Advice and Guidance

[Shaft1able]

Hi everyone,

I hope you are all well.

I come to you all today to ask for advice and guidance in regards to a change of circumstance in my employment terms.

I have been employed for the same company in the UK for over 14 years as a full time employee. I have moved to France to support a family member (since April 2016) and I am looking to stay there for at least one more year while working from abroad. I have now been asked by my company to resign and sign a new contract as a contractor.

I would like to know what are my options in terms of setting up as contractor or limited company and what would be the best option in terms of tax efficiency.

My company have told me to propose gross annual salary that I would invoice them through my company 12 monthly installments, taking into consideration all the social security, insurance and tax liability that will be my sole responsibility.

So far my idea is to split invoicing between UK and France, taking advantage of the UK tax free allowance, but as mentioned above, I have been an employee through out my working career and haven't a clue what % of my existing gross salary I should invoice them considering all my responsibility with tax ...etc.

Many Thanks in anticipation for your co-operation on this.

Regards,

[cojak]

Your company is taking huge advantage of you.

Get legal advice first.

[eek]

Your company is taking huge advantage of you.

Get legal advice first.

Not quite. The OP has moved to France and the UK company has continued to treat him for over a year as an employee even though the location of where he should be being paid and taxed isn't that clear - I seriously doubt many companies would be as generous as his have been...

The OP does need legal advice but both the OP and his former employer need good tax advice from someone such as Sue from iPaye to understand the consequences of living full time in France,,,

[Sue B]

If you would like to discuss your personal tax and social security liabilities, both in France and the UK, please feel free to contact me.

In the meantime, as a broad overview, your previous employment status, number of years with employer etc are irrelevant. At the most basic level, tax and social security liabilities are decided by "where do you work and where do you live".

From a social security point of view, its quite straight forward, by default you pay this where you work. However, If you are a posted worker, your employer can look to obtain an A1 Certificate, meaning you continue to pay UK NI. That said, 'm not sure you are a posted worker, as you say you went to France to support a family member, not because your employer asked you to.

Without an A1 Certificate French social security falls due, from day 1.

Taxation is a bit more complex. You become resident in France from the outset for tax purposes either:-

a) Because you receive remuneration from a company who has a permanent establishment in France, or,
b) Because you spend more than 183 days there. In which case you will have been considered to be resident from day 1, not from day 184.

Being tax resident in France does not automatically remove your tax resident status in the UK. Unless you elect to become non resident in the UK, then you will still need to declare your global income to HMRC. This is why we have double taxation treaties, they decide who has first taxation rights when you become taxable in two countries on the same income and provide for foreign tax credits back home.

How you choose to work and get paid in France should be a personal choice based on personal circumstances, and not just based on what your ex employer (your new potential client) wants. Make sure whatever you agree with the client works for you and is compliant in France and the UK. There are no shortcuts. Failure to get things set up right from the beginning can bring a great deal of pain a few months down the line.

HTH

[Fred Bloggs]

^^^^ What a terrific post. Thank you.

[MrMarkyMark]

^^^^ What a terrific post. Thank you.

+1

[Shaft1able]

If you would like to discuss your personal tax and social security liabilities, both in France and the UK, please feel free to contact me.

In the meantime, as a broad overview, your previous employment status, number of years with employer etc are irrelevant. At the most basic level, tax and social security liabilities are decided by "where do you work and where do you live".

From a social security point of view, its quite straight forward, by default you pay this where you work. However, If you are a posted worker, your employer can look to obtain an A1 Certificate, meaning you continue to pay UK NI. That said, 'm not sure you are a posted worker, as you say you went to France to support a family member, not because your employer asked you to.

Without an A1 Certificate French social security falls due, from day 1.

Taxation is a bit more complex. You become resident in France from the outset for tax purposes either:-

a) Because you receive remuneration from a company who has a permanent establishment in France, or,
b) Because you spend more than 183 days there. In which case you will have been considered to be resident from day 1, not from day 184.

Being tax resident in France does not automatically remove your tax resident status in the UK. Unless you elect to become non resident in the UK, then you will still need to declare your global income to HMRC. This is why we have double taxation treaties, they decide who has first taxation rights when you become taxable in two countries on the same income and provide for foreign tax credits back home.

How you choose to work and get paid in France should be a personal choice based on personal circumstances, and not just based on what your ex employer (your new potential client) wants. Make sure whatever you agree with the client works for you and is compliant in France and the UK. There are no shortcuts. Failure to get things set up right from the beginning can bring a great deal of pain a few months down the line.

HTH

Thanks Sue!
how do i get in touch?

[Sue B]

You're welcome.

You could either drop me a PM or email me, [email protected], with your contact number, and I will call you back.

KR

Sue