Contractors’ Questions: Can I return to France but retain my UK client?

Contractor’s Question: I’m a French citizen residing in the UK and have contracted in the UK for some time so my tax status is not usually an issue. However, I would now like to go back and live in France but continue to contract in the UK via my existing limited company.

I would do this by working remotely and only travelling back to my client’s office one week every two months. Which country would I pay tax to? Also, what if I needed to have medical treatment in France; would my contributions be impacted by my intended movements?

Expert’s Answer: We often get asked for advice from contractors who are in a similar situation to yours. The simple answer is, if you are based in France and carrying out working in France then regardless of where your end-client is situated, you must pay both French tax and French social security. If you are living and working in France and do not pay French social security then you will significantly compromise your access to social cover including healthcare, unemployment benefits and pension.

Although the answer is cut-and-dry, there are several solutions you can choose from to do it. Firstly, if you want to continue operating your limited company, you need to be aware that working in France using a UK limited company is not compliant, so you would need to look into registering your company in France.

Another option is to open up a French limited company, or set up as a micro-entrepreneur/autoentrepreneur, which you may find to be more tax-efficient than simply registering your current UK company in France.

The third, and perhaps most cost-effective method is to use the services of a payroll/employment company that can offer an employment structure in France. This way, all tax and social security would be managed on your behalf and paid to the relevant authorities.

It’s worth looking at each of the options in more detail to find out which is the most tax-efficient and convenient. I would recommend you seek the advice of a French accountant and a payroll company with a local presence so that you can fully understand your options and make an informed decision.

The expert was Nick Broughton, payroll and contractor tax expert at Capital GES.

Editor’s Note: Related –

Contractors’ Questions: Will my limited company save us tax in France?

Contractors’ Questions: Will I owe UK tax when contracting in France?

Contractors’ Questions: Where to pay tax while on UK-France project?