Contracting in France

[sam]

I've been (software) contracting in the UK for a while (under IR35) but have recently found a contract in France, and the agent has mentioned that it's possible to keep in excess of 90% of turnover!?

The solution appears to be some sort of trust. Having always just paid my IR35 dues, all of this talk of trusts is new to me. Having looked on ContractorUK, it seems that the use of such trusts is now under scrutiny by the revenue (since 2004). However, if I am non-resident (UK) for a sufficient period, and I pay myself a small nominal wage in France (and the tax) and take the remainder off-shore, is this legal (in both France and the UK)? Are there any other tax-efficient options?

Many thanks.

[The Master]

If it sounds too good to be true...

Your money, your choice, your risk. But remember, the name of the game is providing IT solutions, not pushing the limits of taxation law. You aren't nearly rich enough to do that and survive. Pay your dues, get on with the job in hand and sleep soundly at night.

[Fleetwood]

I have been using a very similar method for several years with no issues.
90% seems high though. I would have thought 80 nearer the mark. I would like to add that I haven't been tax-resident in the UK for over 15 years.

[BlasterBates]

It is unlikely to be an issue in the UK, if anywhere then France (if the contract goes on after 6 months), because you're basically siphoning off money into a trust. This is common in places like Luxembourg, Belgium, and so it seems France. It depends on the tax authorities. In Luxembourg the tax authorities don't seem to bother investigating schemes like they would in the UK. If you want to find out whether it is "really" legal, best to take an advice from a French tax advisor.

Just be aware that from time to time in various countries the tax authorities sometimes clamp down on what everybody is doing, and seems to think is OK.

I only know that in Germany large UK companies gave their employees "tax breaks", for years only to have to pay huge sums, after the tax authorities decided to stamp it out.

If your contract is short term then it can be taxed according to UK rules. However it is simple to hide foreign earnings, so if you do retain 90% it is probably illegal under UK tax rules but difficult for them to find out.

[xchaotic]

I dug that out, seems pretty old.
But I'm investigating a contract in France and I wonder what the options are?
I currently run a Ltd in UK and probably would prefer to run a french gig through it, but I'm open to suggestion and not tied to any solution.
Has anything changed since 2006?

[expat]

I dug that out, seems pretty old.
But I'm investigating a contract in France and I wonder what the options are?
I currently run a Ltd in UK and probably would prefer to run a french gig through it, but I'm open to suggestion and not tied to any solution.
Has anything changed since 2006?

Fleetwood has passed on.

[Cameron Wallace]

Contracting in France

If you're there for less than 183 days you can run it through your UK Ltd Company. Otherwise you'll have to run something out of France. I would agree on the trust stuff, you'd invariably get away with it but is it worth the risk? Full PAYE in France is quite brutal though particularly given the social costs they put on top of the taxes. Have you thought about using the E101 option? Some of those management companies do it. try www.contractortaxation.com