Taxation in France & UK

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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 taxable in the U.K. in 2010	Income Tax if taxable 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

Benefits

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Attendance Allowance, Carer's Allowance, Disability Allowance

I am grateful to David Burrage (legal adviser to the Spanish Expatriate's Association for all the supporting material in this matter.

On March 17th 2011 the Advocate General of the European Court of Justice gave an opinion (as guidance to the Court - one still awaits the Court's decision) which would mean that if the UK is the competent State for the support of your social security then you can receive these benefits at any time at which you may need them, as if you were living in the UK.
The UK is your competent State if you have never earned a living under the Social Security system of France (or any other European State where you may reside).  You, or someone on whom you are dependent, are likely to have paid contributions to the Social Security of the UK (National Insurance).  You probably have a UK Old Age Pension.

A possible scenario...  Mr. and Mrs. Smith retired to France in their late 60s, healthy.  Ten years later Mr. Smith becomes incapacitated (e.g. dementia).  If he had lived in the UK he would have been entitled to an Attendance Allowance.  He is entitled to receive this allowance in France although he has never received it in the UK.  

Until now the UK has resisted such a  payment (and probably will still do so!). They have insisted that any applicant should have resided in the UK for 26 weeks in the previous year. This insistence is illegal.

David Burrage writes as follows.

"Having regard to the above, all first time claimants to any of the above benefits, provided they meet the UK's qualifying criteria, as applied to UK residents, and where the claimant's competent State is the UK, should submit a claim immediately, even though they may at first be rejected. They should then lodge a formal appeal to a tribunal, since even where we may have to wait a few months for the final decision, the clock will already have started ticking from the date they made their first claim, provided they back it up within the prescribed limitation as to time, which is within 30 days of any dis-allowance notification.

Our message must therefore be, 'Don't delay, do it today'. " 

So if you are refused,  request at once the procedure for appeal.

The ECJ ruling can be accessed here.***click 

Winter Fuel Payment- End of the Road?

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Three persons at least have petitioned the EU on the matter of non-reception of the Winter Fuel Payment.

The answer they have received (recently sent to me) can be viewed here.

You will see it is dated 3 March 2011

The EU state:--

"The documents submitted with the petitions appear to suggest that the petitioners do not meet the relevant criteria to receive the winter fuel payment in another Member State because they did not qualify for it before leaving the UK. As explained above, it is permissible under EU law for a Member State to require that a person be entitled to a benefit like winter fuel payment in the UK before he or she can export it to another Member State (Article 7 of Regulation (EC) No 883/2004). The UK rules on this point therefore comply with EU law."

It is curious that British pensioners living in Europe can obtain an Attendance Allowance 'de novo' * yet cannot similarly obtain the Winter Fuel Payment. 
* (An opinion of the Advocate General of the ECJ [17 march 2011] elaborates on this - view the next posting on this opinion at the European Court - here.)
The AA is a non-contributory sickness benefit.  
The WFP is a non-contributory old-age benefit.
What on earth is the difference? Neither are defined as 'special' non-contributory benefits.

It is curious that the British Government is the 'competent authority' under EU law for the support of the British Old Age Pensioner 'as though he/she were resident in the UK - I quote from Article 24 of EU Reg. 883/2004-- shall nevertheless receive such benefits for himself and the members of his family, insofar as he would be entitled thereto under the legislation of the Member State or of at least one of the Member States competent in respect of his pensions, if he resided in that Member State.'  

and yet  the UK fails to support the British Pensioner in the EU. 

There is apparently no one in the British Government who is at all concerned about the British Pensioner in Europe. View the next posting up [MAY 21st 2011] on Benefits to see a possible future!

Calculation of French Tax

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UPDATED in September 1214  for the tax returns for 2013.

The spreadsheet for the calculation of Tax in France has been updated fro the tax year 2013 payable in 2014
It is viewable here.

This is designed particularly to inform those British pensioners who are in receipt of a Government linked pension (ex- teachers, police, fire service, military and local government workers).  It demonstrates that if you were taxed in France, then your tax load could well be less.  If you need home-helps, or help with your garden or you support French based charities or organisations them you lose out because of the workings of the anglo-french double taxation convention.

Euro and the £

Chart copied (with permission) from advfn.com

The Euro was worth about 67 pence in 2006 and May 2011 is now worth about 88 pence. This is a fall in the value of the £ of about 31%.
The British media so often informs us of the poor condition of the Euro and how Ireland, Portugal and other Euro-countries have such a bad time. Yet it seems the Euro is strong or the £ is astonishingly weak.
The British media so often tells us that inflation in the UK is soaring, yet in France we read the following [from le Canard Enchainé, a satirical publication]

Official statistics state that the purchasing power of the French has increased by 1.9%.  Is it possible? 

Yet in the last year..

Electricity has  increased by 6.4%

Rents have increased by 12%

Train tickets by 2.4%

Petrol by 18%

Gas by 5%

Flour by 20%

Bread by 5-7% and pasta by 5-10%

Coffee by 10-20%

Chocolate by 5-7%

Edible oils by 8%

Camembert by 2-4%

Biscuits by 3-10%

How is it that one can buy goods from the UK more cheaply (including carriage) than similar items in France?  In my experience in this last year we have so purchased from the UK- garden seep hose, electric fencing, walking trousers, spices, food mixer, bread machine, microwave, women's clothes [M&S].

The French Government, nevertheless,  aware of inflation, has asked supermarkets to propose a basic basket of nutritional food for less than 20 euros.  
The Secretary of State for Trade and Consumer matters, M. Lefebvre, signed the agreement on April 6, 2011.
Appropriate items will be indicated with a yellow basket label.

Here is the offering of Carrefour for 18 euros for four people (for two meals) or one person for a week....
- des pommes de terre (potatoes), des carottes, des courgettes et des oranges ;
- une brique (tetra-block) de jus d'orange 100 % pur jus ;
- 2 pièces de viande (meat) d'origine France : demi-longe de porc 'sans OGM' [not genetically modified], et de la basse côte de bœuf à griller ; (cheaper cuts indicated)
- 1 kg de poisson (fish) goûteux (tasty) et peu onéreux (le Pangasius) ; [Panga is a fish farmed in Vietnam and some environmental lobbyists claim it is polluted.]
- 1 baguette de pain (bread) (0,43 €) ;
- du fromage à blanc à 0 % gras (soft cheese with 0% fat).

Undoubtedly the expatriate pensioner has seen his purchasing power fall by something more than 30% [even 40%] in the last 4 to five years.

This tangle of economics is impossible to unravel and quite inexplicable. 
But the tale of economic hardship from the UK is getting wearisome.