UK tax law: can I work from my second home in France?

I currently have to work from home for my company in the UK. If I don’t have to go to my office, can I go to my second home in France and work from there, without paying income tax in France?

23 July 2020
Working from a second home in France could be complicated for British employees
By Connexion journalist

It depends how long you want to stay in France for.

Most UK companies would be against allowing its employees to do this as there are a number of complications that could arise. However, if you go for only a short time then it probably will not be an issue. 

Colin Leckey, a partner at an international law firm network specialising in employment law, Ius Laboris, said employers tend to err on the side of caution when it comes to allowing their employees to work from home abroad, as they have to consider tax, social security, healthcare and other factors. 

“The starting point is you could potentially be liable to pay income tax in France rather than the UK because you’re working in France,” Mr Leckey said.

“However if it’s just a period of a couple of months and you spend the other 10 months of the year living and working in the UK... that is not going to be sufficient to change your tax domicile from the UK to France." 

The UK and France have a Double Taxation Convention which ensures that people living and working between these two countries only have to pay tax in one. 

As a result, no one employed by a UK company and who is a resident in the UK but decides to work from home in France will be liable to pay tax in both countries. It is more a matter of which country they are liable to pay tax in. 

For anyone with a second home, if they spend more than 183 days out of 365 in France, for whatever reason, there is a presumption that they have become fiscal resident in France and should pay income tax there (although this can depend on personal circumstances and if in doubt several different tests may be applied to work out if someone has definitely changed tax residency).

Even if the person only works from France for a few days and spends the rest of the time on holiday there, spending too long in France can still change where they are liable to pay income tax. 

One other matter relating to tax that Mr Leckey pointed out concerns countries the company is declared as having operations in.

If a company has an employee whose job is to handle and negotiate contracts and they are working from home in France, that may be enough for French authorities to declare that the company has created a ‘permanent establishment’ in France, and would therefore be liable to pay corporation tax. 

Social security, employment rights and health

There are other factors besides tax for employers and employees to consider. For example, if an employee is working from home in France, they may be liable to pay into France’s social security system for healthcare, state pension etc rather than paying national insurance in the UK.

“For a short period of time that should be straightforward, as long as the appropriate paperwork is filed,” Mr Leckey said.

“But the more extended the period [the person stays in France], the more complicated it becomes.”

Statutory employment rights could also be an issue. If a UK company allows their employee to work from home in France, the employee may be able to claim French employment rights, resulting in complications if there is a dispute between the employer and employee. 

Finally, there is the issue of health and safety. Anyone working from home in France for an extended period may be subject to French health and safety regulations, which could provide further complications for UK employers. 

Read more about tax in France:

French tax advice: can over 65s get money off tax bills?

‘Number of days’ rule for French residency not enough

Can spouses be tax residents of two different countries?

If you need help understanding French income tax, check out our guide here

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