Overseas Chambers of Peter Harris

Overseas Chambers
c/o Addington Chambers
160, Fleet Street,
London EC4A 2DQ,
United Kingdom
https://addingtonchambers.com

Fellow of the European Law Institute Vienna
https://overseaschambers.com/
Barrister at Law - Regulated by
the Bar Standards Board
Bar Mututal insurance: 8015/009

Holiday lettings in France: arbitrary RSI social security assessments on registration

November 19th 2014

 

 

Care is needed when registering as an individual holiday lettings business in France.

Some "bar stool" advisers even believe that the "wheeze" of getting the VAT back by so doing, can be achieved without French administrative repercussions.

Registration as an individual  trader at the one stop facility does provide a registration facility for VAT, on furnished lettings, but it also effectively registers the non-resident individual at the one-stop business register, used also for social security purposes.  It is at that point that the issue gets out of control.

Whilst EU subjects technically should only pay Social Security in one EU state alone, and not in several states, the catch-all French Social Security organism going under the epithet RSI, or Régime Social des Indépendants,  will seek to ignore this and issue social security assessment notices of €10,000 per annum, on the basis that no social security declaration has been made. Overseas Chambers has successfully required RSI to deregister clients from this unlawful administrative "poacher's" trap. The outcome has been that the UK NI contributor merely has to file an annual form with the RSI confirming that he is still registered for UK NI.

The position of UK NI payers is one thing. They are still harassed illegally by the RSI for payment, and it does take a considerable amount of time to bring this rogue organism to EU heel successfully on the basis of the directly applicable and effective EU regulations.  Those unwashed EU non-believers rapidly change their tune when they realise that Europe does work, if made to work.

The position of Channel Island residents is less regulated, given that the EU social Security Regulations do not at face value "apply" in the Island. Each case however depends upon nationality, not residence. For "Channel Islanders" as defined in the Third Protocol, there is some assistance given by the social security Convention in force with France which covers medical emergencies, and which is debited to Jersey Health.

Firstly, anyone believing that they can register for French VAT alone needs to take this into consideration, and any accountant dealing with the registration needs to be thoroughly briefed as to the existence of this RSI organism, and the likelihood that it will intervene immediately upon the registration taking place. As a starting point the activity may need to be registered from a Channel Islands address rather than from the French property.

Any individual seeking to register their holiday letting activity as a business, over a valuable property needs to take advice from Overseas Chambers as to how to go about this and avoid the extremely frustrating and expensive process involved in freeing the business from this, and other complications rarely mentioned on the websites recommending this type of VAT saving and income stream.

A detailed knowledge and experience of  EU legislation and principles is required to obtain non-registration, and it is possible to use a valid UK National Insurance Number where there is a UK employment or  business involved. Otherwise a suitably prepared documentation to the RSI prior to registration will be needed to invoke the Jersey Social Security agreement with France.

However, registration as a business implies that the individual has also become a "commerçant", which opens up potential minefields of legal responsibility. It is very important to seek advice as, whilst French individuals are aware of these traps as part of their civic education, that basic information is not readily available to non-French incomers.

 

Contact Peter Harris for details.