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No end in sight to driving licence woes for Brits in France

A month after a new process to exchange to driving licences was due to go live Britons in France remain unable to access it with UK authorities admitting that the delay is because no reciprocal agreement between the UK and France is in place.

Published: 5 February 2021 08:32 CET
Updated: 7 February 2021 14:25 CET

No end in sight to driving licence woes for Brits in France

Photo: AFP

The issue of swapping driving licences for UK nationals living in France has been a long and painful one with frequently changing advice that has meant that since 2019 most people have been unable to swap their UK licence for a French one.

This situation seemed to have been resolved at the end of 2020 with the announcement that from January 1st 2021, Brits living in France would be able to use an online portal to exchange their licences for French ones.

All UK licence holders would have to exchange their licences, but they had a year to do it.

However when people tried to make the exchange at the start of January they were confronted with an error message.

From the beginning French authorities said this was because a reciprocal agreement between the two countries had not been concluded, but British authorities initially pointed the finger at complications and delays on the French side.

However this week, UK authorities confirmed to The Local that the ongoing delay was was indeed down to the lack of a reciprocal agreement.

On Thursday a spokesman for the British Embassy in Paris told The Local: “A reciprocal agreement is not yet in place but we are in close contact with the French authorities to confirm future arrangements regarding the exchange and recognition of UK licences in France.

“We are unable to comment on specific timelines but hope to secure an agreement as soon as possible and will communicate any updates on the Living in France Guide.

“In the meantime, valid UK licences will continue to be recognised in France until the end of 2021”.

It's not clear how many Britons in France are waiting to exchange their licences but the number could easily stretch into many thousands.

The intention was that they would have a year to exchange their licences but this has now been whittled down to 11 months with no firm start date for the beginning of exchanges.

Current rules say anyone who does not manage to make the application to exchange their licence before December 31st 2021 will have to take a French driving test – an expensive undertaking which sees the average cost of the test and compulsory lessons at around €1,500.

This is just the latest twist in the long and complicated saga of UK driving licences.

In the aftermath of the 2016 Brexit referendum, the British government told all British people living in France that they would need to exchange their driving licence for a French one.

Thousands of people did so, completely overwhelming officials in the small department at Nantes préfecture which processes all requests for foreign licence exchanges. It resulted in a massive backlog of applications as well as many “lost” ones.

In 2019, French authorities issued a new directive – only people who fell into certain categories (such as those whose licence was lost or about to expire) needed to exchange their licence, everyone else could carry on driving on their UK one.

They then began work on clearing the backlog and also created a new online process to make applications easier.

This means that anyone who moved to France after 2019 has never been allowed to make an application to exchange their licence.

The backlog appears to be affecting all licence applications, with many American drivers reporting that the process has taken many months.

Member comments

Anonymous - 5 February 2021 at 17:42 CET

Despite TheLocal repeating in articles on this subject that the portal was only open on the 1st January 2021 this is not correct. It was open about the 1st November 2020 and I duly made the application which was acknowledged and submitted the ID photo requested. I did read that only applications already submitted correctly before 1st January would, in fact, be dealt with. However, to date I have received no further communication. Furtunately my UK licence is valid to 2023. The French one should arrive by then
Anonymous - 5 February 2021 at 18:01 CET

The above is correct. I applied in March last year but made a mistake on it. I applied again in December and got a reference number. Unfortunately my licence expired in July.Quite worried!
Anonymous - 5 February 2021 at 20:57 CET

TBH I think both the French and UK governments have quite a lot of other things to think about now, in these times with Covid.

Would it be practical for the 2 governments just to extend the period to exchange licences to rnd of 2022 ? Let’s be honest : it already seems unlikely that the responsible French office could complete the work by end of this year as so much time haa been lost.

To allow more important things to be dealt with it would make sense to immediately increase the deadline to end 2022.
Anonymous - 5 February 2021 at 20:58 CET

The silly, xenophobic, racist, fallen-empire-victim witty britties should have thought about it before making the worst decision a nation has ever made.
Anonymous - 7 February 2021 at 20:55 CET

Hopefully this will be sorted because Stanley Johnson has applied for French citizenship!
Anonymous - 10 February 2021 at 18:11 CET

You are all right to be concerned. My partner sent off his South African licence (which he had had for 27 years) in June 2018 to Nantes for exchange. Many phone calls later eventually the documents were returned last August with the information that he should now submit it all again online. This he did immediately. Today he has had an email telling him his application has not been approved. I wish everyone luck. They are going to need it!
Anonymous - 10 February 2021 at 18:21 CET

You are all right to be concerned. My partner sent off his South African licence (which he had had for 27 years) in June 2018 to Nantes for exchange. Many phone calls later eventually the documents were returned last August with the information that he should now submit it all again online. This he did immediately. Today he has had an email telling him his application has not been approved. I wish everyone luck. They are going to need it!
Anonymous - 9 March 2021 at 17:57 CET

There are also a significant number of British citizens reaching the age of 70 whose licenses become invalid after their 70th birthday. If they could have exchanged them, the French do not have such an age limit and they would still be able to drive. However, due to this mess, they now no longer are able to drive and can not exchange an expired license, so are being forced to consider more dangerous and expensive insurance options such as purchasing a no license required micro-car. However these limit people who might live in more remote areas as they are also speed limited. I can not understand why the UK government does not agree to a reciprocal agreement. When the EU began, the British government had no problem with the reciprocal arrangements, so why now?
1. Anonymous - 23 October 2021 at 13:53 CEST
  
  Are there any other Brits here in my situation which is giving me much concern ? I am resident and within the 6 month expiry period of my UK Driving Licence I applied in July 2021 for an exchange. My Demand was acknowledged and there has, so far, been no request for any extra information. According to my ANTS account my application is being dealt with. My messages to Ants and to Paris Embassy go unanswered and obviously, according to the one year rule, we must drive with a French Driving Licence after 31 December 2021. There is only 9 weeks left and then I maybe stranded!

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6 pension questions British people should ask before retiring to France

Retiring to France is a dream for many, but before turning that dream into reality there are some serious financial questions that you need to ask yourself to ensure that your retirement is a financially comfortable one.

For most retirees, their main or only income will be a UK pension, so it’s important that you understand how your pension will work once you make the move.

There are some specific rules and restrictions on taking pensions out of the UK, while there is also the question of how UK pensions interact with the French tax system.

Financial adviser, Maeve Hoffman, from Spectrum IFA Group, emphasised that people should not take these decisions lightly, telling The Local: “Figuring out what to do with your pension should be part of your wider financial plans for your life.

“This may be your most important asset, besides your home, and the best answer for what to do with your pension is highly individual. There are no sweeping generalisations when it comes to advice on private pensions. Everyone’s situation is different,” she said.

This article is intended as an overview of how the system works for UK pensioners and is not intended as a substitute for individual financial advice. The article is aimed at people who have worked most or all of their career in the UK and then intend to retire in France – the situation is slightly different for people who work in France and then retire here.

You can find an overview on French tax rules for pensions HERE.

Long-term or short-term

The first thing you need to carefully consider is whether or not your move to France will be for the long-term or short-term.

When it comes to your UK pension, there are some options that may be advantageous for French residents looking to stay here permanently, but they could make your life very complicated if you end up returning to the UK in the future.

Do not be afraid to ask yourself the tough questions – is there any chance you will have grandchildren in the future that you will want to be geographically close to? Have you ever spent a significant time in France, aside from short holidays? Do you have roots in France, such as friends, family or a home? If your health deteriorates, will you want to be cared for in France or the UK?

If are unsure about the answers to these questions, then take some time to really think about them. There are alternatives to permanently moving to France if you are unsure – for example, you could spend a few months a year here on a short-term visitor’s visa.

Understanding the different tax rules

British retirees should be aware that the UK and France have very different tax systems.

Once you become a tax resident in France, you have to file a yearly declaration, including your global income. The country that gets to tax that income is determined based on the tax treaty between the UK and France, which seeks to eliminate double-taxation.

As for your UK-based pension, the treaty states that if you have a UK government or civil service pension (eg a state school teachers’ pension), then this will remain taxable only in the UK. Some old NHS pensions were considered ‘government pensions’, but modern ones might not be. You can check if your pension is classified as ‘government’ here.

You still have to declare this income to the French tax authorities, but you will not be subject to tax in France on it. That being said, it will count towards your total household income, and could end up pushing you into a higher tax bracket which is something you should carefully consider, particularly if you want to take a large sum at once.

The same is not true of private pensions: these are taxed in France, not the UK, as soon as you become a tax resident here. Confusingly, the UK state pension is also considered a private pension, even though it is paid by the government.

You can find a complete guide to how UK pensions are taxed in France HERE.

As a result, you will want to think about whether your previous plans for your private pension were only advantageous to you as a UK resident. Once you become a French tax resident, they could have unforeseen implications.

You can find more information about tax rates in our tax guide.

Get reliable, expert financial advice before doing anything

If you have decided you want to be in France permanently, then you will need some expert tax and pension advice – but you need to be careful who you take advice from, this is a highly specialist area and it’s unlikely that high street financial advisers will have the knowledge that you need.

Brexit has also made getting financial advice more complicated, with fewer experts available.

Maeve told us: “Because of Brexit, you cannot use a UK-based financial adviser anymore – you have to use an EU-registered one. This has made things more complicated. When picking an adviser, seek out someone who has expertise on the local taxation rules in France. They should also be regulated with the financial regulator where you live and where they work.”

It can be especially complicated to parse out who you can and cannot take advice from – for example, some UK-based advisers have continued to give advice to EU-based clients, even though this can be particularly risky if the investments they recommend do not follow EU regulations.

There are also expat-oriented financial advice services that are located outside of France, but seek to offer tax advice to people in France.

She added: “Be smart and sensible. If you choose an adviser in Dubai or Spain for example, you will now be adding another regulatory organisation into the mix, plus another language.

“There are free, government-based services in the UK that can help you understand your private pension – Pension Wise and Money Helper. Before doing anything, you should consult the free services. Any financial adviser worth their salt would recommend this too.

“These services have begun to have longer wait times, so be sure to book well in advance of when you plan to draw from your pension.”

Deciding whether to transfer your pension

Another question that is important for Brits to think about is whether or not to transfer their pension into either a UK-based SIPP for non-residents, or a QROPS (Qualifying Recognised Overseas Pension Schemes).

The SIPP will keep your pension in the UK, while the QROPS moves it out of the UK, to Malta specifically.

These options can be helpful for French residents, but you need to familiarise yourself with their benefits and drawbacks.

“The QROPS is not for someone who is unsure of their future in France, as if you return to the UK within five years of the pension transfer HMRC will seek their tax back as if it was a full encashment,” Maeve said.

In France, a QROPS is considered a trust, you may also have additional reporting requirements to fill out along with your annual declaration (more info here).

You should beware of scams on this subject, as the post-Brexit period saw many scammers seeking to persuade Brits that it was now mandatory to transfer their UK pension – always be wary of any cold-calling or unsolicited financial advice.

Determining how you will want to draw from your pension

The next question is how you want to receive your pension – either as regular income or as a lump sum. The option that you chose will have tax implications in France.

If you receive it as a regular income, when doing your yearly French tax declaration, you will add up your pension income for that year and you will be taxed at the normal marginal rates for income (the barème). These rates go up to 45 percent (for the highest earners only) plus social charges if they apply (more on this below).

Pension income can also benefit from a 10 percent tax deduction, as long as it does not exceed €4,123 or fall below €422 per household.

Lump-sums are more complicated. Technically, French tax authorities would allow a return of once off pension capital to be taxed at a flat rate of 7.5 percent.

But in reality, Hoffman explained that anyone seeking to do this would need the express, written confirmation from French tax authorities that this rate will be applied.

She also explained that the type of private pension matters when seeking to get the lump-sum flat rate.

“There are plenty of different types of private pensions in the UK, but the old ‘defined benefit schemes’ have been the gold-plated standard. These are the types of pensions that give you a portion of your salary for the rest of your life.

“In principle, you should be able to take out lump-sum of 25 percent of your ‘defined benefit scheme’ pension and be taxed at the 7.5 percent flat-rate. That being said, some people get refused, so you cannot make any assumptions and you need clarification from the French tax office.

“As for all of the other types of private pensions in the UK, like the money purchase or personal pension schemes, these are considered to be ‘funds’. If you want to benefit from the lump-sum then you would have to take out the entire pension. You would not be able to just take out 25 percent and get the lump-sum rate.

“For anyone considering taking their whole pension and seeking to use the 7.5 percent rate there are conditions to be met, so I advise people to write to their French tax office and explain their own situation in detail. Be sure to clarify the tax rate you are seeking to have applied and ask what documents they would need from your UK pension company to confirm that the contributions to this pension have been tax deductible.”

Healthcare and social charges

Deductions in France come in two types – impôts (income taxes) and prélèvements sociaux (social charges).

People who retire to France (and have never worked in France) and have already reached the state pension age can apply for the S1 – this means that the UK continues to pay for their healthcare costs and they would not be charged prélèvements sociaux. Non-working spouses of an S1 holder can also benefit from this.

People who take early retirement and make the move before they reach state pension age may have to pay social charges in addition to taxes until they reach the state pension age and can apply for their S1. However, there are several exemptions to social charges, so even if you expect a bill, you may not end up being charged. More information in our guide.

Social charges help pay for a lot of services from the French government, including access to healthcare. In France, you can access the state healthcare system (and get a carte vitale) after three months of residency.

READ MORE: Why you might get an unexpected French health bill

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