No mans land....

Taxing times....

The summer clock has just sailed gently past mid august and of course France is shut for business, which is no surprise, summer leave and all that. France certainly understands downtime.

Meanwhile, we wait impatiently and we remain in no mans land, waiting for news of the new accountant and lawyer to be instructed. Nothing much ever happens in August. Qui, It's time to fight the good fight and hopefully come out the other side with our residency intact?

It turned out that the threat of customs arrest was a tad too real and all down to the accountant not filing some very important company documents back in 2023. Bizarre. This guy has been incompetent from the start and after the tax inspection, we were made to keep him, until the period of 'control' was over!

Imagine the irony of being written too by the same policeman that tried to intimidate us with news that a prosecutor was trying to get hold of us! Boy oh boy.

Oddly, I naively caused the inspection in 2023, because once I found out there were no tax documents in our online space, I wrote to the tax office asking for assistance, as the accountant didn't seem to have answers, nor did he seem as concerned as we were. I can only believe he didn't want his work looked at?

In terms of business and personal finance, we couldn't operate normally in France because of this almighty cock up, no finance, no french rental, no new private pension, nada!!

We finally got the returns late last year but by then it was clear the accounts had been reworked and not in our favour at all. The bills were getting bigger but we were all set to get the property finished, valued and to put a mortage on it. It was all still doable but the Notaires took their sweet time (5 months) actually putting the valuation down on paper! We came so close and then Philip suddenly had no clients and therefore no income. The accountant rang and said all likelyhood we wouldnt be allocated that ZRR. Strangely, we've never had this in writing to this day!

Were the tax authorities interested to help? No, not at all, in fact we were just sitting ducks, I hate to say it, we were 'foreigners' and the proverbial book was thrown at us.

Did they explain what went wrong?

Also no.

How did this happen?

I believe it's called being in over one's head in a foreign country, different language, complex business law and the SASu regime, which is rather easily interpreted many different ways by many different civil servants. Simply not being advised correctly which is why we employed an accountancy 'expert' and being left to fail is what happened in a nutshell. The accountant neglected to set up early dividends and the ZRR amongst many other issues.

The tax office also have blood on their hands, metaphorically of course, as they knew we were in the system and failed to recognise our tax residency, causing the lack of tax returns. Hence we are swimming in muddy waters from here on.

However, they knew we were there as did the accountant and everything bar corporation tax was being deducted but we didn't expect it to be because of the ZRR (zone rural recuperation) discounts. We were investing in a property through the company to be renovated and then airbnb'd in a love economic area. That entitled us to a low economic investment discount for five years.

When we returned from Canada and quickly got stuck due to Covid, we both got our residencies, registered as Auto entrepreneurs, submitted a part Canadian and french tax return, then once Phil reached the AE earning limits he contacted an expert and got set up with the SASu company regime, that my friends seems to be where it all went wrong! The tax office absolutely knew we were paying into the system! They made it very clear that they didn't like that his clients were canadian or British. It's not illegal and terribly naive given the socialist, protectionist nature of their world and no surprise that Brits find it super difficult to find French clients.

From the get go the accountant just let us hang, at one point he didn't even answer a message or give us a call for over a year. He absolutely failed us. He didn't ensure due diligence and said to us ' he assumed'.....! How could he say he'd done the declarations and filed them when he clearly hadn't?

Anyway, to add insult to injury Phil's last client that would pay him through France ended their working relationship suddenly in November and it became abundantly clear, that it was too hard to find clients in France. His current client even tried to run his pay through their Paris office but was told no, that his rates would not be accepted and if they were, there would be riots! Never forget we are dealing with a socialist country folks!

Got to admit with all this and the Lorry issue, local mayor and police intimidation, we are not the same people we were.

We've been so stressed and still are but the best thing we've done is ask for help over there. We are not equipped to deal with this on our own!

We now have a legal advocate, an ex French judge Roland L'miere who knows who to involve and how to sort the paperwork. He will get the right signatures on the right documents for us and is introducing us to a new accountant and a lawyer to fight the accountancy company.

On one hand the fact we can now get answers is brilliant, but we are not out of the woods yet. Far from it. I also suspect we will end up with a pile of extortionate legal bills we can't afford, but if we can save the property, get it rented out as a holiday let, as it was always supposed to be, then we can start the big repair. It's a beautiful house but the buying market is as flat as a fart at the moment, so we'd rather get it earning sooner rather than later.

Life is still fraught and I beleive we both are suffering from PTSD. Things are definitely not normal. Philip went over 6 months with zero pay and so it was that extra problem made the house of cards come tumbling down. We are trying really hard to get sorted, not dwelling on the amount of work and money that went into that property. Hopefully all is not lost? When we bought it, it was damp with many big ticket problems, woodworm, mushroom and mould. We did well and it wasn't easy given the other issue, poor workmanship in the begining. We got there in the end I suppose but it was absolutely unromantic, so not a French love story.

That said, he's not given up the dream entirely yet to my surprise and would still like to retire there one day. I don't even know if that would be possible and if I could make it work there again? Certainly not in the same area. That definitely remains to be seen. However, it would seem that our fractured french adventure is not quite as over as we'd hoped!

Love and gumption

D x