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Resident in UK but tax resident in France - national insurance contributions question
Thread poster: stephenkells
stephenkells
Local time: 22:52
May 8, 2012

Hello,

I recently moved back to the UK from France, where I'd been resident for 5 years. I have only recently realized that I may have to file an income tax return on income earned in France to the French, rather than the British tax authorities, as I'd previously assumed. This also raises the question of National Insurance contributions/contributions to URSSAF (CSG/CRDS) and perhaps other social security contributions. Does anyone have experience of what is expected of them in this field if they are living in the UK but seen as 'tax resident/having their 'domicile fiscal' in France?
Virtually all my customers are French-based.

Thanks for any thoughts on this matter,

Stephen Kells.


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Tom in London
United Kingdom
Local time: 22:52
Member (2008)
Italian to English
HMRC May 8, 2012

stephenkells wrote:

Hello,

I recently moved back to the UK from France, where I'd been resident for 5 years. I have only recently realized that I may have to file an income tax return on income earned in France to the French, rather than the British tax authorities, as I'd previously assumed. This also raises the question of National Insurance contributions/contributions to URSSAF (CSG/CRDS) and perhaps other social security contributions. Does anyone have experience of what is expected of them in this field if they are living in the UK but seen as 'tax resident/having their 'domicile fiscal' in France?
Virtually all my customers are French-based.

Thanks for any thoughts on this matter,

Stephen Kells.


Hi Stephen - from what you say, you are "resident in the UK for tax purposes" (in the definition given by HMRC) and no matter where your clients may be, if you invoice them from the UK you are only liable for UK income tax.

However it sounds to me that to put your mind at rest, you should consult an accountant. If you're based in London I can recommend one. Just email me privately.

Tom


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Decipherit  Identity Verified
United Kingdom
Local time: 22:52
Portuguese to English
+ ...
You are tax resident in the UK May 8, 2012

If the reason for the confusion is the fact that your clients are in France then don't be confused. Your clients could be on the moon but you would still be tax-resident in the UK. You need to close your account with URSSAF, which can take a long time (they need notice), also notify your caisse de maladie/retraite etc as soon as possible and register as self-employed in the UK.

If by 'recently' you mean this year you will still need to fill in a tax declaration form in France for 2012 but you only declare your income up to the time you left.

[Edited at 2012-05-08 13:48 GMT]


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stephenkells
Local time: 22:52
TOPIC STARTER
tax residency May 8, 2012

Thanks for your reply Lisa,

However, the French tax authorities seem very sure that I am in fact resident for tax purposes there, irrespective of where I live. The only person I have spoken to at HMRC about this agrees with them! I think I'm going to have to take professional advice on the issue.

Thanks again,

Stephen.


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Sheila Wilson  Identity Verified
Spain
Local time: 22:52
Member (2007)
English
+ ...
Where was the company that generated the income based for tax? May 8, 2012

stephenkells wrote:
I may have to file an income tax return on income earned in France to the French, rather than the British tax authorities, as I'd previously assumed. This also raises the question of National Insurance contributions/contributions to URSSAF (CSG/CRDS) and perhaps other social security contributions. Does anyone have experience of what is expected of them in this field if they are living in the UK but seen as 'tax resident/having their 'domicile fiscal' in France?


I imagine you are talking about money earned while you were working under the French tax system i.e. you were employed with a French "contrat de travail" or you were a self-employed auto-entrepreneur or something similar. In other words, a French structure. If this is the case, then I would imagine that all your income must be taxed in France (plus the SS charges etc) even if you aren't physically living there.

Once you set up a British structure, then you will automatically become domiciled in the UK for tax purposes and you'll pay tax to the UK. I don't think a freelancer can be registered in two countries although you can have limited companies in other countries (don't know how that works). Your tax office(s) can advise on avoiding paying two lots of tax on the same income.

Where your clients are is not in any way important, that's for sure. And where you are physically living doesn't matter either, unless you spend more than the magic 183 days away from your tax domicile.

At least, that's how I see it. I hope I haven't got it too wrong as I'm relocating to the Canaries the day after tomorrow!

Sheila


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stephenkells
Local time: 22:52
TOPIC STARTER
reply to last comment May 8, 2012

Hello Sheila,

I was classed as profession libérale, micro entreprise, BNC. Auto-entrepreneur did not exist when I started in France.
Have a look at this link: http://www.impots.gouv.fr/portal/deploiement/p1/fichedescriptiveformulaire_6827/fichedescriptiveformulaire_6827.pdf

best regards,

Stephen Kells.


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Decipherit  Identity Verified
United Kingdom
Local time: 22:52
Portuguese to English
+ ...
Baffled May 8, 2012

I am indeed confused. I lived in France for 10 years and about 85% of my clients were outside France. I was tax-resident in France and paid all taxes and contributions in France. I recently moved to the UK and that same 85% is outside the UK as well. I signed off from all authorities in France, paid the last bills, filled in my last tax return and am now tax-resident in the U.K. Didn't encounter any problems or conflicting advice at all. On what grounds are they telling you that you are tax-resident in France? If it is for income earned while you were living there then that is correct but not for anything that you earn now you are in the UK.

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stephenkells
Local time: 22:52
TOPIC STARTER
response to sheila May 8, 2012

No, it's precisely that, income earned now, while I am resident in the UK. If you look at the top of the form to which I supplied the link, it seems quite clear that in the French tax authorities mind, that income is to be declared to them...

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Decipherit  Identity Verified
United Kingdom
Local time: 22:52
Portuguese to English
+ ...
Exactly the same May 8, 2012

stephenkells wrote:

Hello Sheila,

I was classed as profession libérale, micro entreprise, BNC. Auto-entrepreneur did not exist when I started in France.


Exactly what I was, a micro-BNC, never bothered to switch over to auto-entrepreneur. No idea what the issue is. My husband was also self-employed, classed as an artist and paid his 'cotisations' to Agessa. He had more French clients (as we've established that makes no difference though). Also no problem at all shutting up shop there and switching over here.

[Edited at 2012-05-08 15:46 GMT]


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Decipherit  Identity Verified
United Kingdom
Local time: 22:52
Portuguese to English
+ ...
I've glanced through the form May 8, 2012

Odd that nobody ever mentioned this to us, not even the tax and accountancy firm that did our tax returns. I would seek professional advice on this one.

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Sheila Wilson  Identity Verified
Spain
Local time: 22:52
Member (2007)
English
+ ...
"source française" May 8, 2012

That form refers to income from your BNC, even if you were by that time living in the UK. So, say you leave France in March but continue issuing invoices with your French SIRET no. on until June, when you close down your BNC and set up as a freelancer in the UK. Those invoices in March to June are taxable in France.

Sheila


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Charlie Bavington  Identity Verified
Local time: 22:52
French to English
On what grounds? May 9, 2012

stephenkells wrote:
... the French tax authorities seem very sure that I am in fact resident for tax purposes there, irrespective of where I live.


They must have a reason for believing this, and that must be based on what you have or haven't told them. If you tell HMRC that you're resident in France for tax purposes, they are almost certain to agree (double taxation treaties and all that); however that does not necessarily mean you don't have to declare your earnings to them, if you're living here. (They like to check.)

Like Lisa, my own situation was straightforward. I told everyone I was leaving France and I left. I invoiced on the last day (or close to it) and all that money was taxed etc. in France for the financial year in question, and I started again in the UK. I made a definite decision, no matter what my plans were, to tell the French I was leaving for ever and to tell the Inland Revenue I was coming back permanently. IIRC, both countries' forms had options to say my move was temporary - did you do that, by any chance?

That said, CIPAV in particular were reluctant to let me go. They kept billing me (in the UK!) and I kept saying "I've left, I owe you nothing". I seem to recall getting a form from the DGI as well, for my income for the following year (I peppered it with zeroes and haven't heard from them again). Remember a) the gears of Fr admin grind exceedingly slow, and b) these are just ordinary people doing a 9-5 and they don't know everything, and c) French office culture dictates that no-one ever says "I don't know, I'll check" so they are happy to make stuff up on the spot.

Basically, assuming your situation is straightforward (you're not flitting from country to country, you're not maintaining an address in both countries), I took the view that I would decide where I was resident and I told them. I didn't let them decide for me. If your situation is not straightforward, then that might explain it, and I'm out of my depth for advice in those circs.


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Decipherit  Identity Verified
United Kingdom
Local time: 22:52
Portuguese to English
+ ...
@ Charlie May 9, 2012

I agree with everything you have said. However, when I looked at the link to the form the OP has posted I have to say I was surprised. I'd never heard of it before and, as I say, our accountant never mentioned it either when he came to doing our final tax return. It smacks of a last-ditched attempt to claw back every last penny, but if HMRC are in agreement? Anyway, my advice is the same as Charlie's, no grey areas, be absolutely firm and clear on the fact that you have moved and have no address in France. My problem wasn't with CIPAV but with URSSAF who kept on thinking up 'one last payment'. They needed an inordinate amount of notice to be told to close the account and their admin was (unsurprisingly) utterly chaotic.

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Charlie Bavington  Identity Verified
Local time: 22:52
French to English
Me neither May 9, 2012

Lisa Simpson, MCIL wrote:

I agree with everything you have said. However, when I looked at the link to the form the OP has posted I have to say I was surprised.


Just looked in my files, and I didn't get one (however just found the notice to pay the payment on account for the year after I left, despite.... having left!). Perhaps it's a relatively new one. I daresay that Sheila's idea could apply here (although as I say, I kept things simple, and did all my invoicing before I left), also income streams that continue after departure (e.g. rental income, interest & dividends) or indeed non-recurring items (selling stuff, for example). The form seems to cover everyone. It seems plausible that they send it to everyone who leaves the country, including French people emigrating as well as ex-pats returning whence they came.

Remember kids, just because you are sent a form, it doesn't mean it actually applies to you and that you have to fill it in


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Decipherit  Identity Verified
United Kingdom
Local time: 22:52
Portuguese to English
+ ...
Dates back to before I left May 9, 2012

I'm also French (dual nationality) and still didn't get it. I invoiced everything up to the last job prior to leaving and that was that. Perhaps the fact that I left in the autumn and therefore towards the end of the tax year made a difference - maybe they just couldn't be bothered.

[Edited at 2012-05-09 09:06 GMT]


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