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

Contractor’s Question: I’m looking to sign an agreement with a UK based company to carry out a 4-6 month contract for them that will take place at their client’s office in France. What am I likely to be liable for in terms of taxes to the UK, if any?

Expert’s Answer: Firstly, I will presume that you are contracting directly with your UK-based client who is placing you on a fixed-term assignment at their customer’s site in France. Secondly, I will presume that you are currently tax resident in the UK. 

With your period of work in France, it is not expected to go beyond 6 months so you will certainly remain liable for UK tax on the income from that assignment. 

You will need to consider social security liabilities. If you are working in France as a UK-registered freelancer, you may need to obtain a Self-Employed A1 from HM Revenue & Customs’ NIC& EO (Employers Office) department. If operating through your UK PSC (Personal Service Company), you may need to obtain an Employed A1 from the same department. Be aware - the cost of social security in France is far higher than in the UK. 

You should seek definitive advice from a locally-regulated accountant or lawyer to establish whether your freelance status or operating your PSC requires local registration as well as local income/corporate tax returns. Positively though, any such liability can be offset against your UK self assessment and corporate tax returns.

The expert was Mike Philips, a director at its international, a consultancy specialising in tax and finance.