Running a Business at a Loss

[AnOther]

I wonder if there are any legal "difficulties" in France in running a business at a loss.

If it were a properly established genuine enterprise which got you into CMU at a cost less than that of private insurance it could be a way forward for some to fill the gap between loss of CV and 5 years residency. Many fledgling businesses can expect to run at a loss for the first couple of years anyhow which might be all the time that some people need and could prove particularly cost efficient for those with uninsurable pre-existing conditions.

Remember please that it's Sarkozy who has thrown the croissant in the works forcing some people into creative thinking, in some cases to save their very lives [:-))]

[Ron Avery]

If you look at the health care issue threads Ernie you will see that the pros and many cons of setting up a "business" or "signing on" etc has already been discussed.

[Cassis]

That's how most French industry has been run for years.

[AnOther]

Wow, how nice to see the old sausage back............[8-|]

This is spooky though because just last night I was thinking how I missed some of the old stalwarts [:-))]

Not a religious person but to paraphrase..........there is more rejoicing over one sinner blah blah blah [Www]

[Victor Meldrew]

Why?

Surely it is far cheaper to pay for the private health insurance than it is to have to pay the set up costs/cotisations/accountants fees etc.

Victor

[BJSLIV]

The main advantage is that whatever you had to pay in fees, contributions etc, you would have cover for a pre-existing condition.

Depending on your age it might even be cheaper.

You don't have to have a medical to set up a failing business!

[Nick Trollope]

As I read it, if you set up a micro, you will get away with it for the 1st 2 years paying 3500 then 6000€ (for more than health care, of course). In year 3, you would report a turnover that obviously can't support you (or the government!) so they throw you out anyway.

You can't get CMU or CMU-C if you can't prove your income & I reckon that they will see straight through this for what it is. After all, Sarko is watching you....

[Helen]

[quote user="Nick Trollope"]As I read it, if you set up a micro, you will get away with it for the 1st 2 years paying 3500 then 6000€ (for more than health care, of course). In year 3, you would report a turnover that obviously can't support you (or the government!) so they throw you out anyway.

You can't get CMU or CMU-C if you can't prove your income & I reckon that they will see straight through this for what it is. After all, Sarko is watching you....
[/quote]

But you don't have to pay according to that schedule from 2008 onwards. You can pay as you go and according to your real turnover rather than an assumed amount. The deductions are also to be based on a lower percentage of turnover

 Régime des micro-entreprises après la réforme 2007

Le bouclier social permet aux cotisations sociales d’un entrepreneur individuel en micro-entreprise d’être plafonnées à un certain pourcentage de son chiffre d’affaires.
Ce pourcentage de chiffre d’affaires est de :

• de 14 % pour les activités de vente de produits ou de fourniture de logement,

• de 24,6 % pour les autres activités (activités de service).

Aparently the minmum cotisations will  be

1 352 € pour les commerçants,

1 393 € par an pour les artisans.

Pour ne pas atteindre ces seuils de 1 400 € de cotisations annuelles (pénalisant les micro-entreprises avant la réforme), il faut réaliser un chiffre d’affaires inférieur à 10000 euros en BIC.

You would also be declaring a pension income on your tax return so 'they' would know that your income was higher. However presumably you would no longer be inactive and would also no longer be affiliated to the CMU.

I'm sure it would be better, if only for your own satisfaction to at least make an attempt to make a profit .You do have to keep a daybook of credits and debits + all your invoices and receipts so presumably they are subject to checking. Who knows what the authorities will make of lots of British run tres petites microentreprises? You would have to go through all the documentation and set up procedure so  you could get advice at that stage.

I think it would also be important to find out how getting a miniscule French pension might affect your subsequent  right to the E121 from UK. (sorry to be vague but there might be implications and I have read somewhere that any contribution does result in a (tiny) pension.)

I know exactly where you're coming from. Hopefully I will be covered by the five year rule but with an ALD I can't get insurance and couldn't afford it anyway. I've been writing the business plan for the last 2 months- just in case.

 

 

 

 

[rogerthedodger]

Hi everyone,

Apologies if my question is an 'old chestnut' that has been covered before. I was really concerned to listen to the Jeremy Vine show & hear of the healthcare changes. My wife & I intend to sell up in UK & move to Charente (Rochefoucauld hopefully) next year. The big 'however' is that I've been insulin-dependant diabetic, for 43 years, am now 60 & my wife is 57. I am a self-employed UKCP registered psychotherapist currently completing my Doctorate & had intended to maintain my therapy practice in UK via TGV at least for a while. Don't worry the questions coming!

From the research I've done here my wife & I would each be covered by an E106 & get the ? certificate sejour in order to buy a property & live there. To work as a psychotherapist in France I believe I would have to register under 'Profession Liberale', secteur medicale et para-medicale, psychotherapeute BUT I can't find whether this is a regulated activity with presumably special provisions. I've tried the links from www.french-property.com 'More information on regulated business activities can be found by visiting Inforeg or APCE ' BUT can't find anything on psychotherapy regulation.

Our plan is for me to work, anybody's guess as to what earnings might be, in order to pay into 'the system', I don't believe the cost would be problematic since we both have reasonable company pensions & savings, and the main objective would be to be able to be resident in France to retirement age & beyond.

If there are any flaws in our plan & if anyone can point me in the right direction regarding being a self-employed psychotherapist that would be great. Sorry about being a bit long-winded & not being able to find the 'e acute' on my computer keyboard! 

PS, Helen, what does your last line in French mean, particularly the bit about 10000 euros?

[Will]

You say you intend to maintain your practice in Britain and commute by TGV. That will no doubt be your best option, because then as long as you spend more time in Britain than in France you can continue to pay NI in Britain rather than cotisations in France, and your dependents in France can be covered by an E form (such as E109). If the time in Britain restriction is a problem you may be able to get a workers' E106 but that is more for people in special situations rather then those who merely take their existing work to another country. E101 is another possibility but that will normally only give you two years cover and you have to maintain your address in, and links with, Britain.

Note that these notes cover only NI/social security payments, not tax. In your situation you would probably pay tax in Britain, but have to declare your income in France too, but under the double taxation agreement you would declare this as income on which tax has already been paid elsewhere, so you would not be taxed again in France on that part of your income.

You really need to talk to a specialist advisor with knowledge of British and French tax and social security systems regarding those who work in either or both countries - there are not too many of them, though plenty who will advise non-active people on investments.

Maybe the best answer of all would be to wait until you reach state pensionable age, then the health cover can be provided through the E121 form.

 

[rogerthedodger]

Thanks for your suggestions Will. However, since my wife is an exhausted community midwife-exhausted because 80% of her work is with mums from EIC & beyond (who don't have to provide 'right' to ante or post-natale care!), our choice is to move to France next year. It might be feasible for me to commutefrom Angouleme to St.Pancras (7hrs) & B&B in UK, but at 60 that does not appeal as a 5 year-plan.

I guess, as you say, I need to find a lawyer & accountant who are well versed in the professional registration issues in France & the taxation/?cotisations of small income from  therapy & workshops in France & our private pensions. It all seems very complicated, but I'm sure I'll find a way through the maze.

Thanks again,

Roger

[AnOther]

You might be closer than you think RTD [;-)]

A couple of things come to mind but please bear in mind that all of the following is my understanding of the current situation only so do take professional advice before acting on anything and regard this as food for thought only.

It all revolves around your wife and her retirement.

When she reaches retirement and gets her E121 you should be able to piggy back onto it. I don't know exactly when that will be of course, it depends on her birthday, but lets assume worst case that she's literally just turned 57.

According to this CALCULATOR she will reach retirement on 06/07/2011. If she worked until 06/07/2009 and then stopped and you then came to France she would qualify for an E106 which is valid for up to 2 years (some say you can eke it out to 2.5 years but timing is crucial). Having got an E106 you may be able to piggyback onto that as a dependant for those 2 years taking her to retirement and E121 after which you're home and dry.

You say you're not thinking of moving until next year and if your wife is well into 57 then you might be looking at taking up to a year off the time she has to carry on working.

As I say this is my understanding but the fly in the ointment is that there seems to be some disagreement as to whether a husband does automatically qualify as a "dependant" on an E106 or an E121 and there might even be an element of luck in it depending on how the individual CPAM offices operate.

As I say, simply food for thought.

Good luck. 

[Will]

What is certain is that if a husband is working, or has a pension (other than the state pension of course) himself, he will be very lucky indeed to be able to 'piggy back' onto a spouse's E121.

[rogerthedodger]

Thanks Will & ErnieY,

my wife is not 57 until next June & I hope she doesn't find this forum since her age is a state secret, to make it public is treason & I would probably be beheaded, which would at least sort the French healthcare problem! However, I really like the idea of continuing my practice-maybe a 'work'-shop called 'Growing old disgracefuly-the theory & the practice', which an old friend of mine said she would be interested in running with me-what fun that would be, with good food, drink as key factors. I've spoken to my accountant who has contacts with a group called 'Euro 2000' for French tax/contributions advice, have found a registration body in France for integrative psychotherapists & will seek advice from an old friend of mine who has a retreat/training premises in Basse-Normande.

I've also discovered that Angouleme to St. Pancras is 6.5-7.5 hours and 'from' only £109, it's looking good, & if only The Rams can beat Chelsea cold South Lincolnshire will be a much sunnier place!

All the best,

Roger

 

[Llantony]

Oh dear!  We were hoping to do exactly that - I get an E106 or E121 as I am already 60, and my husband who will retire next summer would be covered too when we move to France.  Are you saying that as he will be receiving a teacher's pension (only 28 qualifiying years out of 40 so not huge) he will have to pay for all healthcare in France? 

Is possible to get an insurance to cover 100% - and could we afford it?

[Ron Avery]

You will have to be more precise for an accurate answer, there is a hell of a difference in your future health care prospects in Frnce if you have an E121 as opposed to an E 106.

"Is possible to get an insurance to cover 100% - and could we afford it?" Not much about except English speaking companies hoping to jump on the health care bandwagon.  Can you afford it?  Don't know depends how rich you are[:P]

[Llantony]

Thanks for the reply.

Well, I am 60 and get a pathetic state pension, and am still working.  Husband plans to retire at 60, end of term next July. We planned to move over to France full time then & see how it goes. Have just downsized in UK and hope to rent to our son as won't be rich enought to keep 2 houses and come and go.

Someone suggested I apply for a E121 and my husband might be covered for basic healthcare as well.  I realise we'd need a top up insurance but it would help if some costs were covered. 

Yes, I realise it depends how rich we are, but as I indicated, not terribly.  What I meant was - would it be VERY expensive!

[chessfou]

Yes, it is very expensive (maybe it will get cheaper as/when/if insurance companies compete to meet the new demand). Budget €9,000 for a couple of 60 yr olds in "perfect" health (i.e. NO pre-existing conditions, no operations in last 5 years, prferably no visits to the doc in same period). You can get lower quotes but then you would be left in the deep squidgy brown stuff if either developed a chronic illness (above quote is based on €3,250 per person for realistic cover + 40% uplift) and even at €9,000 the chronic illness cover (limited to a total lifetime figure) could soon be exhausted (in some circumstances in less than a year).

Sorry if that sounds tough but it sounds even tougher to those of us already here.

On the other hand, if you just need a top-up, you can get a good one for about €1,500 (for the two of you).

[Llantony]

Not good news!  £6000 is likely to be around half our net annual income - so it looks as tho our long-held dream of living in France full time is not going to be possible.  I wonder if house prices will drop too, if fewer early retired Brits buy?  Having said that, many of those we know seem rather well off.

My husband  also had the idea of setting up a 'business' in France to get round the problem of healthcare.  I pointed out that some authority might notice if he didn't do much and made no profit.

 

[Ron Avery]

[quote user="Llantony"]

Thanks for the reply.

Well, I am 60 and get a pathetic state pension

If you get a UK old age pension then you will be entitled to an E121 when you move to France.

Someone suggested I apply for a E121 and my husband might be covered for basic healthcare as well.  I realise we'd need a top up insurance but it would help if some costs were covered. 

Good suggestion, follow it up. Your husband will be covered for 60-70% of health care costs as will you, as long as the UK DWP accept that he is a dependent on your E 121.  A mutuelle (top up) will cover the  extra, and there are loads of those around, but its not compulsory. 

Yes, I realise it depends how rich we are, but as I indicated, not terribly.  What I meant was - would it be VERY expensive!

If you can get an E121 you will not need private health care.

[/quote]

I like Lauzerte, very English looking countryside, we spent a holiday at Moncuq and friends have a holiday home in a small hamlet, nearly moved there, we stayed there and tried the agent in Lauzerte first when house hunting, we nearly bought a B&B with 12 acres of olive trees and grape vines, glad we didn't now!!

[Llantony]

Thanks Ron, that's really helpful - as I have a day off I might phone DWP.  Is the E121 time-limited?  My worry is that I'm very healthy at the moment but other half has minor problems (tho going for a heart check tomorrow) requiring daily tablet taking, which would be expensive and possibly a problem for insurance. 

Glad you like Lauzerte, we love it and have found it very friendly.  Our house is small and there is no view from the house though a great one from the garden above it.  I hope it won't be too depressing all winter long!

I wonder if Montcuq got on the new Monopoly board? 

[rogerthedodger]

Dear Llanthony, my understanding is that with the E121 on retirement you're fully covered for healthcare. If your husband is self-employed in France he can pay the minimum into the 'system' with low earnings & be covered-I hope so, 'cos that's what I need to do for my diabetes. However, we intend be permanently resident in France & are then in the French tax system, but if you still have a rented out home & pension in England life may be more complicated tax-wise. I don't have the answer but I will be talking to an accountant to make the best choice,

Good luck,

Roger

[Llantony]

Thanks Roger,

Very helpful.  Just hope CPAM agree that my husband is a dependent!