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RSI - SOCIAL CHARGES 46%


mary
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Someone please tell me they are wrong.

Husband has just received his first RSI social charge bill for 2010 and they want 46% of his earnings. We already paid 3,686E for that year and they are demanding another 12,000E.

This now equates to what we thought was an Ok salary of 33,000E, bringing it down to 18,000E net and we have also paid another 1,000E in tax.

We have two children of school age. We did not get the rentree money as 33,000 was over the limit, but on these workings out, we are down to 1,400E a month for small mortgage, school canteen, edf, water, foncier tax, mutuel etc all amount to 1,200. this leaves us to 200E for food\pertol!

Surley something is wrong here. I spoke briefly to the sectretary of my accountant, and she seems to think 46% is correct.

Help!!!
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We pay something like 65% of our earnings to the RSI but that is a full TVA businesses. Your accountant should have informed them of your accounts for the year and they take it from there basing the following year's cotisations on those accounts. We were told if we did not like that much being taken each year then we should close down, well that is what we are going to do after nearly 20years of it.
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HI Val, Thanks for the post, I have only just seen it. We were never told about the 46% charges and all along I asked if 30% is about right inc Impo which he confrimed was ok. Accountant spoke fluent english and the wife of my husbands partner is French, so no misunderstanding with translation etc

Husband was set up as a Sarl and accountant has now told us the Sarl should have paid these and I should have paid my Husband and his Partner Net. That way, the charges would be lower.

They have both decided to close down the sarl as their proffit can't cover these charges and both are registering as Micro.

sad thing is we came to France to better ourselves and because we were wrongly advised, now we have a short full of 5,000 to RSI this year and will have about 11,000 next year to pay for earnings this year which we had not allowed for. We wont be able to remortgage as the bank will look at our net earnings which doesnt cover our outgoings now, let alone another 15,000 .

We are in a terrible situation
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Unfortunately for the self employed, the RSI charges are a nail in the coffin of making a go of it here.We were told earlier this year if we did not like their charges, then we should stop working and go on the benefices, that was their attitude. Anyway as it happens, we have shut down due to a serious health issue and have applied for the RSA and other payments which means the RSI will have to whistle for payments outstanding from now on.I just thank god OH has paid nearly the full pension requirement of 40years. France is not a country to make a decent living in, it is too restrictive and unfair to those who work twice as hard as those in employment, mostly the fonctionnaires. Ask any farmer too what he thinks of the system and final pension outcome!
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idun, what I meant was for a better quality of life as a family, the house we have with land. Yes, we new charges were higher than being self employed in the Uk, but due to a crappy accountant not informing us properly and then not advising us of the charges we would incur after the first years auditing of accounts. We have never been in the risky financial situation we are in now or ever owed this much money.

We love living in France, better way of life for us as a family. certinaly do more as a family and have some lovely french friends and a good social life. Boys are settled at school.

It has just put a dampner on it all as I am sure we will have to try and negotiate paying over a 5 year period with RSI if they will let us or it will mean selling!
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Mary - if it helps, there are thousands upon thousands of self employed in France in debt with their RSI demands. We are behind because of an expensive court case trying to sue a non paying client which was our money to pay the RSI and when the huissier brought the paper round he said hehad already delivered over 30 of the same that week locally with hundreds more to follow.
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[quote user="mary"]They have both decided to close down the sarl as their proffit can't cover these charges and both are registering as Micro.[/quote]

Be careful with this. A friend of ours closed down his SARL and reopened the same business as micro (réel, I think). This was done on the advice of an accountant. Friend was subsequently told that if a SARL is closed down, the individual/s concerned cannot start a new business doing the same work for one year after the SARL ceases.

This may not be accurate; something may have been lost in translation or in the re-telling of the story but I would advise that you check it out. If true, it seems utterly bizarre to me as effectively it prevents someone continuing to earn a living for a year using existing skills but... some things about doing business in France do seem bizarre to me...

Good luck with your plans.

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I believe that is true, something to do with the fact that with a SARL or any other régime not AE or Micro, there is no turnover limit which is why most artisans are not AE because it does not allow enough to support a family. Therefore how could someone who suddenly downgrades to less turnover be able to manage and these are questions the fisc ask. We enquired about changing to micro some years ago and were told the fisc deem it impossible to live on,run a business and support a family.
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If we did donwgrade to AE, we would pay 23% not 46%. thefore have more money at the end of each month. With the Sarl, we did earn 33,000, but with the social charges and impo paid, we are down to 17,000 net which amount to 1,400 per month with a family of two children.

On the SARL we had only just earnt over the Micro and AE limit by 800E. If we went on to Auto Entrepenoeur we would pay 23%, so although 33,000 is 800 over the AE limit, on the 33,000 we would be 8,000 a year better off.

I went to CAF yesterday to see if we could qualify for some extra help or even just the Rentree money from Sept but they said that they can only take into account the Gross earnings NOT what you have left to live on each month.
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Don't forget, though, that under AE you cannot offset any expenses.  Your cotis are based solely on turnover.  So if you take 50000 and have 20000 expenses you would declare 30000 profit but ubder AE you would declare on the full 50000.
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You do get your CAF money though, don't you?

I'm afraid that life can be very hard in France and the government takes a lot. It isn't as if it is just the little businesses, the one that employed my husband had to fork out a huge amount, they paid the equivilent of half his salary went to the various government depts each month. And then he had approx 20% taken off the salary and then we paid les impots.

The government get their kilo of flesh off everyone one way or another, no wonder the salaries can be low in France, costs a lot to employ someone. And it's expensive to employ one's self.

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When we had employees, we had to pay their full salary each month and at the same time, 90% of that salary again to the social charges so we were paying almost two salaries per person per month and never had anything left for ourselves. Even the caisse congès took three times what we would have paid direct to the employee for his official holidays accrued, just to employ someone to push papers about!
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[quote user="mary"]If we did donwgrade to AE, we would pay 23% not 46%. thefore have more money at the end of each month. With the Sarl, we did earn 33,000, but with the social charges and impo paid, we are down to 17,000 net which amount to 1,400 per month with a family of two children...[/quote]

What do you mean by 'earn'? If that was income after deducting all business costs then you may well have been turning over much more (50,000-ish maybe).

When comparing a SARL (or any other réel regime) with Micro or AE you have to remember that the 46% is on profits and the 23% is on turnover. The two different percentages are because of that difference -- they assume that you'll have a certain default level of expenses.

As someone else has commented, if you have a business with high real expenses it doesn't make sense to be an AE.

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For those of you who are running a one or two man operation, I might have a solution which will allow you to continue working and survive in a more tax efficient way.

PM me with your email and contact details and we can discuss the options.

O

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No not so suspicious nor sinister.

But a plan, which is copywrite and so should be kept within a confidential framework for the moment at least untill its completly public. But I can discuss parts of it.

I'm working on this as a result of a business failure for the exact same reason as described by the previous posters. I didn't need a cacluator to decide that the numbers in my EURL just didn't add up, and so carrying on was madness and surley a path to ruin, I too got VERY bad advice. So I closed it.

So now after a moment of clarity and a lot of expensive consultation with expert commercial lawyers and Accountants, the plan emerges and will soon go public.

It saves between 30% and 40% in taxes, and is very simple to implement, but it does have parameters ouside which there is no benefit at all to the present status quo.

So those posters who are curious can discuss with me directly and those who want to snip and snide will proably not.

O

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I do not think that I am in breach the code of conduct which I have read and know very well.

If you read what I have said then you will see that I as offering to discuss a matter with forum member, just that I want to do it 'off forum', nowhere have I indicated that there is any financial commitment, nor will there be. So I cannot see that this contradicts forum code.

The reason for that is that in order to 'test' the theory with practical situations it entails some personal information, which is not suitable for public disclosure and hence by participating the recipient would benefit from the 'knowledge' of the theory without broadcasting their affairs- this is not finacial advice in disguise, its quite different from that.

So in summary, I am not selling anything, but I am asking for opinions concering a theory albeit in a confidential fashion.

There are a lot, on the forum who are suspicious and they have a right to be, equally there are many others who, like me have put their heart an soul and sweat into an enterprise for years and have exactly NOTHING to show for it- except the satifaction of being legitimet, legal and 'paidup'. (that's nice but it doesn't make food for the table). This idea works for me but will it work for others, that is the question.

There has to be a better way to live and work in France, if there is we all owe it to Society to look into it.

O

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Oracle, unless you are professionally qualified and registered, I would be very careful in doing anything that is perceived as giving financial planning advice, as if it does not work, then you can be sued.

Also if you are promoting what is perceived to be a scheme, the French authorities can have a go at you.

I would take advice yourself first, to make sure you do not get into something that could prove rather expensive on your part!
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