UK retirees face surprise social charge bills on pensions in France

A growing number of retired UK public sector workers in France say they have been billed thousands of euros in unexpected social charges on their pensions, despite longstanding rules that should exempt them.

The retirees all receive UK government pensions, such as those paid to teachers, police officers and other public servants. Most retired before reaching state pension age.

Under the UK–France Double Taxation Convention (DTC), in force since 2010, these are taxable only in the UK and do not attract French income tax and social charges.

They are declared for information in France and a tax credit cancels out any liability. Andy Pickwick, 60, a retired police officer, has set up a Facebook ‘Government pension double taxation’ group to bring affected people together. 

He was told the change was due to him not having an S1, a form showing that the UK or an EU country pays for a person’s French healthcare, often because they are a state pensioner.

“The tax office said you have to pay because you do not have form S1... I said we don’t need it because they are government pensions, under the DTC’s article 19.

“They think we’re not paying for health cover anywhere,” he said.

Usually, government pensioners who do not also have a state pension might have French healthcare on residency grounds, or via a specific fee if they have high investment income. 

Mr Pickwick, from Tarn-et-Garonne, and his wife, a former teaching assistant, were billed for substantial social charges on 2023 income – they challenged this but were ruled against by the tax office and a mediator. 

They moved to France in 2020 and had no issues until now. He has sought advice from Alpes-Maritimes tax lawyer Laurent Gravelle, who suggested a large law firm might take on several such cases at reduced fees.

Mr Pickwick is also seeking clarification from the UK’s HMRC. He hopes that will sort it out at a higher level.

Some claim the tougher stance might come from new guidance “from Paris” but no formal policy change has been identified. 

It might instead reflect stricter interpretations in some local tax offices, with reports from several departments.

In France, pensions are normally subject to prélèvements sociaux (social charges), which help fund the social security system. 

The main ones are CRDS (0.5%) and CSG, which applies at rates from 0% to 8.3% depending on household income. 

These are separate from cotisations sociales, which are paid by workers to fund pensions and other benefits.

In a letter sent to Mr Pickwick, seen by The Connexion, a mediator argues the lack of an S1 healthcare form justified the charges, and describes the pensions as allocations de préretraite – pre-retirement benefits – not covered by article 19 of the treaty.

This interpretation is unusual. 

In France, ‘pre-retirement benefits’ normally refer to allowances bridging the gap before a statutory pension begins. 

Mr Pickwick, however, had a full 30-year police career, retiring at 55, while his wife retired early from teaching. 

Both have until now been treated as government pensions, not pre-retirement benefits. 

Their tax return was made in the usual way: their pensions were placed in the ‘tax credit’ boxes, and French income tax was annulled – but social charges were applied, allegedly due to the missing S1.

French tax rules state that foreign pension income is exempt from social charges if the pensioner is not a burden on the health system.

This includes UK and EU state pensioners who hold an S1 form proving their healthcare is funded by their home country.

However, government pensions are not exempt because the person holds an S1, but due to the double taxation rules. 

Mr Pickwick said members of his group describe similar experiences: a retired teacher couple living in France for 17 years had said they had never faced issues until now. 

An 82-year-old retired naval pensioner reported being charged for the first time.

Ex-teacher Sula Corbet, 60, from Aude, fears her teacher’s pension and her husband’s local government pension could be hit. 

She previously held an S1 through part-time UK work, which also covered her husband, but this will soon end.

Her husband had an S1 as her dependent.

“It was part of our financial planning that government pensions would remain exempt,” she said. “It will make a massive difference to us if we’re charged,” she said.

Retired police officer Joel Gray, 63, from Tarn-et-Garonne, is also going through mediation after his tax office started applying charges. 

“Their justification appears to be loss of our S1s in 2022 [when his wife ceased part-time work in the UK] but this should be irrelevant.

“If we lose, we will face ongoing double taxation to such an extent we have had to put our home up for sale.”

Mr Gravelle said he had liaised with the mediator in Mr Pickwick’s case. “In the past I’ve been able to contest social charges on government pensions, but this time there’s a block. I was told the decision ‘came from Paris’.”

Central tax authorities the DGFiP have so far confirmed to us the usual government pension rules, ie. that the social charges are “treated as similar to income tax” and “expressly mentioned” by the DTC, and may be “taken into account for the calculation of the tax credit on French tax”. 

We have also queried the ‘pre-retirement’ issue.

What to do if charged Check you declared your government pension correctly: section 6 of the foreign income section, boxes 1AL/1BL of the main declaration, and box 8TK (see our guide on the subject here).

If exempt via an S1, ensure a copy was submitted to the tax office.

If charges were wrongly applied, submit a réclamation by the end of the second year after the bill. 

The simplest method is via secure messaging at impots.gouv.fr (Je signale une erreur sur le calcul de mon impôt), stating the error, amounts, and reason.

If refused, you have two months for an appeal, and can seek mediation via your conciliateur or a finance ministry mediator.

Have you also paid social charges on a UK government pension in France? Let us know at feedback@connexionfrance.com