versa. In particular residency can be complicated if you spend a reasonable amount of time in the UK and have business or family ties there you can end up with both countries considering you to be resident. The French approach is also that if you are physically in France when you are working, then the proceeds of that work will be taxed here.
So yes get someone to help you with the translation etc, but make sure that you are the one asking the questions.
Hello Rod. In my experience this is a complex area. One needs to consider the company implications, your personal implications and how the two interact. Otherwise one can get into a spot of bother without realising it. For example your UK company’s ability to employ somebody (you) in France. You’ll be paying tax and social welfare in France but your Company has no legal presence here? If it creates a legal presence to accommodate you will it become liable to French corporate tax? It’s great that it Internet based but where do you bill from? Where are your clients? What are the VAT implications?
Over the years I’ve had my head wrecked (a technical term) often by HR, PWC and KPMG explaining to me why I couldn’t do what seemed to me simple and obvious.
If I was you I’d put together a strawman outlining how you’d like it to work and bounce it off a couple of accountancy firms and see what they say.
Yes if you do things correctly it’s perfectly fine.
You do realise, don’t you, when you say
that if you move to France and work from there, you can’t keep paying tax and NICs in the UK as if you still worked on UK soil. It’s the way you say “it’s just that”, that sounds as if you’re not expecting it to make much difference, whereas in fact changing your country of residence when you work from home makes a lot of difference because it means you leave the tax and social security systems of one country and move into those of another.
If you live and work in France you pay your social security contributions to France, regardless of where your employer is based. If you are an employee of a UK company with no establishment in France, the company registers you with URSSAF, puts you on a contract that complies with French labour law and pays all the appropriate French contributions (which are somewhat higher than UK NICs) through URSSAF. You pay your personal income tax in France, not in the UK. Obviously the company continues to pay corporation tax in the UK. However, if as well as being an employee you are also deemed to have a controlling interest in the company it can get very complicated because France can then take the view that the company is being run from France, and that’s sometimes where the fun starts.
Every situation is different and as Jane and John have both said, you need to apply the rules to your unique and specific situation.
There seems to be very little knowledge in the UK about these issues; this thread for instance is a good illustration of how qualified uk accountants tend to react to this kind of question https://www.accountingweb.co.uk/any-answers/living-in-france-but-ltd-co-registered-in-uk
(The thread also contains a recommendation, it’s an outfit I have heard of and I believe they are well thought of but I have no personal knowledge of them.)
In my last role there was somewhere between 1000 and 1200 staff in my division. In an organisation that size, even with great HR support, strange things popped out of the woodwork. An example was when by accident one day it was discovered that an employee who worked pretty well 100% from home had decamped to France, with his family. I think his wife might have been French. I knew the guy personally and he had a valuable skill set, was a conscientious bloke and was attending all his conference calls etc. Clients loved him. To all intents and purposes where he was located was irrelevant. Of course HR, payroll etc. just wanted him back in Country but in our Company Staff functions were in a support role, not a lead role, even in HR matters. Which IMO is how it should be. Line management needs to run the business not the staff functions. So I called him but it looked as if we’d loose him if we tried to force him to return, So I called in a favour from a French colleague who hired him in France, though they didn’t need his skills, and then I signed a multiyear inter-company agreement with our French entity for his services. On which I paid a 10% service charge. So everybody won a little. All in all that one worked out well though his pension will be a bit complex to sort out. Not my problem anymore
You’re reading a lot into the words I use. I do understand that I’d pay social security contributions in France. As for tax, I’ve had conflicting information, some of which suggests I’d be taxed at source in the UK and then pay any additional taxes in France, and some of which, like your own, states that I’d pay tax in France on my whole income.
The point is, I don’t care. I just want to make sure I’m conforming with the legal requirements and doing the right thing/ticking all of the boxes. The interesting point you make is about controlling interest - I own a 50% share of my company.
I think you can at least see why I want to find a professional company with whom I can discuss my particular, individual situation and find out:
Whether a move to France is feasible, allowing me to continue to work from home for my company as now.
How much tax I’ll pay, and where, and the process I would need to go through both here, with regards to HMRC/PAYE and in France to facilitate the change.
What affect my shareholding has, and the dividend payments I receive. (I’m assuming I’d pay tax on that income in France.
etc. etc.
This forum is really useful for raising further questions - what I’d really like is a company that can help me work through them and identify solutions, if they exist.
Thanks again for all your help and if anyone does know a reputable tax/financial/legal adviser in France, who understands the complexities of a situation like mine, please get in touch.
These are all the questions I want to discuss with an expert but to answer your specific questions:
We bill from the UK. Our clients are all over the world but 85% are in the UK. The company is UK registered so unless the legal standing of the company changed - and I don’t see why it should, but it’s something I’d need to investigate based on comments Anna made - VAT, corporation tax etc. etc. are completely unaffected.
Your final advice is exactly what I intend to do and my original, poorly worded, question was really just seeing if anyone could recommend a company to talk to rather than relying on a blind Google search.
I wish I could recommend a firm Rod. For separation of duties reasons our auditors were PWC and tax advisors KPMG but both could answer your questions, I just think they could be overkill. I guess the trick is finding a small firm with British and French expertise, easy enough for personal taxation but no so easy for company stuff. Could you reach out to any simular companies to your own? Even a competitor. Or is it worth giving KPMG tax department a bell and explaining that you’re not a big corporate and could they suggest a smaller practice that might be a better fit for a minimultinational. I’m out of the game too long now and wouldn’t even know a partner to ring for a steer. I think the strawman is a good place to start and even flash that to them for a bit of free feedback.
I think you’re right but I thought it worth a try in case someone had made a similar move and had a tax/legal company they really rated and trusted. I just want to make sure that we can grab the opportunity that might come and that if we do, we comply with whatever we need to and don’t bend or break any rules. The freedom of movement is perhaps a little bit more complex than I thought. xx
Presumably Rod your company use s outside accountants for audit or accounts prep and\or tax advice. They would be best placed to answer this question or would know a firm with French links.
Most medium sized accountancy firms wil have links or affiliations with overseas firms. Certainly the 3 I worked for did and I would recommend them all. KPMG or any of the big firms would be extortionate for a basic query such as this.
I can point you in a more appropriate direction of you want.
Thanks Mandy. I have a meeting with our accountants next week and thought they’re quite a large firm I don’t think, last time we spoke, they had any strong affiliations with French firms. But I’ll ask again. And by next week, who knows, the political situation might be a tiny bit clearer. xx
They should be your first port of call. If you have no joy then come back to me and I will put you in touch with someone.
I was a tax adviser in a previous life (albeit more than 12 years ago) so I know that this could get complex and you should be considering more than just income tax/social charges - in particular succession planning and capital taxes - so you are right in seeking professional advice. Your residence status will, of course, be key and you need to be absolutely sure that you get that right.
Anyway, I’m waffling now. See what your accountant says and then get back to me if you want.
That’s brilliant Mandy. I’ll let you know how I get on with them next week. It’s great that you understand where I’m coming from. You’re right about succession planning - and to avoid all of that, we did actually make an attempt to sell the business over the last two years, since I know that if it sold whilst we were living in France, there’d be a MUCH higher tax bill - no 10% tax rate there for capital gains for entrepreneurs! But as that failed, the likelihood is that things will continue as now for some considerable time and logistically from the businesses point of view, there’s no reason why they can’t.
It’s that complexity which makes me want to seek professional advice/help and, again, if you do know of anyone you can recommend, I’d be really grateful. x