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BREXIT

Preparing for a no-deal Brexit: The personal matters you should take care of

The increasing possibility of a no-deal Brexit is causing much angst among British nationals living in France. Kalba Meadows from the campaign group Remain in France Together (RIFT) runs through some personal matters you might want to take care of before Brexit Day.

Preparing for a no-deal Brexit: The personal matters you should take care of
Photo: Deposit photos

1. Think about moving money

  • If you have bank accounts, savings or investments in the UK, consider moving them to France now. Sterling may drop suddenly in the case of a no deal exit; there may also be temporary problems moving money in and out of the EU. 

2. Try to have a financial backstop

  • If at all possible, try and make sure you have access to enough cash to see you through two or three months, especially if your income comes from the UK and is transferred monthly. 

3. Consider your personal pension

  • If you have a personal pension in the UK (this doesn’t apply to state or public service/occupational pensions) and have not yet retired, think about getting advice about how to deal with this and cashing it in if you’re old enough, or moving it. There may be issues with the rights of UK insurers/financial services providers to operate in the EU without having a formal presence there after Brexit and these could cause problems e.g. with insurers making payments to those living outside the UK.  Write to your insurer/private pension company in the UK to ask them what plans they have put in place for post-Brexit scenarios. 

READ ALSO:

How to prepare for no-deal Brexit in France: Taxes, health and your carte de séjour

4. Top up your medication

 

  • If you currently rely on an S1 form for access to the French health service and you need regular medication, think about making sure you have a good supply of it on 29 March 2019 – if the worst happens and the reciprocal health care system stops on that date it might take several weeks to get an alternative system up and running and there may be short term chaos. Making sure that you have the permitted 3 months of long-term medication would mean that you'd avoid having to pay full whack for your meds while the situation was resolved.

5. Look at ways you could maximise your income and minimise your expenses

  • This applies particularly if the bulk of your income is in sterling, which may take a serious hit after a no deal exit. Can you survive if sterling hits parity? Goes below parity? What's your bottom line? What can you do to turn your income into euro income?

  • Create a personal financial contingency plan. Look at ways you can cut your spending temporarily, and at ways you could create additional income.

  • Get any potentially expensive dental or optical work done now, in case you have to reduce the cover on your mutuelle (if you have one).

6. If you have a business that relies on attracting people from the UK

  • Start thinking about changing your client demographic. If there is a no deal Brexit people may not want to travel to the EU next year and you may need to find new clients if you're to survive financially. Make sure you have a website in French, if you haven't already, and that you begin to advertise NOW to attract French and EU27 customers. 

  • Put contingency plans in place now to deal with potential issues with VAT, excise, billing, professional insurance cover, etc.

 

 

 

READ ALSO: 'The ball's in your court': UK tells France to ease expat Brexit worries

UK minister in Paris says France must ease worries of British expats

7. Make sure that you're in France on 29 and 30 March 2019

  • This is probably not the best time to make a family visit to the UK! Transport could be chaotic, with no agreements on air or other travel between the UK and EU. If you can't be in France, try to be somewhere in the Schengen zone.

8. Put some serious work into your French language

  • In a worst case scenario, we may be required to apply for a carte de résident that demands proof of language ability at A2 level. This wouldn't apply to anyone over 65 – but even if you are it's still a Good Plan to improve your French.

9. Think about, or rethink about, applying for French citizenship

  • When we carried out a survey on attitudes to citizenship a few months ago, a majority of respondents viewed applying for citizenship as a 'last resort'. For some, a no deal exit might be that last resort. French citizenship won't guarantee all the rights you currently hold as an EU citizen who has exercised treaty rights (mutual recognition of professional qualifications, for example) but it will guarantee you the right to reside and to work – and you'd continue to benefit from full free movement rights.

 

 

 

READ ALSO: Brits in France must start preparing for the worst

10. Marry a French citizen

  • Only joking. (Sort of). Actually, you might be better off marrying a non-French EU27 citizen, as EU rules on family members and reunification are more favourable than the national French immigration rules that would apply to a French citizen … 

11. Above all … don't panic!

  • This is about hoping (and working) for the best, while preparing for the worst. Whatever happens you won't be alone and will always find help and support from your fellow citizens.  If you need advice or support, think about joining our group Remain in France Together … it’s free and you’ll find 10,000 other people there in the same boat as you are.

If you missed the first part of this article, check out this page on the Remain in France Together website: https://www.remaininfrance.org/no-deal-checklist.html.

Kalba Meadows is citizens’ rights coordinator of the group Remain in France Together, and a member of the steering committee of British in Europe.

 

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Why some Brits in France are facing bigger tax bills since Brexit

Over the summer people living in France have received their tax bills, and some Brits who are residents here will have noticed that their bill is larger than usual - here's why.

Why some Brits in France are facing bigger tax bills since Brexit

Brits who live in France and make a tax declaration here, but have income from the UK, may have noticed that their tax bill has increased this year – here’s why and whether you can challenge the increase. 

Brexit

Yes, this is Brexit related and it refers to social charges on non-French income. The standard rate for these charges are 7.5 percent for income from an EU country and 17.2 percent for income from a non-EU country.

The tax bills received over the summer relate to the annual French tax declaration filed in April 2022, covering the 2021 tax year. In other words, the first year after the end of the Brexit transition period.

Social charges

Social charges are levies with a social purpose introduced in France in the 1990s to finance the country’s complex social security system.

If you have a French payslip you will already be familiar with them, and they actually make up the bulk of deductions from salaries, significantly more than income tax.

READ ALSO How to understand your French payslip

One of the big questions is whether France’s social charges are actually a ‘tax’ – the government repeatedly insists they’re not, for all that they look like a tax and are paid like a tax. 

The position on French social charges has changed several times in recent years, sometimes in response to court action all centred on whether this money that government deducts from your income can be called a ‘tax’ or not.

Katey Murray, at The Spectrum IFA Group, explained: “Article 29 of the amended Finance law of 2012 extended social charges to rental income from French properties and capital gains on properties for people who are not French tax resident.

“In 2015, a Dutch national challenged the fact that he was paying social charges in France and social security contributions in the Netherlands. The case went before the ECJ, which ruled these levies were similar to social security contributions and therefore contrary to European law.”

France’s highest administrative court, the Conseil d’Etat, confirmed the ECJ’s ruling. “French tax offices then, if a claim was made to them, reimbursed undue social charges,” Murray said.

“However, the French Government stated that these claims could only be made by someone covered for their healthcare by the system of another European country (EU, EEA or Switzerland) and not someone covered by a non-European health system. 

“This was confirmed by the ECJ for a French national living in China in a case in January 2018.”

Foreigners in France

And it’s this ‘healthcare system’ distinction that has become the key detail for Brits in France, clarified by a court ruling from March 2022 on the details of the Brexit Withdrawal Agreement. 

Social charges are currently set at 7.5 percent for income from an EU country, or 17.2 percent for income from a non-EU country. So income from the UK jumped to the higher rate at the end of the Brexit transition period.

However the ECJ ruling on healthcare cover is the key bit – essentially if you are already contributing to another European country’s social security system, you benefit from the lower rate.

This mainly affects two groups – Brits living in the UK (and therefore covered by the NHS) who have income in France, and Brits who are living in France and who have an S1, which states that their healthcare costs are covered by the NHS.

S1 holders are mainly British pensioners living in France, but the scheme can also apply to other groups including students and posted workers. 

Brits who are living in France and are covered by the French health system pay the higher rate on income from the UK. 

Technically the 7.5 percent rate is a ‘social levy’ rather than the prélèvements sociaux.

The ‘social levy’ is not charged on pensions, so if you are an S1 holder who receives a British pension, you will not have to pay any social charges at all, while certain types of property income may also be exempt from social charges.

Tax

As we stated above, social charges are not a tax (although they are deducted from your income by the tax office).

Taxes on income from the UK is covered by the bilateral dual-taxation treaty between France and the UK, which states that you don’t have to pay tax in France on income that you have already paid tax on in the UK. 

So the first thing to check on your tax bill is whether deductions relate to impôt (tax) or prélèvements sociaux (social charges).

Challenge your tax bill

So what to do if you think you have been incorrectly charged on income from the UK?

If you are an S1 holder, it’s a case of telling the tax office that you benefit from the lower 7.5 percent social levy, rather than the 17.2 percent social charge.

Murray said: “You can state that you are not subject to social charges by ticking boxes 8SH/8SI on your tax form (2042 form) or, if you have been charged at the higher rate, you can claim them back on your personal page on the impots.gouv.fr website.”

If the over-charge relates to a different issue – for example you have been charged both tax and the social charge or charged on exempt income – your first step is talking to the tax office, either in person or over the phone.

READ ALSO How to challenge your French tax bill

This article is a general overview of the tax rules and is not intended as a substitute for financial advice, if your financial affairs are complicated you are always better off getting professional help from an accountant who specialises in international taxation.

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