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BREXIT

No-deal Brexit ‘shouldn’t’ affect flights or Eurostar (but passengers urged to get travel insurance)

Britons looking to travel to and from the EU after Brexit have been told by the British government that a no-deal divorce with Brussels shouldn't affect flights or Eurostar services. But they are also being advised to buy travel insurance just in case.

No-deal Brexit 'shouldn't' affect flights or Eurostar (but passengers urged to get travel insurance)
Photo: AFP

The British government is stepping up its preparations for a no-deal Brexit given uncertainty around whether Prime Minister Theresa May will be able to get her Withdrawal Agreement backed by parliament.

The seemingly increasing prospect of a no-deal Brexit has left Britons in Europe in yet more anxious limbo. As well as their future rights in their adopted countries being up in the air, many have had to delay booking travel arrangements for fear that flights or cross-Channel rail services may by impacted in the event of a no-deal Brexit.

This week the government tried to reassure passengers due to travel between Britain and the EU after March 29th – the day when Britain will officially leave the EU, by publishing a new no-deal notice on the subject.

“UK citizens planning a trip to the EU and EEA before 29th March 2019 do not need to take action. In the event that the UK leaves the EU without a deal on 29th March 2019, some things may change for passengers travelling to and within the EU and the EEA,” said the government's no-deal notice.

The government believes that from March 29th “flights should continue as today” mainly “because both the UK and the EU want flights to continue without any disruption”. 

Nevertheless, in a sign that the British government is not totally confident of securing a smooth transition in the skies after Brexit passengers are advised to “check online for the latest travel information” before they leave for the airport.

Passengers are also told that on flights departing from the UK they will have the same rights “as apply today” and EU law will continue to apply for flights to and from the EU.

But again passengers are warned to take the necessary travel insurance and to “check and understand the terms and conditions of their booking”.

Eurostar and Eurotunnel services

For Eurostar and Eurotunnel services that link northern France to the UK the no-deal notice carried no mention that services “should continue as today” like there was for flights.

The government says: “From March 29th 2019, if there is no EU Exit deal, your rights as a rail passenger using either domestic or cross-border rail services will remain unchanged. Passengers on cross-border rail services will continue to be protected by the EU regulation on rail passengers’ rights, which will be brought into UK law.”

But again passengers are warned to “take out appropriate travel insurance” and to check up-to-date departure information before leaving for the station.

It was a similar message for anyone travelling by ferry or coach between the UK and the EU.

However a Eurostar spokesperson told The Local that the company envisages services continuing as normal. Although talks are ongoing Eurostar said passengers are advised to book their tickets as normal.

“At this point in time, we plan and expect to maintain services on the existing basis and timetable following Brexit. We are having constructive conversations with the governments on Brexit and will continue to do so,” said the spokesperson.

“We understand that the government is pursuing bilateral agreements to secure continuity of services, and that such agreements would apply even in the event of a “No Deal” Brexit.

“We are working closely with the governments to make preparations to ensure we continue to operate with this outcome.”

Have your travel plans been affected by the prospect of a no-deal Brexit? Please get in touch at [email protected]

 

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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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