Working through UK Ltd, resident in France, client in UK/USA

[PharmaContractor]

Hi All


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.

Situation:

• 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?

TIA!

PC

[Andy Hallett]

The first person I would call if this came across my desk is Sue @ iPaye.

[northernladuk]

After a couple of beers that reads so wrong.

[PharmaContractor]

The first person I would call if this came across my desk is Sue @ iPaye.

Thanks Andy. Looks solely like an umbrella outfit? This probably won't suit him, but I will let him know. I may go into partnership with him in the near future, so would require us to both work through a Ltd I think.

[SueEllen]

Thanks Andy. Looks solely like an umbrella outfit? This probably won't suit him, but I will let him know. I may go into partnership with him in the near future, so would require us to both work through a Ltd I think.

Phone them on Monday and ask. Sue doesn't bite.

[Andy Hallett]

Thanks Andy. Looks solely like an umbrella outfit? This probably won't suit him, but I will let him know. I may go into partnership with him in the near future, so would require us to both work through a Ltd I think.

Their sister company is SPI Accountancy.

[BlasterBates]

Thanks Andy. Looks solely like an umbrella outfit? This probably won't suit him, but I will let him know. I may go into partnership with him in the near future, so would require us to both work through a Ltd I think.

If your partner is working in France he needs to be taxing himself in France. and you need to be taxing yourself in the UK. If you were to work through one company, you would have to tax the French business in France, i.e. the work of your partner and your business in the UK. This is all laid out in the double taxation treaty concerning companies working cross border. A Ltd company can be taxable in multiple locations. It would probably be simpler to have two separate companies.