Working in France: tax worries

jeffing_great

Hi all,

I'm a UK national, 23, currently living and working in France. I have completed 3 years of a 4-year university degree, but for academic and personal reasons I decided to defer my final year and spend it working in France. The decision was supported by the head of my school and I return to England in a month's time to start my final year in September.

I started working for a French company in October 2008 and my contract finishes on the 30th June. It's a part-time contract (10-15 hours per week) so my earnings over 9 months are fairly modest. My employer obtained a French social security number for me, so to the best of my knowledge, I've been paying all the necessary taxes automatically.

My main concern is, should I have been paying UK taxes as well? I've heard that there is a double taxation agreement between the UK and France, and given the fact that I am ordinarily a UK resident & a full-time student, shouldn't I be exempt from taxation anyway? Or at least pay a lower rate?

I'm a little concerned as I know the system is different in France (apparently everyone has to fill out a self-assessment form) but so far I haven't had to fill out anything and I've never been contacted by anyone here in France regarding taxes. I'm worried that in a few months time they're going to hit me with a whopping bill, even though I've done everything I thought I was supposed to do.

If any of you have been in a similar situation I'd really appreciate it if you could share your experience or give some advice.

Thanks a lot :beer:

fengirl_2

The fact that you are a student has no bearing on your tax liability. Everyone pays the same in the UK, whatever their status.
As you will not be out of the UK for an entire tax year, you will remain resident in the UK for tax purposes and therefore be liable to tax on your worldwide income. But, as you state, there is a DTR agreement between the UK and France, you would get credit for French tax paid against your UK liabaility.
As far as UK tax liabaility is concerned, you need to know what yourFrench earnings were from Oct 2008 to 5 April and calculate whether any UK tax is due on that, then deduct the French tax paid. If the tax due is moe than £100, then you would need to declare this income when you come home. Similarly with the income frm 6 April to the date you leave.
Can't help you with French tax - have you tried asking someone where you work?

jeffing_great

Thanks for the reply, fengirl

I forgot to mention, I haven't actually been in the UK since September 2007 - I had a year of study abroad from Sept 07 until June 08 as part of my degree, and went straight to France immediately after, to look for a job and eventually start working. I've spent less than 2 weeks in the UK since September 2007. Does this change things in any way?

I've tried asking a few of my colleagues but they're not much help - they're all English as well, including the boss (it's an English school) but they all live in France permanently it's different for them.

System

If I've read your posts correctly then in the 2007/2008 tax year you would be classed as a UK resident as you were in the UK for 5 months of the tax year before you went abroad. Also you had no foreign income because you were a student abroad.

In 2008/2009 you were non-resident as you were out of the UK for the full tax year and so would have no liability to UK taxes.

In 2009/2010 since you are returning to the UK you will be classed as a UK resident and will have to declare any foreign income and the tax deducted from 6th April 2009 until your contract ends.

letitcomedown

It's a been a couple of years since I lived in France, but I still complete a tax return each year.

I am fairly sure there is still no PAYE in France, though it has been debated.

Your social security pays just that - social security and two "minor" income taxes CDG and CRDS. The main income tax is ONLY self assessment. The good news is that France is actually a very low tax country (high social security though..) and I'm 95% positive you won't have to pay much if any tax.

However you are late to declare for 2008- the tax year is Jan-Dec and you should have declared by the end of May or June. It is your responsibility to contact the tax office to get the necessary forms.

You will need to declare 2009's income by next May or June.

I would pop down to your local French tax office, in my experience they are very helpful and I wouldn't expect there to be any fines.

Check www.impots.gouv.fr for a tax calculator or www.totalfrance.com for advice in English.

Double taxation is a nightmare, and you'll have to tackle that before next Jan.