The scheme sounds dodgy. I would take some advice from a reputable French accountant.
The trouble is UK accountants don't know the system or how the French would interpret their regulations.
Tax rules are written in such a way that is sometimes possible to interpret one way or the other. The problem is if a few years down the line a French tax official decides you should have been paying tax in France when you payed it in the UK, you have a big problem.
In Belgium for example contractors were avoiding Belgium tax by paying themselves small salaries, and paying into trust funds r something and everyone thought this was legitimate, suddenly the Belgian authorities clamped down on it and a lot of contractors had a big problem.
Similar things have happened in Germany.
The safest way is to tax yourself in France from the beginning. You will then have no issues because the UK authorities will always recognise tax paid in France. The only thing is that in France you pay wopping amounts of social security. You may be able to legitimately continue paying social security into the UK system, which is a lot cheaper.
Take advice in France from some reputable accountant, who has French French contractors on his books and knows how it works.
I presume because contracting in France is underdeveloped contractors are not a target. This how it was for a while in the Netherlands or Belgium. Once you have thousands of contractors it becomes worthwhile for tax authorities to look a lot more closely at how their rules are being interpreted.
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Unfortunately its one of those areas which is surprisingly fluid.
I've had clients contracting in France, and remaining in the UK system for several years - legitimately. Some aren't so lucky. It depends how much in the way of roots you put down, and how you interpret the relevant Double Tax Treaty - although there is a element of inter EU harmonisation on VAT and NI, Income Tax is not really integrated.
If possible I try and encourage people to stay in the UK system - overall rates aren't too bad, and at least its a language and system you know.
However a lot will depend on your client and agent - they may want to steer you towards a managed service of some sort and / or local registration. All I'd say there is check their motives, agent especially, sometimes they are making a largish cut on the referral.Leave a comment:
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Although these are in the business forums there might be something useful...
france site:http://forums.contractoruk.com/accounting-legal - Google SearchLeave a comment:
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Brit contracting in France - need advice!
I was approached by a recruitment consultant, and have been offered a long term contract in France (thinking a year or so). First 4 months commute for half the week then probably move over for a while.
1) From my research so far, I can not continue to be paid into my UK Ltd company for that work? Although I'm not sure if I can be paid to the UK company for the 4 months I'm commuting there?
2) The recruitment consultant has recommended ITECS or Access Financial. When I spoke with them I have to admit it sounded extremely dodgy! I'd be employed by a bulgarian company, part owned by a Brussels company, that pays into a Canadian bank trust etc. Are these for real? Do these types of companies have a name? What should I look out for? I've been offered from 65% to 83% retention of earnings.
3) Health care. Which ever country I end up paying my social security to through the above system would be responsible for my health care, so treatment would be claimed back from belgium, bulgaria, gibraltar... do you bother with that or just take out private health cover?
I've seen bits of information here an there, but I don't know where to start. Are there any UK based accountants with this kind of specialist knowledge? Can I just set this up for myself?
Many Thanks,
Jeff.
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