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paying your contributions


Humph
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Can anyone tell me if there is a base limit to the amount of contributions you pay as a micro enterprise?

I have been asked to pay a substantial amount for pension conts and other contributions when I dont earn anywhere near their "base amount". How can this be so when I know people who earn less than me (fair enough) but because they have pleaded poverty, they dont pay for anything.  One person has even had an operation in a private French hospital and because this person says they dont earn anything, they dont have to pay. They are actually better off than I am.

Can anyone point me in the right direction to find out about this.

Thanks

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Put simply, one of the disincentives to starting an enterprise in France is that social contributions in the early years are based on fixed amounts of estimated earnings - and payable whether you earn any money or not. It seems that in some cases you can plead your case and get a reduction, but this will probably have to be paid in later years.

A possible solution could be the new 'auto-entrepreneu' scheme, due to start in January, under which tax and social contributions will be paid on actual earnings (if any) as a percentage of turnover. There is a thread covering this new regime on the forum.

Hope this helps,

P-D de Rouffignac www.francemediterraneanproperty.com

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In terms of contributions, the autoentrepreneur scheme will only be very very slightly cheaper than the existing.

It is true that if you don't earn then you don't pay but then if you're not earning anything then you have more immediate problems than how much your contributions are...

The fact is that contributions are expensive over here and they always will be regardless of how they are dressed up and presented.  Sorry to be negative but it's because of our contributions that the public services are so good and we just can't have it both ways.

Lisa

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Dear Imc - I think you have to take into account the sort of people the new auto-entrepreneur scheme is aimed at. In the words of the documentation produced by the French government these include specifically part-timers, job seekers, students, the retired - that is, essentially people who may have a basic income but wish to supplement it with something extra. I imagine someone like an IT student selling his/her expertise creating websites; retired business people offering consultancy on an occasional basis; or - a real case situation - a colleague who is a qualified counselor and wants to launch herself in France.

Clearly the scheme is not aimed at large-ish enterprises, as there are limits on turnover. In a sense social security deductions are relatively high under the scheme - for example, a British person already retired and receiving a UK pension pays inordinately high French contributions the minute they start to work, for absolutely zero added benefit in return. I have had endless discussions with the various collection agencies on this point and was told I am helping the unemployed and families with lots of children!

The whole French system could be simplified overnight if they adopted the UK rule of no social security contributions after retirement age - one has typically paid in for 40 - 45 years at this point - and if you decide to continue working, you pay tax on the combination of pension+income, less personal allowances and business expenses. When I have explained this to French officials they are amazed it is all so simple. (If you are retired and living in France with CEPAM cover, this is effectively paid for by the UK out of the contributions one has paid there over many years).

Over the years reading this forum and others, the subject of older/retired British people moving to France and needing to earn a little bit extra before it's too late is a recurring topic, so I welcome the French scheme on their behalf. It also makes political sense if you take a broader view and consider Europe's evolving demographic profile - the age pyramid top heavy with older people living longer, the bottom base contracting due to smaller families and a decreasing working population. It is clear that the working population will be struggling to support the retired in years to come, and there is every need to help yourself to survive in old age. Any fiscal barriers to self-employment remind me of what used to known as the benefits trap.

At least the proposed French scheme is a small step in the right direction, given its intended target group. Let's hope they don't manage to mess it up in practice.

P-D de Rouffignac www.francemediterraneanproperty.com

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[quote user="Humph"]

Can anyone tell me if there is a base limit to the amount of contributions you pay as a micro enterprise?

[/quote]

There are base limits for different contributions, when you first start your enterprise they assume an anticipated level of income, obviously doesnt work for many small businesses.

If you know what income is anticipated, you should write to the organisation and explain your situation, and they will reduce your payments, without question.

You should justify your position as fully as you can,,,,, I dont know what you do, but as an example, if you had 2 or 3 contracts with a predetermined level of incoming revenue over the year, then that would be enough for them to reduce your payments inline with your income.

But you should be realistic, if you later declare over 10 % more than initially they will charge a late payment fee on the additional contributions.

 

 

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P-D,

I couldn't agree with you more about the scheme being good for retirees, also for students and people who are already salaried and just want to round off the end of the month a bit.

However, for anybody else who wants to set up a small business and work more or less full time, it is noticably different from the existing micro system only in that the turnover levels are slightly higher.  It has the same disadvantages as the existing micro system in that you can't declare a loss and can't deduct real costs.

Effectively, anyone who is working in a commercial or artisanal activity is still going to end up giving about 45% of their profit straight to the state and anyone in a profession libérale about 30% and unfortunately it will always be so.  Best just to tell it as it is, I think.

Lisa

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