Reply to: UK/France

[SueEllen]

I know people working in IT for a UK company (branch, but separate legal entity) based in EU and them being seconded here for years to do work in the UK office.

They are on the EU country's salary + their expenses in the UK are paid 100% (accommodation and travel) + get £30 per day allowance on which they don't pay any tax anywhere.

The only tax they pay is in EU country, not the UK. So if it is doable for 5-6-7 people, it will work for one man show.

Are you deliberately being thick?

Each country even in the EU has their own tax regulations. They therefore have different laws on what a company consists of so while it may be fine to do that in the UK it isn't in Nordic countries.

[kolata]

I know people working in IT for a UK company (branch, but separate legal entity) based in EU and them being seconded here for years to do work in the UK office.

They are on the EU country's salary + their expenses in the UK are paid 100% (accommodation and travel) + get £30 per day allowance on which they don't pay any tax anywhere.

The only tax they pay is in EU country, not the UK. So if it is doable for 5-6-7 people, it will work for one man show.

[SueEllen]

At what point exactly does one change into the other; legally and in terms of taxation?

When you have sufficient bodies so the director(s) can be all be working in one country and the employee is working in another.

However some European countries insist that employees sent to work in their country pay local tax on their earnings in that role from day 1.

Free movement of people doesn't mean you don't abide by local tax laws.

[vlc]

Consultancy (IBM, Accenture etc) is not the same as contracting (one man company). Big difference between a huge BIGCO sending one person abroad out of thousands of employees as against ONEMANCO sending himself and effectively the whole shooting match abroad.

At what point exactly does one change into the other; legally and in terms of taxation?

[stek]

Sure, but that does not mean the consultancy fee can't be paid to the France-based company. After running costs etc., that company would presumably pay him a salary. He would then be potentially liable to pay personal income tax in the on that salary, in the UK if the work is long enough, otherwise in France. But remember that the contract is to pay the company not the person (who is actually an employee of the company).

Consultancy (IBM, Accenture etc) is not the same as contracting (one man company). Big difference between a huge BIGCO sending one person abroad out of thousands of employees as against ONEMANCO sending himself and effectively the whole shooting match abroad.

[vlc]

Tax is due where the work is done. Simple as.

Sure, but that does not mean the consultancy fee can't be paid to the France-based company. After running costs etc., that company would presumably pay him a salary. He would then be potentially liable to pay personal income tax in the on that salary, in the UK if the work is long enough, otherwise in France. But remember that the contract is to pay the company not the person (who is actually an employee of the company).

[Fred Bloggs]

He will be UK resident for tax which he must pay. He will then be credited for his UK tax paid when his income is assessed for tax in France.

[NotAllThere]

AIUI, if the Frenchman takes all the money without paying tax, the consultancy will be liable.

[Jessica@WhiteFieldTax]

I would want to be looking at the Offshore Intermediaries rules in some detail. The French workers personal company could be such an intermediary, and if the uk consultancy was deemed an agency then problems could arise.

Needs picking through in a factual basis, and appropriate indemnities in place.

[stek]

Makes no different to the personal situation. The company situation is where it perhaps gets a little murky; check out Apple and their ability not to be tax resident anywhere.

I'm in Denmark and taxed here, from day one. As far as I know in EU only Sweden gives you the 183 days as a one man company

I did a lot of research on this!!!

[VectraMan]

are you sure?
Surely it would be the opposite of this https://www.gov.uk/tax-foreign-income/overview

as for where he's domiciled that assumes he's an employee rather than a LTD company contractor. And it now starts to get murky if employment status in UK and French law becomes a factor.
But as you say, it's his problem anyway.

Makes no different to the personal situation. The company situation is where it perhaps gets a little murky; check out Apple and their ability not to be tax resident anywhere.

[Lance]

If he's working in London he should be paying UK tax, both personally and for his Ltd. company (I assume that's the case for a French company).

are you sure?
Surely it would be the opposite of this https://www.gov.uk/tax-foreign-income/overview

as for where he's domiciled that assumes he's an employee rather than a LTD company contractor. And it now starts to get murky if employment status in UK and French law becomes a factor.
But as you say, it's his problem anyway.

[stek]

Tax is due where the work is done. Simple as.

[VectraMan]

If he's working in London he should be paying UK tax, both personally and for his Ltd. company (I assume that's the case for a French company).

But that's his problem.

[Invisiblehand]

Yes it's OK.
Tax implications will be for the French chap to deal with so no issue for the consultancy. Although French tax for contractors is quite a lot more than UK so it seems odd (but that's not your question).
Yes it's legit (until we Brexit then who knows)

What the consultancy might want to be concerned with is paying in Euros as the rate may vary. Although with the £ being so low it's probably a good thing.

IANAL and I certainly can't comment on how this sits with French law. But for UK it's fine as you're just buying a service from another EU country.

Cheers Lance.