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bigduckontax
bigduckontax, Accountant
Category: Tax
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Hi. I am looking at buying a UK and Wales registered company

Customer Question

Hi.
I am looking at buying a UK and Wales registered company that owns a lake in France, and provides 1 week fishing holidays to the customers that are 99% from the UK. I understand from Just Answer-Law that it is okay to be registered in the UK and provide holidays to that companies own lakes in France. The European Law Monitor also say that you can be registered in the UK and operate anywhere in France, but suggested talking to a Tax Adviser as well. Could you confirm if you too think this is okay, and whether there are any Tax ramifications that we should know about, if not just the UK Corporation Tax side. Any help and advise would be appreciated.
Regards
Larry
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello Larry, I'm Keith and happy to help you with your question.
Here is Contractor.com advice on your company's general situation in the scenario you are planning:
'Benefits of using your own UK Ltd Company
You’ll be dealing with a familiar tax process, provided you and the company
does not become liable for tax in France.
You can claim expenses for travel, relocation, etc.
You’ll maintain revenue continuity.
Downsides of using your UK Ltd Company
Despite these potential advantages, using your Ltd company can incur further tax liability and cause substantial immigration and visa setbacks. Specifically, some of the downsides include:
Creating permanent establishment in France.
Being in France for more than 183 days triggers tax residency for UK citizens. Once this happens, you’re required to be on a local payroll.
Preventing the use of Double Taxation Agreements.
Possibly paying corporation or company tax in France and in the UK.
Creating exposure to more tax rates
Possibly needing to register for TVA [French sales tax, equivalent of UK's VAT] in France.
Registering yourself on a local payroll as the company’s employee.
Doing your UK administration from overseas, which can be excruciating.
Possibly being required to register your company within the tax system in France(not recommended!).
Having to de-register your company, and ensuring everything is complete to the satisfaction of both tax authorities.'
French taxation is fiendishly complex, France has five times as many tax inspectors per head of population as does the UK, and you are advised to retain a local professional should you become enmeshed in its clutches.
However, perhaps we are over reacting. In essence it should be plain sailing and the best of fortune in your new venture. I do hope I have shed some light on your position.
Customer: replied 3 years ago.

Hi Keith.

Thank you for your reply and Help.

Currently the company runs fully from the UK and one of the directors would spend a total of about 70-80 days in France, spread out over several trips. The anglers/fishermen/customers only spend one week there at a time, some occasionally 2 weeks. They currently pay tax in the UK only. There is no office in France, just a house that is lived in whilst there. The only thing that takes place in France is the fishing itself and work on the lake, when the director goes over there.

On this basis, can we continue to run the company exactly as it is now, or is there a need to become a French company. This is the last thing we want to do, but do not want the French chasing us for tax or other at a later date.

Regards

Larry

Expert:  bigduckontax replied 3 years ago.

No, I think you are in the clear on this one Larry. Good fortune or perhaps I should say 'Bonne chance' in your new venture.

Please be so kind as to rate me before you leave the Just Answer site.

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Expert:  bigduckontax replied 3 years ago.
Thank you for your support.