UK Ltd Company while resident in France

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bluebird
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Re: UK Ltd Company while resident in France

Post by bluebird »

DominicBest wrote:
Tue Sep 03, 2019 11:02 pm
A few years ago there was a big news item in the Limousin about a U.K. removals company who were based in Kent, had U.K. registered trucks and specialised in UK/France work. All seemed to be above board but they also had a French house and they ran an office there using a mobile phone. They were taken to court for running an illegal business and the fine was about €150,000. It goes a lot further than dual tax treaties as the U.K. firm has to pay into the French social security system as well.
Wow. I need to have a rethink. Sounds like HMRC are a bunch of pussy cats compared to french tax authorities.

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Re: UK Ltd Company while resident in France

Post by mysty »

DominicBest wrote:
Tue Sep 03, 2019 11:02 pm
A few years ago there was a big news item in the Limousin about a U.K. removals company who were based in Kent, had U.K. registered trucks and specialised in UK/France work. All seemed to be above board but they also had a French house and they ran an office there using a mobile phone. They were taken to court for running an illegal business and the fine was about €150,000. It goes a lot further than dual tax treaties as the U.K. firm has to pay into the French social security system as well.
Years ago on FE, typhoo used to use a food delivery company based in the UK but they conducted business from their French home in dep 36 via the internet.
Like your story above they got wiped out.
No need to panic bluebird it's different to your situation. 8-)
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Re: UK Ltd Company while resident in France

Post by Le Démerdeur »

If you genuinely are just taking retained profit out of a non trading business as dividends over several tax years whilst writing down assets then I dont see that there is any physical work that you are doing here, I'm sure Nigel Lawson still has a lot of UK directorships, maybe he declares them :lol:

If you declare the income correctly and it does create a French tax liability there will be a credit for any tax paid in the UK, - I think, others will advise, also I think you may possibly have social charges to pay.

In the circumstances you describe I dont think it would be treated any differently than if you had done some contract work in the UK or recieved share income and declared them.

If the company is trading and you are playing an active role either by phone or computer then technically its different, they are unlikely to know or care but if there is any French component to it like the removals or food delivery then you really do need to be above board.
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Re: UK Ltd Company while resident in France

Post by bluebird »

Le Démerdeur wrote:
Tue Sep 03, 2019 11:25 pm
If you genuinely are just taking retained profit out of a non trading business as dividends over several tax years whilst writing down assets then I dont see that there is any physical work that you are doing here, I'm sure Nigel Lawson still has a lot of UK directorships, maybe he declares them :lol:

If you declare the income correctly and it does create a French tax liability there will be a credit for any tax paid in the UK, - I think, others will advise, also I think you may possibly have social charges to pay.

In the circumstances you describe I dont think it would be treated any differently than if you had done some contract work in the UK or recieved share income and declared them.

If the company is trading and you are playing an active role either by phone or computer then technically its different, they are unlikely to know or care but if there is any French component to it like the removals or food delivery then you really do need to be above board.
Thanks. It's just as your suggested example, UK Ltd (service company) that previously did contract / consultancy work in the UK. Only currently drawing UK min wage. So hopefully not too much for French taxman to get his/her teeth into.

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Re: UK Ltd Company while resident in France

Post by Le Démerdeur »

I thnk technically drawing a wage is different to taking a monthly dividend and paying ACT. There is an inference of work being done.

But they would have to find out about it and care, as the contrôleur d'impôts said to me, add a couple of zeros to your figures and I would be all over you, as it is you are not worth bothering with.

If ever you did have to justify where the work was being done for the salary then you could do a Lawson and say that you have to attend a board meeting in the UK once a year which theoretically is true.
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Re: UK Ltd Company while resident in France

Post by AmandaJ »

I think things have changed a bit since ACT :D

As far as I'm aware, directors can either have a contract in which case minimum wage & number of hours worked come in to play, or no contract & no min wage requirement. This might not seem relevant but with no contracted number of hours to be worked Bluebird could be being paid for working no hours & therefore not doing any work from France. You could speak to your UK accountant to check this out. It's a bit late and I haven't checked the details, but this is my recollection relating to directors of their own Ltd co.

Divdends are subject to tax and social charges in France (I think)

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Re: UK Ltd Company while resident in France

Post by DominicBest »

You need to get professional advice as there are so many variables. There must be plenty of accountants out there who can tell you the best way to proceed.

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Re: UK Ltd Company while resident in France

Post by Le Démerdeur »

AmandaJ wrote:
Wed Sep 04, 2019 12:25 am
I think things have changed a bit since ACT :D
Yes I think the world has moved on a bit since I closed my Ltd company :D
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Re: UK Ltd Company while resident in France

Post by niemeyjt »

The "bum on seat" bit was why I asked my initial questions to clarify your status. You never want a working bum on a seat in France!

France has a massive deficit and needs every penny of tax and social charge income it can get (already highest in Europe). You have seen two examples cited above. A third one is Basel Airport which is on French Territory although it has two sectors. Swiss Airlines were told they would have to pay French taxes and social charges on Basel operations - so they shuttered the whole lot and transferred all flights and slots to Zurich. Now when you "fly" from Basel your first leg is actually a train to Zurich airport with a Swiss flight number attached.

Also, colleagues here and previously in Basel often had what is called "Frontalier" status - live in France but work in Switzerland. Only taxes are due in France - social and health all goes to the Swiss. Anyway, they cannot work from French home for more than one day a week - otherwise they get hit by French social charges.

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Re: UK Ltd Company while resident in France

Post by DominicBest »

Don’t try to pretend that Switzerland is a cheap place to live, it’s tax system may appear favourable but the very high cost of living is only countered by sky high salaries. My daughter who is a London lawyer currently on secondment to a Swiss mining company is paid less than the secretaries in the building she works in. She’s not worried as they have provided her with free accommodation and she receives a small cost of living allowance so she’s insulated from the real world costs.

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