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France or UK: where do I pay income tax and will I get charged twice?

PUBLISHED: 09:14 14 August 2019

Here is where to pay your income tax after moving to France (c) Stadtratte Getty Images

Here is where to pay your income tax after moving to France (c) Stadtratte Getty Images

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Whether you are a sole trader, self-employed or employed, here is the lowdown on where to do you self assessment tax return if you live in France

If you are resident in France you must do a tax return in France and declare all your income, even if it all comes from the UK.

This includes business earnings but also pensions, rental income, investment income and interest on savings.

However, this does not necessarily mean you will pay tax in two countries. Thanks to a bilateral tax treaty between the UK and France (unaffected by Brexit) you will pay income tax and National Insurance contributions (or the French equivalent: social charges) in one jurisdiction only.

Where you pay tax depends on where your activity takes place. If you are doing work for a British company but sitting at a computer in France, you can not simply remain a sole trader in the UK, as the French will view work taking place on their territory as a French business.

This means that you would need to set yourself up as a French business, such as a microentrepreneur (similar to a sole trader) or a SARL (a limited liability company) and pay tax in France.

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If you are living in France but visiting the UK to do work, such as a short-term contract or care work, before returning to France, again you would need to pay tax in France.

Only if you have a fixed base in the UK; ie you're a company registered in the UK with registered premises, would your work be regarded as a UK activity. It would then be assessed in France with a 100% tax credit.

If you close your UK-registered business on moving to France and start a French business on arrival, then you will instantly change from paying tax in the UK to paying tax in France, even if this happens halfway through the fiscal year.

The equivalent of National Insurance contributions in France are social charges. These are very high for a SARL but not too bad for a microentrepreneur.

Robert Kent is Managing Director of Kentingtons Tax & Investments

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