Uk based company - working in France

Liligirl74

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Mar 20, 2015
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Good morning,

My family and I are moving to France and the company I work for (as an employee) have agreed to continue to supply me with work but as a freelancer. They have asked that I set up a UK Ltd company, I will invoice them and they pay on a project by project basis.

I have always been an employee and am completely at sea now regarding what I need to do, how I pay myself, tax etc. I am only prepared to consider this if I am not financially worse off for doing it. Where would I pay tax - here - or in France? I am confused to say the least and we don't have a huge amount of money to spend on setup costs!!! Any help or advice would be greatly appreciated....
 

ethical PR

Free Member
  • Apr 20, 2009
    7,896
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    London
    If you want information on setting up a company look at the HMRC and .gov.uk site.

    You will need to speak to an accountant in France with knowledge of the UK system to see how best you can set up your financial affairs and any tax implications.

    I don't think you can set up a limited company in the UK if you are not paying taxes here.

    If you will be working on a project basis and were working full time you may not be on comparable income.

    I suppose the questions you need to ask yourself is - what sort of income will this give you and how secure is work on a project basis and are there are other sources of income you can secure on a project basis.

    Alternatively if you didn't do this, how easy would it be for you to secure comparable income in France.
     
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    D

    David Miralles Pérez

    The main issue here is: are you going to have a proof of residence in the UK? If you are moving to France and don't have a proof of residence in the UK, you won't be able to establish a Company, given that every Company in the UK must be register with its own address.

    If you have a proof of residence in the UK and want to establish yourself as a freelancer here, you will have to be aware of the business structure that you want to adopt. You don't need to establish a company if you want to work as a freelancer. Maybe you will be interested in registered as a sole trader. You can check this website out, it will help you through all the process: gov[dot]uk/set-up-business-uk/register-your-business-in-the-uk

    I'm afraid that I don't have many information about setting up a business in France. You will have to consult the pertinent authorities once you have moved out.

    Good luck!
     
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    SUKNC

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    Apr 8, 2015
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    Hello Liligirl74,

    First I will say that I am not an expert but right now, I am setting up my company and I am between going sole trader or ltd. This is what I have found out.
    You can have a ltd company registered in the UK and live wherever you want to live. You will have to pay for a registered office address. This address has to be in the UK, mandatory. You can hire this service from a lot of different companies.
    Regarding taxes: again, I am not an expert. I do not know how it would work if you were a sole trader, but in case you decided to go for the ltd, it may work like this: your ltd would "hire" you and would pay you a salary. Then (I think) you would pay your taxes for that income in France, because there is where you would be living. For the taxes of the salary you will to contact someboy with knowledge about the French system and earning wages from abroad. Then your ltd will have to pay all of its taxes in the UK, this is VAT and corporation taxes.
    Choosing the ltd might be good for you, because you may pay yourself the minimum allowance in France (if that exists, I don´t know) and then pay yourself at the end of the year in the form of dividends. This way you may save some money on taxes.

    Again, the best, is to contact a qualified person to assure what I have said.

    All the luck!
     
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    ...Then (I think) you would pay your taxes for that income in France, because there is where you would be living...

    I believe you should declare your taxes in the country in which you spend most time. So, if you are living in France for more than half the year, which it sounds like you will be doing, then you should declare your taxes in France.

    I know nothing about company status in France, though there is no reason why you should not operate as a self-employed person. Company tax in France can be higher than we are used to in the UK, so this is something worth checking out.

    One piece of advice is to arrange a meeting with your local tax office in France. They have a fearsome reputation, but they also have a duty to provide you with the best information that they can and it is worth working with them at this demanding time for you!

    Best of luck - I just happen to know people working in France - Pete
     
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    serendipitybusiness

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    Jun 27, 2008
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    I am a little late to the party but hopefully not to late to help or even if I am this may help other business owners who are leaving the country as I had to go through this process and am now totally free to run my businesses wherever I am in the world as long as I have an internet connection.

    I currently live in Saudi Arabia but my limited company and businesses are in the UK (set up before I moved). Most companies for contract hire to require you to have a UK limited company for their payroll purposes, so it is not surprising that they want you to do this. Although this may seem complicated and will involve extra work (in handing in accounts and end of year statements, set up costs extra) you will also see the financial benefit of running a limited company rather than being an employee, which should level things out for you, ie you can claim legitimate expenses related to your work, your set up, accounting and address costs will also go down as business expenses. Plus you will be free to also engage in other contracts should you want to.

    Setting up a limited company is reasonably cheap (generally under £100). However this does mean that you will need to submit your payroll monthly and your accounts and annual statement yearly. I would suggest you hire an accountant to handle this for you (the cost of which is also an expense for accounting purposes). The only thing you need to report is your salary (that you pay yourself through paye) to the French government, the company tax and expenses will only need to be reported to the UK government, which is what your accountant should handle (I would suggest using a UK accountant). You will also need to fill in a P85 to tell the government you are leaving the UK.

    Having a business address is easy. I use www.ukpostbox.com for this, they receive all of my mail under my business and personal name and scan it for me to see and download. This actually makes accounting a lot easier as it is already digitalised for me and I actually wish I had used them when I ran the business in the UK. It also gives me a premium business address so it doesn't look like a post box either, they will also forward mail, shred mail and even take cheques to the bank. I have been using them for nearly a year now and they have been a perfect solution for my needs. They are also very cheap considering the hassle they save and the service they provide and I have not found the service lacking in any way.

    Now working virtually will demand that communication is clear, so a good telephone line is essential. I use a fellow UK business forum member who was recommended on here in a post I placed looking for a solution. These are www.voipfone.co.uk. They offer a UK based phone number (multiple ones as well so you can have one for personal and one for business) over voip (you plug the phone into your modem, REALLY easy to set up especially if you buy their phones and it is just like using a normal phone, you can also use it on your mobile and tablet if it is connected to the internet or forward your calls at the touch of a button). Their service has been outstanding, the phone line is as clear as if I was in the UK and I am in the middle of the desert!! Calls into the UK are cheaper than chips and calls from the UK are no different than if your caller was calling any landline in the UK. Your extension and phone number rental rates are really cheap as well, it really isn't a considered purchase as it would cost you more to phone the UK anyway. The biggest cost is buying the actual handset, however I have two walk about phones that are better and were cheaper than my previous BT phones and it came pre programmed with my account data on it. You don't have to use their phones but I would highly recommend doing so. Again I wish I had used them in the UK too, certainly more effective and cheaper than it was to have my two BT lines.

    That is it, that is all I had to do to make the jump to a business model that holds no limits in terms of location. I can sit in the sun and successfully and efficiently run my UK businesses. Don't let the process put you off, it is worth it and having this system in place helps manage your personal affairs to in the expat lifestyle. If I can do it in the middle of the desert, you will have no problems doing it in France. Good luck and Bon Voyage!!
     
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    Bruno Domingues

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    Jun 7, 2015
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    One of my clients is a company formations business in UK so I had the chance to see a lot of people like yourself setting up businesses in the UK. British Expats are quite common all over the world.

    So for the company formation itself, the cost is 0. They offer the formation when you rent a registered office with mail forwarding which costs £185 / year.

    For accounting the accountants I use right now I'm paying £70/month (inc VAT) and they're quite good and reliable, do everything by e-mail.

    For taxes, EU law is the one that states where you pay your taxes. Basically if you spend more than 6 months in any given year in a specific country, you're liable to pay taxes in that country.
    This means you'll do your personal tax return in France.

    Up to £667 per month the company does not pay any NI / PAYE so you can make this your base wage then get the rest as dividends.

    You need to check with an accountant in France how much tax you will pay based on your foreign income and which option will be the best, to get paid more wages or more dividends.
     
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    Bruno Domingues

    Free Member
    Jun 7, 2015
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    Wakefield
    There are plenty of non-UK residents with UK Companies, companies house only requires a Registered Office Address in the UK.

    One of the companies that provides this service for £185 / year isEuropean Business Centre (MailboxUK.com)

    A Residential Address in the UK is also a service many British Expats use, for their bank statements, driving license and other UK documents. Then the documents are forwarded to them overseas.

    There is a difference between you as an individual and the company as an entity so the company will pay taxes to HMRC, in the UK. You as an individual will pay taxes in France if you reside in France for more than a total of 6 months per year.

    From my own experience, I was staying a few months in Estonia once and I had the tax authorities come knock on my door asking me how long I have been there, trying to assert if I was supposed to be registered with them as resident and paying them taxes. Once I told them I had been a total of 2 months and was leaving in 2 weeks, they immediately lost interest. I did research and knew I had to register for an ID card if I was staying there for more than 3 months but for taxes it's always more than 6 months and there are exceptions.


    Which income will be taxed in France?
    Live in France? (min. 6 months in a calendar year) You must pay tax on your worldwide income there.

    Lived in France but for less than 6 months in a calendar year? You are not considered tax resident and pay tax only on the income earned in France.

    Income from other EU countries? Check you never pay tax twice on the same income

    http://europa.eu/youreurope/citizens/work/taxes/income-taxes-abroad/france/index_en.htm
     
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    TODonnell

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    Sep 23, 2011
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    I find it helps to think of a company (incorporation) as a body and yourself as another body. If the company makes money, it pays taxes, according to local law, where it 'lives'. So do you, as a different category of legal person.

    You just have to work out what saves the most tax, legally. In the UK, you, as a human person, have a tax-free allowance up to X amount. UK companies don't. I don't know what the French do.

    We offer registered offices for UK companies. See my signature below.
     
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    Raw Rob

    Free Member
    Aug 1, 2009
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    Speak to an expert, probably this will need to be an accountant in France, otherwise an accountant in the UK who is a specialist in working with the French system. Some of the replies in this thread are wrong. It can all be quite complicated. I have a UK Ltd company and am currently trying to employ a Dutch national who will live and work in the Netherlands. According to the Dutch tax office, the only way we can do this is by becoming an employer in the Netherlands, the employee can't be on the UK payroll.

    If this is the same in France I don't know. If it is, then I assume that the simplest option is not to bother employing yourself, just take all your money from the company as dividends. (Whether this is the most tax efficient way, I don't know, just the simplest.)
     
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    annshep

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    Jul 4, 2017
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    Hi, looking for some advice please. We run our own Timber Frame Ltd Company in the U.K, been going for roughly 15 years, hubby has now been offered quite a bit of work in the South of France, some from a U.K firm that we work for and submit tenders for projects and others from private clients. We are now debating on moving the whole family to France for a fresh start and don't know whether to close the Company and hubby work over there as a sole trader or to keep the Company going and be a U.K based company working in France...what regulations would we need to follow if we keep the company going? and presume we would need to keep the accountant in the U.K and make the yearly visit in April? tia
     
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    Deleted member 59730

    Hi, looking for some advice please. We run our own Timber Frame Ltd Company in the U.K, been going for roughly 15 years, hubby has now been offered quite a bit of work in the South of France, some from a U.K firm that we work for and submit tenders for projects and others from private clients. We are now debating on moving the whole family to France for a fresh start and don't know whether to close the Company and hubby work over there as a sole trader or to keep the Company going and be a U.K based company working in France...what regulations would we need to follow if we keep the company going? and presume we would need to keep the accountant in the U.K and make the yearly visit in April? tia
    This is an old thread. I suggest you start a new one with your specific question.
     
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