Q: Is it legal to employ UK staff through an agency to work in France for the summer season? The French employer pays the agency and the agency then pays the employee into a UK bank account.
Nov 05 2010
Answered by: Chas Roy-Chowdhury Ask a question
My colleague John Davies, Head of Business Law at ACCA, is best placed to answer this one:
'If you are contracted to an agency which is based in the UK, and it is that agency which sets your terms and conditions and pays you, then you are entitled to regard that agency as your employer, wherever it is that you actually work. In principle, UK residents are taxable on their world-wide income, which means that anything they earn in France is also taxable here, although subject to an appropriate credit for the tax that they would have been liable to in France.
In the case in question, that situation would not arise since the income would not actually be paid by the French employer and no tax would be deducted. It is still technically the case, though, that anyone who earns income in France, even while working there on an agency basis, is liable to pay income tax on it. To avoid the small risk that you would be pursued for unpaid French tax it would be sensible to obtain confirmation from your employer that the scheme has been ruled acceptable by the French authorities and will not result in you having any additional tax liability.'
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