Relocated to France / Income Tax on Bonus announced following Tax Year

[aldid8]

Hello,

My employer has relocated me from UK to France on February 1st 2018.
Bonus (discretionary) for the performance of 2017 will be announced and paid end of April 2018: in tax year 2018/2019.
My employer informed me it will be paid by the UK entity: in GBP, taxed, and credited to my UK account.

In this company, Bonus are always described as:
- "Annual bonus" in the April (and first of the year) payslip communicated without reference to the Year
- "Total Variable Compensation 2016" in the "Compensation Review" letter (nothing official such as a payslip) when paid end of April 2017 for example.

My questions / concerns:
- will HMRC taxed this Bonus as a the only income for Tax Year 2018/2019 ?
- will HMRC adjust Income Tax to my overall revenue in Tax Year 2017/2018: that would be odd since Bonuses have always been paid the following Tax year
- can I just accept the level of UK income tax on this Bonus and not declare it in France ?
- Or will it be mandatory for me to do a UK Tax Return and declare this Bonus in France ?

Best regards

[RMC]

Answers to your questions:
1. HMRC does not tax anybody – it’s employers deducting PAYE & NIC or employees self-assessing!
2. Again, HMRC does not adjust anybody’s Income Tax to overall revenue in Tax Year 2017/2018.
3. It depends whether you will be liable to tax in France, which depends on issues you do not provide, mainly your future whereabouts.
4. As above.

[bd6759]

The bonus is taxable in the UK because it was earned here.

The bonus is taxable in the year it is paid: 2018-19.

HMRC is the tax asseessing authoity of the UK. It taxes everyone who is liable to tax. PAYE os a method of collecting that tax, as is self assessment.

[stuartb3502]

I can't provide an exact answer to your question, but perhaps worth saying that if you have relocated to France and will be resident there for tax purposes, you need to get some tax and financial advice from someone who understand the French rules and ex-pat issues. I'm looking at this scenario for a future move myself, so can't give reliable advice, but I do know enough to know that you need to get some proper help before things get messed up.

A decent employer should maybe arrange this. The UK and France tax authorities have similar but slightly different rules for assessing tax residency. There is a tax treaty between France and the UK to help you avoid double taxation, but the ins and outs for your scenario are beyond my level of current knowledge.

Some links to start your search:
https://www.expertsforexpats.com/expat-tax/expat-tax-advice/tax-in-france-for-expats/
https://www.expatica.com/fr/finance/A-guide-to-taxes-in-France_101156.html

Good luck!

[etf]

A French expatriate tax guide produced by PWC can be accessed through the 'useful links' section of the website below. It may be useful to both of you.

KR

etf

www.theexpatriatetaxfactory.com