Starting afresh - getting the work/life balance right

[Mike1958]

Both myself and my wife are keen skiers and have recently brought a 5 bed roomed house in the Pyrenees. Though approaching what some would call middle age, we are relishing the challenge of a new life in France.

We would welcome some first hand advice as our intent will be to generate a small income from providing catered accommodation for walkers and skiers alike.

Reading all of the various forums on tax I believe that the "micro" would suit as in reality we are only looking to earn enough from the prime weeks in winter and summer to keep us for the rest of the year. My wife will have a small pension paid into a UK account, the rest will come from advertising our accommodation where hopefully our travel background will be of use.

On the basis that we are likely to earn either slightly more or slightly less than 25000E per year, is my understanding right that as a B&B/Chambre d'hote we would receive a 72% allowance for costs from income, and then from what is left (i.e. operating profit) we would have to pay tax/social contributions which on average equate to around 30%.

Based on the above have we thought it through correctly, or have we missed the plot.

Any pointers would be gratefully received.

Many thanks,

Mike

[Idealfrance]

The micro-entreprise rgime is not as ideal as it first sounds. For example, if you make a loss, you won't be able to deduct this from your taxes as only your turnover is taken into account. Don't forget that you'll pay income tax on the money you bring in, even if globally you operate at a loss.

You will also, I'm fairly sure, be exempt from VAT which, while saving a fair amount of hassle, means that you won't be able to claim VAT back on purchases you make for your business. Whether this will be a problem for you depends on your anticipated expenditure. Most people I know are avoiding this regime.

In any event, I can't emphasis enough how important it is to talk to a french accountant about your plans. He will be able to point you in the right direction for all the benefits you may be eligible for by creating a business.

A SARL or EURL (PLCs) may be the way forward to avoid the risk of losing all your personal belongings in case of a disaster.

I can give you the name of an english speaking accountant based in France if you like.

All the best.

Ben Symons
www.idealfrance.com

[Scotjohn]

Hi

I am going through the same process at the moment with our chambres d'hotes.

I think you have got it just about right.

I do agreee with the other reply about contacting a french accountant as everybody's circumstances are slighty different. There do still appear to be some ambiguous areas and the french accountant will probably check it out with his local tax guy who might have a different interpretation of the general rules.

Will keep you informed of any progress.

Good Luck

John

[Lf]

The Micro Entreprise is a very simple way of accounting and as such you don't need an accountant - you simply add up your bank receipts at the end of the year and they will count 30% as income (gites and B&B only). The 70% they give as operating costs is very generous. Cotisations are paid at a fixed level for the first two years and you have to pay them even if you have had no income which, I think, is where the problem lies for most new small businesses.

Regards

Charles
http://www.lesflamands.com/hr