I’m in the process of setting up a micro enterprise (service a la personne) and will erect to pay income tax & social charges monthly. Thereafter, I understand i need to complete the annual tax return to verify this modest income (form 2042 and form 2042 CK Pro? ). My question is, when remaining UK tax residence, how do you actually fill in the form 2042 as it asks for income from other areas i.e. in my case, UK income. Do I put this UK income down or is the whole form blank other than personal details and the French income from the micro enterprise ? Probably a stupid question but I can’t find a straight answer anywhere.
I am wondering… can you go and discuss this situation with your local French Tax Office …??? They would far rather answer questions, than have things go wrong…
Just had a thought. France asks for Declaration of World Wide Income … which means every income from whatever source… even if that income does not arrive (hit your Bank)… in France.
For your first Annual Declaration… you will have to visit the Tax folk anyway and make a paper declaration. So it would be in order to put your details together and go and speak with them now… clear the air so to speak… then you will know what to do and how to do it when the time comes…
As said, it’s always best to ask at the tax office because everyone’s circumstances are different. Be prepared to firmly state your case for being non resident and the ME being a purely ancillary activity. It certainly is possible for a non resident to set up an ME but in practice I suspect it’s fairly uncommon for non French nationals to do it. Paying such a big chunk of your profits in cotisations for which as a non French person you would get nothing in return, would make it less attractive. In the past there have been better ways for a Brit to carry out an occasional activity in France, for instance if the activity in France is related to a self-employed business activity carried out in the UK you can “post” yourself to France for short periods under a workers S1 and no French cotisations and in some cases no French taxes to pay, though going forward that likely won’t be an option any more.
On that note, I trust you have an EU passport, since after Brexit a UK passport won’t give you the automatic right to work or run a business in France.
It seems a confusing approach. I assume you mean you’re living outside France for most of the year - or have a strong argument why your not a French resident.
If you are not a resident then you can trade in France as a UK Ltd Company - UK Self Employed - just declared properly in the UK - in that case there’s no French tax declaration. As a none resident there’s no issue with working in a second EU state - its once you become a resident the tax stuff kicks in.
Alternatively you are a French resident but with interests back in the UK - then you do a French tax thing. You may have to continue with UK tax declarations if you have a company or whatever there. You can do multiple tax returns - I’m French resident (French tax declaration) - work overseas for a UK company paid in the UK (UK tax declaration) - you just fill the right boxes in and you declare UK income on the French return. As a resident an ME makes sense for work conducted in France. In that case both UK Gross Earnings and tax paid go on the French form
There’s no advantage if you’re not resident to having an ME - you’re both simpler and cheaper to trade as UK entity - you’re not a builder so the 10 year insurance bit isn’t a factor either. Don’t enter second tax/social systems if you don’t have to
In the mess that is Brexit - who knows. Tax treaties remain - but freedom of movement is the bit that could change drastically. It’s simply a question of whether it suddenly needs work visas for work in the EU under a UK “entity”.
