Tuesday, June 28, 2011

Taxation in France & UK

The table below compares the income tax payable on incomes for a couple in the year 2010.

The figures assume that the couple are both over 65 years old.  It assumes that they have certain expenses which attract tax abatements in France.
1. A home help costing 1600 euros/year. (50% abatement)
2. Charity support of 300 euros/year (75% abatement) 
3. Subscription to a local natural history organisation of 20 euros/year (66% abatement)
These abatements amount to 1038 euros reduction of tax.

Such abatements cannot be used to reduce tax paid in the UK.
In France the total household income is assessed altogether.  In the UK husband and wife are taxed separately. [One must understand that this can complicate the situation dramatically.]  Here, the income is simplified as being from one source.
All these figures have been checked and confirmed by both English and French accountants. They are correct.

The columns are self-explanatory.
They demonstrate only too clearly the enormous disparity between UK and French taxation levels.  At the very lowest levels the UK residents pay over £2200 more than the French.
BUT - what is exceedingly disturbing is that if we consider a British national who is a retired teacher (or police- fire service - military etc.) and who lives in France - then they pay tax to the UK on their teacher's pension [because of the imposition of the Double Taxation Convention].   Thus such a person may well pay thousands (£) more tax than an equivalent French couple. The DTC is not advantageous to British ex-government pensioners.  It would far better if all income for all individual expatriates were taxable in France.

Revenue £
2010
Revenue in € @£0.87=1€
Income Tax if resident in the U.K. in 2010
Income Tax if resident in France in  2010

24000
27586
£2285.5=
2627 €
0
25000
28735
£2585.5= 2972€
0
30000
34483
£4047   = 4652€
629€ 
40000
45977
£6438   = 7400€
2423€
50000
57471
£9663   = 11106€
3973€
For 2010 the income for a couple of any age with NO expenses on home helps would have to start at 17283 euros to have any possibility of having a tax bill. For a retired couple with NO home-help expenses income would have to be over 25400 euros to pay any tax.
To calculate your own taxes you may use the very simplified spreadsheet on this site.  click here
Or use the much more complicated French Government site  (in French) . click here