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Moving to France

Moving to France

Old Sep 5th 2020, 6:08 am
  #1  
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Default Moving to France

Hello everyone,

I have just moved to France after being a resident in the UK for the last 7 years. I am from Switzerland originally. I am co-director of a Limited company in the UK and I am still working for my company but remotely in France. My husband is in the same situation. We both won't spend time working in the UK as we both have our company's partner running the business from over there.
I am worried about making sure I'm paying my tax correctly and in the right country but I haven't figure out how to proceed with my situation.
I have my daughter with me and can claim for french benefits such as help for the nursery.
I assume I should pay tax in France but under what status?
Hoping someone could have helpful answers ( without giving you a headache) as so far I'm just lost in the french administration maze.
Looking forward to hearing from you,
Many Thanks,
Chloé
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Old Sep 5th 2020, 6:59 am
  #2  
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Default Re: Moving to France

Originally Posted by ctt View Post
Hello everyone,

I have just moved to France after being a resident in the UK for the last 7 years. I am from Switzerland originally. I am co-director of a Limited company in the UK and I am still working for my company but remotely in France. My husband is in the same situation. We both won't spend time working in the UK as we both have our company's partner running the business from over there.
I am worried about making sure I'm paying my tax correctly and in the right country but I haven't figure out how to proceed with my situation.
I have my daughter with me and can claim for french benefits such as help for the nursery.
I assume I should pay tax in France but under what status?
Hoping someone could have helpful answers ( without giving you a headache) as so far I'm just lost in the french administration maze.
Looking forward to hearing from you,
Many Thanks,
Chloé
Hi, and welcome to the forum!
Post again in the France forum above, and we'll try to advise on your employment statuses. Either your company can accept the hassle (and costs) of "posting" you both, or you must set up a French business structure which would bill your UK company for work carried out in France, bearing in mind that the simplest Micro-Entreprise wouldn't be possible, for several reasons.
Please don't confuse Income Tax and Social Security Contributions, which are completely different!
French "single-child" benefits depend on your joint income which sounds as though it exceeds the limit. (Benefits not based on income are available for 2 or more children, or for single-parent families, etc..). You should book a crêche ASAP, or, if your daughter is over 2 and "clean", she could start Maternelle which would be free.
Anyway, with all the above in mind (sorry to have been carried away...), post again in the France forum!
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Old Sep 5th 2020, 7:23 am
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Default Re: Moving to France

I have moved the thread so you do not need to repost it.

Rosemary
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Old Sep 5th 2020, 8:20 am
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Default Re: Moving to France

Welcome to the forum!
You may find it of interest to scan through the 'Moving to France' FAQ especially the 'Starting a Business' thread. It's not been updated for some time so bear that in mind. Link HERE. Most of the included links appear to be still active, but my secure web browser just threw up a 'Warning: Potential Security Risk Ahead' on one link, so proceed with caution/ensure you have current anti-virus/malware software. (I'm on a very secure Mac so no problem).
Good luck in your venture, it doesn't sound particularly straight-forward admin wise. But what is in France?
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Old Sep 5th 2020, 8:26 am
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Default Re: Moving to France

Originally Posted by ctt View Post
Hello everyone,

I have just moved to France after being a resident in the UK for the last 7 years. I am from Switzerland originally. I am co-director of a Limited company in the UK and I am still working for my company but remotely in France. My husband is in the same situation. We both won't spend time working in the UK as we both have our company's partner running the business from over there.
I am worried about making sure I'm paying my tax correctly and in the right country but I haven't figure out how to proceed with my situation.
I have my daughter with me and can claim for french benefits such as help for the nursery.
I assume I should pay tax in France but under what status?
Hoping someone could have helpful answers ( without giving you a headache) as so far I'm just lost in the french administration maze.
Looking forward to hearing from you,
Many Thanks,
Chloé
Hi Chloe
You need to get this right.
As dmu says you potentially have 2 options - either set up a French company, or register your UK company as an employer in France and yourselves as employees.
However, depending on the business model of the UK company the second option may not be open to you. It would depend on how firmly established in the UK the company is, where most of its turover arises, where its stock is kept, where the majority of its employees are, etc. You should read relevant sections of the France-UK tax treaty which is easy to find online.

If setting up a French business structure is your preferred or only option, I suggest you contact your nearest Chambre de Commerce for advice.

If after reading the tax convention you are sure that you can continue to operate through a UK company structure, this guide will help
https://www.cnfe-urssaf.eu/images/pd...FE-UK-2017.pdf

A warning - I used to work for a UK company that had been advised by its accountants that it could operate in France without setting up a French structure. It genuinely believed it was doing everything correctly. In 2018 the French tax office suddenly pounced on it, and it transpired that it had in fact been under investigation for tax and social security fraud for over 5 years without being aware of it. So the moral is, get it right from the start!
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Old Sep 5th 2020, 9:08 am
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Default Re: Moving to France

Originally Posted by EuroTrash View Post
Hi Chloe
You need to get this right.
As dmu says you potentially have 2 options - either set up a French company, or register your UK company as an employer in France and yourselves as employees.
However, depending on the business model of the UK company the second option may not be open to you. It would depend on how firmly established in the UK the company is, where most of its turover arises, where its stock is kept, where the majority of its employees are, etc. You should read relevant sections of the France-UK tax treaty which is easy to find online.

If setting up a French business structure is your preferred or only option, I suggest you contact your nearest Chambre de Commerce for advice.

If after reading the tax convention you are sure that you can continue to operate through a UK company structure, this guide will help
https://www.cnfe-urssaf.eu/images/pd...FE-UK-2017.pdf

A warning - I used to work for a UK company that had been advised by its accountants that it could operate in France without setting up a French structure. It genuinely believed it was doing everything correctly. In 2018 the French tax office suddenly pounced on it, and it transpired that it had in fact been under investigation for tax and social security fraud for over 5 years without being aware of it. So the moral is, get it right from the start!
I was going to suggest taking a look at #20 in the FAQs above, but it turns out to be the same link as above! It dates back to 2017, but I wouldn't expect much to have changed since....

As said, if the OPs opt for a French business structure, they should contact their regional CCI for free advice, and/or a French Expert-Comptable who could advise on all legal/social/fiscal/administrative issues when setting it up, and continue to deal with it all in the future.... A professional would be advisable, as they are always up to date with S.S. percentages, etc... and "laymen" would spend too much time dealing with Bureaucracy (and maybe not correctly) when they could be spending it earning money....
Good luck to the OPs!!
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Old Sep 6th 2020, 7:28 am
  #7  
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Default Re: Moving to France

Originally Posted by Rosemary View Post
I have moved the thread so you do not need to repost it.

Rosemary
Thank you so much!
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Old Sep 6th 2020, 8:05 pm
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Default Re: Moving to France

Thank you very much!
I will look into this!
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Old Sep 8th 2020, 9:24 am
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Default Re: Moving to France

Can I piggy-back on this query, about correct tax procedure when moving over to France?
My wife and I have had a self-employed partnership as designers for years in the UK, doing business for clients both in the UK, but also in France, USA and Belgium.
All foreign earnings have been properly declared in our annual tax forms.
Being of a ripe old age, we also receive UK pensions, but we will be working on for a few more years.
We have just moved over to France permanently (before the Brexit deadline, and we have our S1 forms ready for applying for our Carte Vitale etc).
We wonder what our position should be regarding French taxes.
1. Do we move our partnership over to France completely, and set up a Micro-business here? Our turnover is not huge.
2. Do we keep the business going as a UK partnership, but split the French side into a separate Micro-business?
3. Can we keep on working as a UK Partnership, while continuing to be residing in France? Presumably, we could then fill in our UK tax returns as normal, but also fill in a French tax return with all the UK information included. I doubt this is a reality, but worth asking the question.
I'm not sure what the consequences of self-employment, just as a designer, is here in France, since we only use computers at home (no office) for our work.
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Old Sep 8th 2020, 3:10 pm
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Default Re: Moving to France

Hello Xendo
I think the first thing you need to decide is, have you moved to France as retirees or as worker? You can't be both.
You need to be clear what your status is first, and then everything will fall into place.
If you're retired, the S1 is the correct route to healthcare (because the UK will be responsible for your healthcare in retirement if that's the last EU state in which you worked).
If you're going to work in France, the S1 is not the correct route to healthcare because you'll be paying social security contributions in France and that will give you your entitlement to healthcare. he UK will not be responsible for your healthcare.

Once you've done the sums and worked out how much the two of you would pay in social security contributions, you may decide it's not worth working. But assuming you decide to carry on:

1. If by "micro-business" you mean "micro entreprise" - this is basically a sole trader setup, it's not ideal for 2 people working together. Possible, but a bit complicated and there are probably better options.
2. As above re the "micro-business". I don't know why you'd want to complicated things by having a business both sides the Channel, particularly with the Brexit mess about to happen. But if you really want to, I guess it would be possible. Ask a good accountant.
3. No, you can't do that. It would mean that you were working unregistered in France, ie on the black, and would be classed as social security fraud.

Rule of bum - you're classed as working in the country where your bum is where you do the work. If your bum is on a chair in front of a computer in France, you are working in France, hence you normally need to be paying social security contributions and income tax and business tax here.


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Old Sep 8th 2020, 3:37 pm
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Default Re: Moving to France

Originally Posted by EuroTrash View Post
Hello Xendo
I think the first thing you need to decide is, have you moved to France as retirees or as worker? You can't be both.
You need to be clear what your status is first, and then everything will fall into place.
If you're retired, the S1 is the correct route to healthcare (because the UK will be responsible for your healthcare in retirement if that's the last EU state in which you worked).
If you're going to work in France, the S1 is not the correct route to healthcare because you'll be paying social security contributions in France and that will give you your entitlement to healthcare. he UK will not be responsible for your healthcare.

Once you've done the sums and worked out how much the two of you would pay in social security contributions, you may decide it's not worth working. But assuming you decide to carry on:

1. If by "micro-business" you mean "micro entreprise" - this is basically a sole trader setup, it's not ideal for 2 people working together. Possible, but a bit complicated and there are probably better options.
2. As above re the "micro-business". I don't know why you'd want to complicated things by having a business both sides the Channel, particularly with the Brexit mess about to happen. But if you really want to, I guess it would be possible. Ask a good accountant.
3. No, you can't do that. It would mean that you were working unregistered in France, ie on the black, and would be classed as social security fraud.

Rule of bum - you're classed as working in the country where your bum is where you do the work. If your bum is on a chair in front of a computer in France, you are working in France, hence you normally need to be paying social security contributions and income tax and business tax here.
Thanks, Euro Trash, for your very informative reply. I always thought it was like falling between two stools, working and receiving a pension at the same time.
We have work obligations, for many of our clients, to continue for a couple of years, but it would be tricky for them, if we were suddenly to change our partnership to a brand new French company. I didn't know about the S1 being invalid, if we work here. Can we can still get a Carte Vitale, after staying here for 3 months, if we set up a new venture here? If this is so, we obviously need to get to a Chambre de Commerce asap, so that we can be registered. We are making contact with an accountancy firm here in France, as well as an financial adviser. In order to satisfy everyone, it might be best to keep a business each side of the channel, with one of us working a micro-entreprise over here, just for the French/Belgian clients. It looks as if it's going to be a fun few months, not to mention the free-for-all bun-fest of Brits registering to residency in October!

Last edited by Xendo; Sep 8th 2020 at 3:52 pm.
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Old Sep 8th 2020, 4:56 pm
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Default Re: Moving to France

As said. If you work in France, no matter what structure you use, you will pay social security contributions on your business income (rates are significantly higher than in the UK, it depends a bit what business structure you choose but if you work on deducting 40% of profit you shouldn't get any nasty surprises). Your cotisations entitle you to healthcare/carte vitale among other things. Workers don't have to wait three months, they're covered as soon as they're on record as starting work. The three month wait is solely for inactives.

Your suggestion of one of you continuing to keep the UK business going whilst supposedly living in France seems fraught with difficulty to me. That person would have to be sure they worked exclusively on UK soil, never in France, otherwise they'd be violating the rule of bum. Then it would make their status in France rather complicated. The correct status for a person who lives in one EU state and works in another is "cross border worker" or "frontalier" but to qualify for that they need to work pretty much full time in the UK and return to France once a week. If HMRC agree to that pattern of working, the person will continue paying NICs and tax in the UK, and HMRC will issue a worker's S1 to cover their healthcare in France (obviously the UK is responsible for that person's healthcare since they're working in the UK and paying NICs).
Failing that, living in France and working occasionally in the UK, isn't really a correct way of exercising freedom of movement so I'm not sure how that person would qualify for an article 50 carte de séjour or for healthcare in France. I know the UK's left hands don't always know what their right hands are doing but I can't quite wrap my head round DWP knowingly issuing them with a pensioner's S1 on the basis that they're retired and living in France, and HMRC continuing to collect tax and NICs on the basis that they're still working in the UK.

I think you need to think this through carefully before you make any decisions because there are various aspects that you need to sort out to make sure that a) you're not infringing French or UK law and b) you're achieving what you want to achieve and c) you're not going to wind up paying out so much in cotisations, social charges, income tax etc that you're working for no profit. Income tax also risks becoming complicated if one you is tax resident in the UK and one is tax resident in France, because in France married couples normally make a joint income declaration and are taxed as a couple. Are you sure it wouldn't be simpler to delay the move until you're ready to stop work? Yes there will be a small bit of hassle in getting visas - but it sounds as if you're trying to rush into moving to France before you're really in a position to make a clean break with the UK. It's really not that hard for retired third country nationals to move to France as long as they have average decent pensions. I suspect that one way and another, trying to move during transition just for the sake of it, but keep a foot each side after Brexit is going to end up more hassle than it's worth. However it's your decision.
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Old Sep 8th 2020, 6:49 pm
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Default Re: Moving to France

Once again, thanks for your comprehensive advice on the matter. Lots to think about.
I will now get a full low-down from a financial adviser, to weigh up the options completely.
I don't think we are going to move back to the UK, now that we are here, so we will work out which direcction is the most worth while.
Thanks again to everyone on this forum, who give very decent information, based on real life experience, and apologies to ctt for hijacking this post.
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Old Sep 9th 2020, 8:21 am
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Default Re: Moving to France

ET (and DMU) continue to give excellent detailed advise on this forum and have to be admired for that. Long may it continue.
Now I have a question for them that I've been unable to get a clear picture on........
How does a benevolent individual who assists others with day-to-day tasks, answering queries on the telephone, doing a few household repairs etc for no monetary reward - stand viz a viz French legislation, especially if that individual is not connected with any official French goodwill organisation.
Apologies for piggy-backing the query on this thread, but ultimately it could be of interest for retirees to France, who don't just wish to sit on the patio in a hammock sipping Pimms, but want to remain 'active' helping others in a number of ways, for no monetary reward.

Last edited by Tweedpipe; Sep 9th 2020 at 8:25 am.
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Old Sep 9th 2020, 8:46 am
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Default Re: Moving to France

Dear community,
Thank you very much for all the input and advice, it is so helpful.
Dear Xendo,
I am speaking with my accountant about all this if I get any help and clarification I'll make sure to let you know.

Once I've worked this out I will post a message to let you all know.
Again thank you all and if you have any other info please pass it on!

Warm Regards,
Chloe
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