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Working remotely from France

Self employed living in France, all buisness, via telephone and internet in UK. UK tax position?

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A client has for many years been a mortgage advisor, receiving leads from a UK based introducer. The client has recently moved to France and has continued to carry on the same business. Rather than meet clients face to face as was previously the case, all business is carried now out by telephone and via the internet. All business continues to be UK based and the same UK based introducer provides leads. As far as I can see, the client is still trading in the UK for income tax purposes as her business is carried out in the UK, albeit that she is likely to be treated as non-resident. Is this correct?

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By Tim Vane
17th Jun 2019 11:32

How so? The DTA is fairly clear on where she will be taxed and what her UK obligations are, and I can't see that she has any income tax liability in the UK. Or is your reading of it different? Perhaps you'd like to explain your thinking.

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Replying to Tim Vane:
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By firecodeblue
17th Jun 2019 15:53

Thanks. I thought that under s6 ITTOIA as a trade carried on in the UK based on the client base etc rather than the location of my client, the trade would be taxable in the UK. My thoughts were along the lines that it would be caught in the UK first but may be also caught in France under Article 7 of the DT convention.

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Replying to firecodeblue:
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By Vile Nortin Naipaan
17th Jun 2019 16:05

The double tax-treaty does not apply until you have double taxation. The first step is to establish the domestic positions in the UK and France, and then apply the treaty if both countries would tax the income to any extent.

I don't do French tax, but let's assume that the French position accords with s 6(1). The UK position is in s 6(2).

A trade is generally considered to be "carried on" where its contracts are habitually concluded. Nothing to do with where the client base is, per se.

Let's say it's taxable in both the UK and France. Then we go to the treaty. I can't be arsed to look at it, but I'm guessing that it's going to say that it's taxable in France and can only be taxable in the UK to the extent that it's carried on through a permanent establishment here (and there isn't one).

After applying both sets of domestic legislation and the treaty (then unless I got the French domestic position wrong, or if the treaty doesn't say what I expect it to say), we end up with it only being taxable in France.

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Replying to Vile Nortin Naipaan:
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By firecodeblue
17th Jun 2019 17:24

Cheers. Thanks for the help. Your guess on the double tax treaty is pretty spot on.

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Caroline
By accountantccole
17th Jun 2019 11:43

Minefield!
The business sounds like it is French based business with UK clients, so there would be income taxes to pay in France and social charges. The biggest issue is likely to be regulation so you need to get someone to look at the French side.
I'll message you

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By ireallyshouldknowthisbut
17th Jun 2019 15:38

The French would most probably treat your client as an french resident auto-entrepreneur.

Get advice in France.

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Replying to ireallyshouldknowthisbut:
Hallerud at Easter
By DJKL
17th Jun 2019 16:08

Does that only apply re Citroens and Renaults?

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Replying to ireallyshouldknowthisbut:
By gerrysims
17th Jun 2019 16:17

ireallyshouldknowthisbut wrote:

The French would most probably treat your client as an french resident auto-entrepreneur.

Not unless they registered as such ! But I agree with the last part about getting French advice.

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By David Heaton
18th Jun 2019 10:05

The key distinction is whether your client is trading 'in' the UK or 'with' the UK. As the client is not doing any work and has no base 'in' the UK, it looks like he is in the 'with' category. That means he is taxable in France, and liable for French social security contributions (and eligible for French benefits and healthcare). The DTA seems irrelevant, based on the facts you've given, as there's no double taxation: the UK can't tax a French resident who sells his services to UK clients without coming to the UK.

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