I have a friend that is in a bit of a pickle. He's on a very decent rate, but has been 'advised' all sorts of 'advice' from his French accountant.
- UK national, resident in France (lived there for a few years now).
- Client is American company, invoices UK client's office (via their agency).
- Operates via UK Registered Ltd
- Is 100% homebased in France where all work is done
- Liable for UK corporation but as all work is done in France, no corp tax due in Uk
- Pays income tax in France as that is where the work takes place
- Pays social security in France
He's facing looking at 33% French corp tax. But now they want another 30% withholding tax if he cannot get confirmation from HMRC to confirm in writing that he is not liable for UK Corp tax and that they recognise French tax articles bla bla bla. I don't ever see HMRC signing anything, let alone confirm that they recognise some particular French tax legislation that is totally outside of their jurisdiction. We're not talking double taxation here either. In any case it all sounds like a right pisser. He's got a UK and French accountant, but the one that he needs most (French one) seems to be clueless. It makes no sense to me either. His wife is French, so not a case that it's just a case of an inept Brit abroad with no knowledge of the language.
Apparently after the frogs get their hands on his Ltd turnover, he;ll be lucky to 'takehome 25-30%. Something's clearly not right!
Now only reason he went set up a UK Ltd was since the inept agency did not want to be dealing with a French Ltd.
So, just wondering whether anyone here is in a similar situation as he is (Living in France with a UK Ltd, serving UK clients, paying most dues in france)? I've advised him to get another French accountant for a start. And maybe look for an international tax advisor who has experience with French-UK tax. Any recommendations anyone?