Living in the UK, working for French companies
Thread poster: MAC_1980

MAC_1980
France
Local time: 13:54
French to English
Jun 7, 2011

Hello,

I am currently living in France, where I work as a freelance translator ('autoentrepreneur').

However, in a couple of months, I am moving back to the UK, where I will be setting up as a sole trader.

Most of the companies/institutions I currently work for are French.

Can anyone offer any advice on payment options for a UK based trader invoicing French clients ?

Specifically :

Should invoices be in GBP or EUR ?<
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Hello,

I am currently living in France, where I work as a freelance translator ('autoentrepreneur').

However, in a couple of months, I am moving back to the UK, where I will be setting up as a sole trader.

Most of the companies/institutions I currently work for are French.

Can anyone offer any advice on payment options for a UK based trader invoicing French clients ?

Specifically :

Should invoices be in GBP or EUR ?
Can I maintain my status of 'autoentrepreneur' in France ?
Can I keep a French bank account open and be paid into that account ?
Do I need to declare income for tax purposes in both countries ?

I realise that these may be quite complicated tax issues, but I would be very grateful for any pointers from anyone has had a similar experience.

Thank you.
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Mary Worby  Identity Verified
United Kingdom
Local time: 12:54
Member
German to English
+ ...
Keep the bank account Jun 7, 2011

I'm no tax expert, but I would advise invoicing in EUR and keeping the French bank account. I live in the UK and work for agencies all over Europe, most of whom are much happier paying into the euro account than a sterling one. Although the transfers to a UK account are technically free, you do take a hit on the exchange rates. With the separate currency accounts, you can move funds around to suit you.

 

Mark Hamlen  Identity Verified
France
Local time: 13:54
French to English
+ ...
Check with tax advisor (both countries) Jun 7, 2011

I suspect keeping a French bank account open and receiving payment in France will make you subject to French taxes. Technically you are being paid in France. Can't you open a euro account in a UK bank? This is a question for a professional.

 

Tom in London
United Kingdom
Local time: 12:54
Member (2008)
Italian to English
Simple, really Jun 7, 2011

MAC_1980 wrote:

...in a couple of months, I am moving back to the UK, where I will be setting up as a sole trader.

Most of the companies/institutions I currently work for are French.

Can anyone offer any advice on payment options for a UK based trader invoicing French clients ?

Specifically :

Should invoices be in GBP or EUR ?
Can I maintain my status of 'autoentrepreneur' in France ?
Can I keep a French bank account open and be paid into that account ?
Do I need to declare income for tax purposes in both countries ?

I realise that these may be quite complicated tax issues, but I would be very grateful for any pointers from anyone has had a similar experience.

Thank you.


Quite simple- MAC. The official expression is that you will be "based in the UK for tax purposes".

Once you have got yourself properly registered (it would be wise to consult an accountant about this to make sure you get the basics right) then you are required to act in accordance with UK tax law, and ONLY UK tax law. The fact that you work for companies in France is irrelevant, because the service you provide to these companies is provided by you in the UK.

Your invoices may be in EUR, GBP, $, or anything else so long as the amounts you actually receive as taxable income (i.e. the amount you actually receive into your bank account in the UK) are recorded as GBP.

I don't think you can ALSO be a self-employed person in France. The bureaucracy would be a nightmare. And for all your income earned as a person based in the UK, all your taxable income must be received into a UK bank (the Tax Inspector requires you to keep all your bank statements so that he can verify your income, if need be).

If you also earn money in France by actually GOING THERE and DOING THE WORK THERE, then so far as the UK tax authorities are concerned that is classified as "Foreign Income" and you must record it on a separate section of your annual Tax Return.

But don't just take the advice of your fellow Prozians: consult a friendly UK accountant.


 

Mary Worby  Identity Verified
United Kingdom
Local time: 12:54
Member
German to English
+ ...
I don't think so Jun 7, 2011

Mark Hamlen wrote:

I suspect keeping a French bank account open and receiving payment in France will make you subject to French taxes. Technically you are being paid in France. Can't you open a euro account in a UK bank? This is a question for a professional.


As I mentioned above, I work in the UK for agencies across Europe. I think the main question is where the work is actually performed and, as such, although my payments are received in Germany, I am a UK tax payer. (I suspect, but do not know, that the system is the same across Europe.)

You can open a euro account with a UK bank but it tends to be more expensive to run.


 

Sheila Wilson  Identity Verified
Spain
Local time: 12:54
Member (2007)
English
+ ...
I second most of what Tom says Jun 7, 2011

Including (and especially) the part where you say not to take our word for any of this advice! However,

Tom in London wrote:
Your invoices may be in EUR, GBP, $, or anything else so long as the amounts you actually receive as taxable income (i.e. the amount you actually receive into your bank account in the UK) are recorded as GBP.


I don't believe they actually have to ever be received into a UK bank. I think it is sufficient to declare (to the UK tax authorities in your case, OP) everything you have earned, expressed as an equivalent GBP value. In other words, if you have received money into a French EUR account, and/or into a USD PayPal account, it all gets taxed in GBP, even if it is never converted and it never arrives on UK soil. Personally, being a French taxpayer, I receive income into a GBP account in the UK and in 3 currencies into my PayPal account, and I convert it all into EUR (using the published exchange rates for that very purpose) so I arrive at one single EUR amount of world income. Money received in the UK and by PayPal rarely arrives in France - I have ways of spending it first!

If you also earn money in France by actually GOING THERE and DOING THE WORK THERE, then so far as the UK tax authorities are concerned that is classified as "Foreign Income" and you must record it on a separate section of your annual Tax Return.


Again, I think that if the income is earned as part of your registered business, then I believe you can go wherever the work takes you. I don't believe that international interpreters have to declare their income in any special way. On the other hand, if you were to accept a salaried post (even temporary) in any other country, then that would have to be declared separately.

That's what I believe to be true, anyway.


 

MAC_1980
France
Local time: 13:54
French to English
TOPIC STARTER
Thank you Jun 7, 2011

Thank you all for your very helpful advice

 

Neil Coffey  Identity Verified
United Kingdom
Local time: 12:54
French to English
+ ...
Different methods Jun 7, 2011

Sheila Wilson wrote:
I don't believe they actually have to ever be received into a UK bank. I think it is sufficient to declare (to the UK tax authorities in your case, OP) everything you have earned,


This my understanding too (not that I'm an account, just from the very minimal reading I've done around the subject). In addition to my UK bank account(s), I have places such as Paypal and an account with Amazon affiliates scheme, receiving different currencies and where the "money" received never actually hits a "bank account".

As I understand, you *could* also do what Tom says and treat the values entering/leaving "the bank account" as the basis for your accounts, provided that's where everything actually is-- this would then be what's called "cash accounting"? As I understand, it's a perfectly valid method, but is obviously more limited as it doesn't cope very well with the situation where (say) you receive some money in USD in Paypal and then use some of that to pay a business expense in EUR directly from your Paypal account.

[Edited at 2011-06-07 19:10 GMT]


 

Mark Hamlen  Identity Verified
France
Local time: 13:54
French to English
+ ...
I see... Jun 7, 2011

I still believe a professional should be asked, especially if you are a French national, because the Fisc is sometimes very un-European in its behaviour. I'd ask a French tax expert as well as a UK tax specialist.

But of course I have a paypal account which is outside all nationalities and I declare income going through it in France. So you can probably have accounts wherever you want, just declare the income in the UK.


 

Michael Wetzel  Identity Verified
Germany
Local time: 13:54
German to English
VAT detail Jun 8, 2011

Hello,

[quote]Tom in London wrote:



Once you have got yourself properly registered (it would be wise to consult an accountant about this to make sure you get the basics right) then you are required to act in accordance with UK tax law, and ONLY UK tax law. The fact that you work for companies in France is irrelevant, because the service you provide to these companies is provided by you in the UK.



Yes and no. The services are provided in the UK for all purposes EXCEPT for those of VAT charged to inner-EU business customers. According to EU regulations, your translation services are provided at the place of business of your CUSTOMER in the case of inner-EU B2B transactions. This does not apply to any customers outside the EU (such as Switzerland or the USA) and it does not apply to inner-EU private customers.

This is all only indirectly relevant for you, but it is very relevant for your business customers, who need a correct invoice in order to get back any VAT that they have reported and paid. A correct invoice refers to the EU directive about "reverse charge" and to the UK law about VAT-exempt businesses being unable to apply for a VAT-number.

I agree with everything else Tom said and, like Sheila, particularly with the advice to get tax advice from a WELL-INFORMED tax consultant and to be skeptical about the accuracy of my information. The relevant regulations are complicated and often very specific in terms of what services they apply to. The UK also has unusual regulations of its own regarding these issues. You need a UK tax consultant who regularly deals with businesses providing inner-EU services, preferably even a few translators.

Sincerely,
Michael


 

Paul Skidmore  Identity Verified
Germany
Local time: 13:54
German to English
Tax is based on where you and your business are located Jun 8, 2011

My understanding is that the question of which country has the jurisdiction to tax your self-employed earnings is based in simple terms on your residence / business location across the whole tax year.

The other questions you ask relate to practical issues. You are in business - it is up to you to decide

(a) on the currency in which you invoice your clients
(b) on the bank account / PayPal account into which you wish to receive payments
(c) on the clients yo
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My understanding is that the question of which country has the jurisdiction to tax your self-employed earnings is based in simple terms on your residence / business location across the whole tax year.

The other questions you ask relate to practical issues. You are in business - it is up to you to decide

(a) on the currency in which you invoice your clients
(b) on the bank account / PayPal account into which you wish to receive payments
(c) on the clients you wish to work for (i.e. whether in France or other countries).

My experience is that once you have opened a bank account in a particular country you are well advised to keep it open (unless the fees are prohibitive) as you may find that once you are no longer resident there it becomes impossible to open a new account.

In any event, as others have said, you should take professional advice from an accountant. The tax year in which you move your business may be a little tricky, but once you are up and running in the UK it should be much more straightforward.

HTH Paul
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Living in the UK, working for French companies

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