I have S1 but French bank is taking full social charges from interest

Reader Question: I have a UK state pension plus an S1 form to cover health costs. Why does my bank deduct full social charges on interest even though I told them I should pay 7.5%?

The default rule for interest is that banks deduct 12.8% in income tax ‘at-source’ – called prélèvement forfaitaire unique (PFU) or the ‘flat tax’ – plus 17.2% in social charges. 

PFU is only definitive if you do not opt for the application of the ordinary income tax bands on all of your investment income in your tax declaration.

Read more: Key errors foreigners may make with French tax declarations

If your income is below certain ‘modest’ thresholds it is, however, possible to ask your bank not to deduct the income tax element at-source.

If you qualify for low social charges because you have a UK or EU S1 form, then you can also ask your bank not to deduct the full charges. 

In this case, you only pay 7.5% of prélèvement de solidarité, not the balance that consists of CSG and CRDS.

Read more: Must I pay social charges if I have private healthcare in France?

Officially, this should be done by giving your bank a sworn statement – déclaration sur l’honneur – signed and dated, that you qualify. 

An official French decree stated that this should be made every three years. 

It could be, therefore, that your bank has been levying the charges in full because you did not make a request to them in this formal way.

An example letter you can use is given below: 

Je soussigné/e [name] demeurant [address] demande à être dispensé/e du prélèvement de la CSG et de la CRDS. 

J’atteste sur l’honneur que je relève du système de sécurité britannique et je ne suis pas à la charge d’un régime obligatoire de sécurité sociale française. 

Voir Faq Brexit pour les particuliers: impots.gouv.fr/brexit-precisions-sur-laperiode-de-transition

Je relève depuis [date from which you started being covered by the UK system] dans le Royaume-Uni de la caisse de protection sociale de la Department for Work and Pensions en qualité de titulaire d’une pension de retraite.

J’atteste être en possession du formulaire S1.

Fait à [where you sign the declaration] le [date].

When you declare your income you should select box 8SH to confirm you are attached to the UK system, and not a burden on France. 

You should obtain a refund if too much has been paid. If not then contact your tax office, by messaging via your account at impots.gouv.fr for example.