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Micro Enterprise


StephenM
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Hi

 

My wife and I are thinking about living in France.  I intended to register as a sole but was horrified at the cost of this whether of not I made a profit.  A friend has told me that I should register as a mico enterprise but was not able to tell me much more.

 

Can anyone explain more about this and what the costs are

 

Thanks for your help

 

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There really isn't much point in registering and working unless you're going to make some money, is there? As an artisan, gardener, hairdresser or similar running a micro your turnover ceiling is 27000 (for shops, chambre d'hotes etc it's around 76000 euros) of which in the first and second years you'll pay around 4000 a year in cotisations (health, pension and a bit to help towards France's debt).

Depending on your income from the first and second years your cotisations will be adjusted up or down in year three. There is tax on top according to your income but you do get a higher tax allowance with a micro as you can't claim expenses as you can with other tax regimes. Apparently things may change for the better, according to the French government.

Sorry, not explaining this very well - it's a bit late for me! The following website is a bit out of date but may help.

http://www.apce.com/index.php?rubrique_id=300000112&type_page=IL&pays=1
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If you have a family to support,mortgage to pay or need to earn a good amount then you will have to register as a full TVA artisan, the micro bic just won't support you. We take more than the year's allowance for the micro bic in one quarter and that just about pays some bills and buys a bit of food for the table but there is not much over for any luxuries. The more you earn,the more you pay in cotisations in France and these are adjusted six monthly in some cases depending on the accounts submitted,therefore it dosn't actually pay to make any profit legally because its taken away from you. The impôts do investigate businesses and watch them closely so you have to be careful. You don't say what you want to trade in or as, so presume if its in the building trades you need to decide before you register how much money you need to make so you get the right scheme. As for taking on employees, this is very expensive and you pay a good 90% of their monthly salary again in charges. The first two years you get allowances but then it hits hard. Not trying to put you off, but many brits have no idea of the system here and find they are in trouble later on for not get the right facts in the beginning.
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Hi

Thanks for your reply - it seems that to be self employed in France is expensive how ever you are set up.  Are intention was to import and sell - we were not intending to make a lot of money just to help our savings last longer.  Do you know if there is a way to trade without making up front payments?  If the company was formed in the UK I assume it would pay NI and PAYE in the UK but no charges in France ? we would just need a good medical insurance here, which we were more or less planning on needing anyway.

Thanks again

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Zeb,

Obviously I,m not the OP but I read your post and........ from what you say, if I (or my wife) could set up a micro to help with the existing retired income, She, we, I can make (say) about E 2000 / month after cotisations, less whatever additional income tax is required. This would certainly help defray expenses although it may not be enough to live happily on ever after. It is substantially more than the French minimum income levels.

Presumably (maybe not!) a lesser income would attract lower cotisations - or would it. Am I on the correct track here?

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Sorry if I mislead anyone. The first and second year's cotisations are worked out to a formula and in our case (and a couple of others I know) amounted to just under 4000euros a year (unless you can convince whoever you register with CdM, CdC etc that your turnover will be quite low, that's what you will have to pay, then hope for a rebate later on) - in my case garden and property maintenance.

If your turnover (and in our case this is mainly labour charges - we are not buying and selling)is at the ceiling for the first and subsequent years, your cotisation charges will be adjusted upwards accordingly from year three. I was hit a couple of months back for cotisation charges for 2004 and 2005 and given a month to pay them! As Val says, the more you earn, the more you pay.

If you are buying and selling, your micro ceiling is around 76000 euros and bookkeeping is a bit more complicated - if you are paying TVA on goods and want to claim it back then it's really better not to go for the micro entreprise, but the next tax regime.

However, as I said, according to recent news, things may change for the better if the government can agree a scheme whereby new micros pay less. In any case, speak to a local accountant (just for advise - don't sign up with one) and get the correct facts based on your proposed work and your region as there may be aid available for new businesses.

Val - I agree with a lot you say, but many of us without mortgages, children and employees can manage (just about) on the micro. It's much easier and less stressful (for those who have no need of TVA repayments) than running a firm which necessitates the added costs of an accountant. And, it's much easier to step up from micro entreprise to the reel tax regime plus TVA registration than step backwards.

Yes, as TU says, it's hard for small businesses in France and I buy the odd lottery ticket! But, the cotisations you pay cover you and your families health charges (you also have to have a top up insurance), and may give you a teeny pension one day.
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Oh Zeb you don't know what I would give to have a simpler life without all the paperwork and cotisations but we could not exist as we do now, perhaps when the kids are off our hands completely and the OH decides to slow down it may be better. Every artisan I speak to is in the same boat, peed off with supporting the country and nothing to show for the effort and interest charges when even a week late with cotisations. As for TVA reimbursements, we have had to wait over 16months for years since the 5,5% system came in to get our money back which was then instantly swallowed again by more charges and taxes. The accountant is a must for us because the tax forms are very complicated and not everything is a straightforward amount of TVA reimbursed. What I don't agree with here is the automatic increase in your health insurance and pensions when you have a standing order already just because you may have made a thousand euros profit the previous year which in common sense terms would normally be used to keep the business afloat or invest in new tools or a vehicle. Ah well, no good moaning,we made the choice to come here so must abide by the rules but folks should be thoroughly warned before they set out on the same journey just in case........
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