French use UK tax loophole • British hauliers may feel
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aggrieved about paying the highest fuel and excise duties in Europe, yet thousands of French citizens, including hauliers, are registering their businesses in the UK because the overall tax burden here is the lowest in the EU.
Agents involved in the registration of new companies estimate that as many as 40,000 small businesses and self-employed people Fr h: Getting on their from France and other EU countries • I in the past 12 months alone, exploited a European legal loophole which permits them to pay lower tax and national insurance to the UK Exchequer rather than to their own governments. In France, where social taxes are highest, about 20% of gross salary must be paid into national health and pension schemes; in Britain the figure is nearer 5%. National Insurance in France is also levied at twice the rate of that in the UK.
Spurred on by militant groups such as the Confederation for the Defence of Artisans and Shopkeepers, French citizens are taking advantage of a provision which allows the director of a company registered elsewhere in Europe, such as the UK, to pay taxes there, even though the business operates in France. Having registered themselves at Companies House in Cardiff, all they have to do is maintain a British-registered office which need be no more than a Post Office box number. By becoming directors of a British-based company and taking dividends instead of declaring themselves self-employed, French workers are able almost to halve the tax they pay. The French government insists the practice is illegal, but Kevin Brewer, managing director of registration agent Nationwide Company Services, believes his clients are within their European rights. Registrations are also pouring in from Belgium, Holland and Spain: he says the only way other European governments will close the loophole is by cutting taxes to UK levels. Several large French hauliers have been acquiring Britishbased companies, but Lyons haulier Giraud, which recently bought Stirring-based Barber European, says social taxes are not a consideration in such decisions.