CLAMP DOWN ON COWBOYS (and property owners)

[oakbri]

[quote user="Gluestick"]

Thanks, Will.

From all the stories I've read and heard in research in particular concerning Provence, it seems that few French nationals there work for anything much other than cash! Pool maintainers, gardeners, decorators etc.

 

 

[/quote]

Seems in some places the new system still has to kick in.

[Will]

An ingrained culture won't change overnight. Even if a new system makes it easier for people to work on the level, I think the prospect of cash in hand will still have an appeal. After all setting up and running a business in England is dead easy in comparison and people there still like to avoid income tax, NI, VAT etc.

[virginia.c]

Was interested to see that you have had your fosse done.  Not sure whether it was new or a replacement, but if a replacement I'd be very grateful to hear ?  If my purchase goes through in 24 I will have to replace a very old fosse and the drains to it.  Various people have given me guestimates of cost and time to do the job.  Would be grateful for any info/tips you might have?

Many thanks

[Chancer]

Re the ingrained culture/waiting years for a Devi etc.

After 2 years of chasing the registered roofer who took my money but never completed the works ending in him still doing nothing after being served with the correct legal letters, and also trying to get other roofers to quote I finally gave up and asked someone I knew who worked as a roofer if he could help me.

He asked his patron whether he could have permission to do my work on his day off, and also presumably to cover his backside should someone report him to the authorities as releated before in this thread. Permission was given.

That is how it mostly works in these parts, the employee and of course the Patron pay more than enough social charges between them on the normal working week and doing small jobs on weekends/holidays is considered to be non taxable bonus if done with the knowledge and permission of the patron.

His brother ironically is a highly successfull roofer with a long waiting list of patient French clients, he worked hard in the past, invested in several properties from the age of 21 and now has enough rental income to to have given up his job and to work unseen, when it suits him on the black. He wouldnt even get up a ladder to look at my roof as it is visible from the main road and I live within the trading area of his ex patron, as I say he is  as busy as he wants to be and has many satisfied customers.

Maybe with the new system these 2 hard working people would be doing these extra works legitemately through their patrons, maybe it wont make any difference to a well ingrained culture.

[Aly (used to be Charlotte3)]

 

"The fact that the payments are compulsory and start on day one makes a big difference. A lot of potentially legally minded types have veered away from registering and are working on the black because of the fixed charges due in the first year before they've had a chance to get established."

Cerainly here in Mayenne this is no longer the case, so it's no longer an acceptable excuse! Gven that Mayenne is a backward sort of place,  I would imagine it is no longer the case elsewhere.

Aly

[Gastines]

Although I'm now retired and this doesn't affect me,regarding the payments to all and sundry becoming payable on starting a business,I'm sure I was told if you are actually unemployed and are starting a new business to give yourself employment,the payments for the first 2 years are offset!!! So if you started up as a Painter/Decorator or a Gardner, you could save yourself the initial outlay of approx 3000 euros. Perhaps some member could clarify this point,if I'm correct : I'm often not:, make this detail available to other members.

Regards.

[zeb]

Yes gastines, that's certainly the case in our area (Charente) but, you have to have been registered as unemployed to get the reduction, or liberation from cotisations for a couple of years. I did receive some paperwork about it a short while ago, but it was too late for us.

[LesFlamands]

[quote user="Gastines"]

Although I'm now retired and this doesn't affect me,regarding the payments to all and sundry becoming payable on starting a business,I'm sure I was told if you are actually unemployed and are starting a new business to give yourself employment,the payments for the first 2 years are offset!!! So if you started up as a Painter/Decorator or a Gardner, you could save yourself the initial outlay of approx 3000 euros. Perhaps some member could clarify this point,if I'm correct : I'm often not:, make this detail available to other members.

[/quote]

If you are a foreigner and registered unemployed (looking for work but no financial benefit) or on the RMI for a period of time (a year?), then when you start a business you may be eligible for a grant (in some areas) but you also get an exoneration on your social charge payments for a year and possibly a reduction in the second year. New law,  introduced this year I think, for new businesses starting in areas classified as 'Rural development zones' you are exonerated from income tax for up to 15 years!

If you don't benefit from the above you will have to pay social charges at about 400 euros a month even if you don't earn a cent.

[Gastines]

Perhaps the Moderaters could put info like the above in a specific Forum heading? The hardest thing when moving here on a more permanent basis is actually getting and finding the correct info about almost anything. Please don't say "It's all in the book", unfortunately nobody in France seems to know about THE BOOK. I do understand that Rules and Regs change and are frequently updated. To add on to that .I'm still trying to fully understand an article in Ouest France ,that says regarding Chambres D'Hote, that if you have up to 5 Rooms you DON'T have to pay any extra cotisations? Our Maire says we don't have to register with the CDC, the H.d. I. says, "Oh yes you do". Rock and a hard place comes to mind. One Notaire who stayed with us actually asked for our Siret number on booking. Which we have I might add.

 Also ,dare I mention Micki, untill he spoke to us we were unaware that we could register for part year and saved quite a few bob,sorry,euros, in doing so. The CDC did not tell us that option was available.

Regards.

[Aly (used to be Charlotte3)]

"If you don't benefit from the above you will have to pay social charges at about 400 euros a month even if you don't earn a cent"

I repeat what I posted before, this is simply no longer the case.

It is also virtually impossible to get the advertised help (which incidentaly, is not just for foreigners!) and you actually end up paying the same amount in cotisations over the first three years anyway. (Government figures, not speculation) Much better to try to stand on your own two feet!

Aly

[Gastines]

Aly, so that you don't misconstrue my posts, I am not advising on the ducking and diving side of life in France. I am pointing out how difficult it is to get the correct info on what you should legally be doing and what options are open to you. In one house we did B&B in we were told my the Maire that all we had to do was declare income earnt in France on our tax return. As we weren't permanent residents at that time and still registered in UK for tax etc, he just said," Oh,put it on your UK tax form then"?? Every Dept. Maire seems to read and advise what suits them on the day of asking. Being an immigrant here I didn't want to get thrown out for not toeing the line.

Regards.

[LesFlamands]

Aly, I would be interested to know how a newly registered Artisan or commercant (not profession liberale) can take advantage of earnings related cotisation payments in the first (and, maybe, second) year of operating. I know of a number of recently registered Artisans who are all paying their regular cotisations which works out at about 400 euros a month. This will rise to about 500 euros in the second year and the third years payments will be based on the first years profit.

Taking advantage of the exonerations if you've been unemployed or on the RMI is a long winded process which has to be handled carefully (or you can loose you rights very easily), but I do know of people who have been able to take advantage of the scheme

[Victor Meldrew]

Aly, I am registered here in France as an artisan, I have sat the stage at the CdM, paid by social charges for the last 18 months, paid a fortune for both third party liaibility and decennal insurance, had to pay my french accountant every month for doing my tva returns and my annual accounts, all of which adds up to approx euros 1500 per month, this has had to be paid from day 1. So if as you say there is another way to work legally and pay less, could you please let me know because I am trying to stand on my own two feet but seem to be sinking very fast.

Victor   

[Aly (used to be Charlotte3)]

Charles and Victor,

My OH is a commercant  and is in his second year of trading.  He has never had to pay full cotisations. He simply writes to the organism concerned when they demand payment and outlines his incomings. Some of them exonerate him completely, others reduce the amount payable. If this was not the case he would no longer be in business. He is a micro commerce so he does his own books and tax returns without help from an accountant. What I can't understand is if he can do this why does it not seem possible for others to do the same?

I'm not having a go, I genuinely don't understand why few others seem able to get the same result. I'm not suggesting either of you is doing anything remotely shady and I'm sorry if it appears that way. It does seem a convenient excuse though amongst the Brits generally.

I have several friends who use accountants, and they all seem to pay the bills as they come in and then receive rebates in their third year. This would be fine if OH actually made enough profit to pay them in the first place! Interestingly, when we tell them to write and agrue their case they look at us as if we're mad and tell us that their accountant told them they had to pay.

OH did try to take advantage of the scheme, but it was ridiculously difficult to comply with and very time consuming. Also you have to plan to start the business at least 6 months in advance of applying which just didn't suit his circumstances. I know of several French people who also gave up on the scheme and struck out on their own without the promised help.

As I say, I'm not trying to be negative, but has no-one else succeeded in getting their cotisations reduced....surely we're not the only ones? (they are reduced, not deferred by the way)

Aly[:D]

[Victor Meldrew]

I have tried speaking directly to URSSAF and the other organisations to whom I pay my social charges and have also had my accountant do the same for me. However this just seems to have the same effect as banging ones head very hard against a wall, all they do is say that the bills must be paid and that all will be sorted out at the end of the second year. I have even tried not paying when I was supposed to, but that just incurred a 10% penalty and that was followed by a Hussiar de Justice summons together with even more charges, the net result being an extra 180 euros on top.

It is not that I do not have the work, my books are full for approx the next 6 to 8 months with more in the pipeline, I just cannot turn around the work fast enough to make it earn a living with all of the charges. It makes you wonder if it is worth slogging your butt off for sod all.

Victor    

[LesFlamands]

[quote user="Victor Meldrew"]

It is not that I do not have the work, my books are full for approx the next 6 to 8 months with more in the pipeline, I just cannot turn around the work fast enough to make it earn a living with all of the charges. It makes you wonder if it is worth slogging your butt off for sod all

[/quote]

Victor, you have so much work booked up because you're undercharging. You need to be earning at least 150 euros a day (clear). You may get knocked back on some estimates and have a smaller order book but at least you'll be able to pay your bills. If you have a lot of orders that you are going to make a loss on you'd do better to tell the clients now rather than struggle for the next six months. you may find some will be reasonable and let you charge a higher rate. Also, avoid jobs that you're not skilled at.

In my experience (I've been registered for 14 years) cotisations are only deferred and even then usually attract a 10% majoration. You can opt to pay by standing order or 3 payments which sometimes doesn't get the 10% added.

[Chancer]

I have been following all these discussions regarding the high start up cost with great interest.

Could somebody explain the following in simple terms for me or tell me if I have misunderstood, I ran my own businesses for over 20 years in the UK both as sole trader and limited company but am struggling to understand what I have read here on the subject.

Taking the comments "you will pay 400 Euros per month for the first year, 500 for the second and the 3rd will be based on year one"

I take that to mean they will estimate your net profits in the first and second years and year 3 will be paid on the first years net profits, so lets put in some numbers and feel free to correct me as i am picking numbers out of the sky.

Year one estimated net profit (on which cotisations are payable) 15000 euros (please correct the figure to make it more realistic) resulting in a demand for 400 euros per month cotisations.

If they go up to 500 euros per month in year 2 then they must assume a commensurate growth in the business to say 20000 euros net profit.

So why in year 3 are payments made on 15000 euros when if the business continued to grow 25000 euors net profit would seem more like the figure?

Also what if the business in reality only produced net profits of say 1/2 the above estimated figures for the first 2 years trading, perhaps the owner didnt want to work 65 hours a week but only part time, would these overpayments ever be refunded or future cotisations reduced to claw it back?

What if like many that I have read of the business failed due to the overburden of cotisations, once again would the overpayments be refunded? - I have read cases where people claim to have had to continue their payments to the financial year end depspite having ceased trading.

It make the UK sole trader system look to simple to be true!

[Danny]

[quote user=" Aly - used to be Charlotte3"]

Charles and Victor,

As I say, I'm not trying to be negative, but has no-one else succeeded in getting their cotisations reduced....surely we're not the only ones? (they are reduced, not deferred by the way)

Aly[:D]

[/quote]

I went to Urssaf after the first year and told them my earnings in the first year (pitifully small) and they basically wrote me a letter to sign stating "here is my income and on that basis I won't be paying the demand you gave me". I also sent a letter to the other two organisms and received revised (lower) charge demands for the second year. Basically this happened because I had so little income in the first year (just over 2500euros). Of course that will change soon as I have made more this year. At the end of the day one pays what is due based on one's income, in advance or later. 

For those who have been unable to get their charges reduced - Of course, if it is not possible to pay the demands, it is just not possible, even if the officials insist. How are they going to take the money if you don't have it to pay them. Just write to them (before it is too late of course) and stick to your guns and tell them you cannot pay. Assuming your income is so low and that they have all the info, they will have to reduce their demands accordingly. What else can they do?

Danny

[Val_2]

In many cases they won't take no for an answer. Been there and done that many times over the years, sometimes the previous year yielded only a miniscule profit but the amount of cotisations the following year especially for retirement and health went sky high.Our accountant did manage to get one charge reduced but only slightly and it was still more than we had income coming in each month. Eventually they will help themselves to your bank account and take amounts out without even informing you, trust me, I know.

[Gastines]

We have found that if we have had a problem/query on any tax/cotisation matter, a visit to the office is much better than writing a letter. URSAFF etc all seem to visit each area quite regularly and a face to face meeting can work wonders. We have always found them very helpful and usually the problem is dealt with there and then.

Regards.

[Danny]

[quote user="Val_2"]In many cases they won't take no for an answer. Been there and done that many times over the years, sometimes the previous year yielded only a miniscule profit but the amount of cotisations the following year especially for retirement and health went sky high.Our accountant did manage to get one charge reduced but only slightly and it was still more than we had income coming in each month. Eventually they will help themselves to your bank account and take amounts out without even informing you, trust me, I know.[/quote]

I'm not sure I understand you correctly. The cotisations, as you know, are based on your income, not profit. If your income is high then the charges will be higher. regardless of your other expenditure. Below a certain amount you are not liable to pay URSSAF. Last year, I paid the minimum for the health part - 460 euros - for 6 months. It is not a huge amount really.

Also, no one can help themselves to money in your bank account if there is none there.

Danny

[Aly (used to be Charlotte3)]

Nicely explained, Danny.....I knew we weren't on our own!

Maybe it depends on where you live, and the attitude on the day of the person you have to deal with.Certainly, the offices dealing with our part of Mayenne have originally been most insistent, but helpful in the end.

Isn't it all meant to be changing for the better soon? It would be nice not to have to fight one's corner constantly.

Good luck to everyone,

Aly

[LesFlamands]

[quote user="Jane and Danny"]

I'm not sure I understand you correctly. The cotisations, as you know, are based on your income, not profit. If your income is high then the charges will be higher. regardless of your other expenditure. Below a certain amount you are not liable to pay URSSAF. Last year, I paid the minimum for the health part - 460 euros - for 6 months. It is not a huge amount really.

Also, no one can help themselves to money in your bank account if there is none there.

[/quote]

If you are an 'Entreprise Individuelle' your profit (BIC) is your income. The cotisations paid during the year are deducted from your gross profit to give you the net profit figure which is then used to calculate your cotisation for the following year. I didn't know that you didn't pay the URSSAF below a certain level, in fact, I thought it was the one cotisation you had to pay if you paid nothing else.

The URSSAF and the Impots (TVA) will happily freeze your bank account if you are overdrawn and then have their dues as soon as the account goes into credit. they can do this without notifying you and the first you know about it is when cheques start bouncing. As Gastines says communication is the best policy (with the bank as well) ideally, face to face, but even then it doesn't always overcome the problem.

An English accountant working in France once said to me that the difference between the UK and France is that it is not a crime to be unable to pay in the UK. Not quite true though, as I hear the Inland Revenue can be pretty heavy handed these days. The worst thing to get into problems with both here and in the UK is non payment of VAT/TVA as this is money that you've collected on their behalf and wasn't yours to spend in the first place.

Sorry to be so cheerful!

[Danny]

[quote user="LesFlamands"][quote user="Jane and Danny"]

I'm not sure I understand you correctly. The cotisations, as you know, are based on your income, not profit. If your income is high then the charges will be higher. regardless of your other expenditure. Below a certain amount you are not liable to pay URSSAF. Last year, I paid the minimum for the health part - 460 euros - for 6 months. It is not a huge amount really.

Also, no one can help themselves to money in your bank account if there is none there.

[/quote]

If you are an 'Entreprise Individuelle' your profit (BIC) is your income.

[/quote]

Ehm, sorry but that is a tad confusing. Profit is not BIC. My BIC is my income but profit (or loss) is a measure of the money coming in and going out of the business. That is why I differentiated between 'income' and 'profit' in the post above, as Val 2 mentioned both. Those responsible for collecting social charges are only interested in the amount of money coming in and not how profitable the business is.

Danny

[LesFlamands]

Now I'm confused. It may be different if the business is a Societe (where you would draw a salary) but if you are what is called in the UK a sole trader (Entreprise individuelle here) then your income is the difference between money coming in (turnover) and money going out (expenditure) which also includes cotisations. The result is your profit (or loss) which is known as your 'Benefice' or BIC. If you make large investments (in plant or buildings, for example) you can only count a percentage each year as expenditure and the rest has to be found from income or finance, but if you are having trouble covering cotisations you wouldn't normally be making large investments unless that is the nature of the business (property development, for example).

With the French system if you declare a loss, you will still have to pay cotisations in the following year as, I presume, you would still have to pay NI in the UK. The difference is the level of the payments - in the UK the compulsory element is peanuts but here it is the difference between a viable and non-viable business.