Auto-entrepreneur

[Pauline]

Hi, could anyone tell me if a gite or B&B is a suitable business under the AE regulations and if so could this be in joint names? Thanks Pauline

[Fi]

Don't know about the the joint names, but I run our gites as an AE and it works well.   Depends on your projected turnover though - think the upper limit is 32K.

[Will]

Autoentrepreneur is for sole traders only. If you want to operate as a partnership you should find another regime (e.g. SARL).

[Pauline]

Thanks Fi and Will, It doesnt have to be joint and this may sound awful but certainly not intended to but we are looking at it as a way of getting over the problem of the healthcare system, my hubby Mike took early retirement 2yrs ago with the plan to move to france but we have only just sold our hse so he cant get a E106 because he hasnt payed NI for over 2 yrs, he was also diagnosed, treated and has been clear of prostate cancer for 2 years, he is 56.(we expect he wont get health ins for any cancer related condition in the future (hope there isnt any) I am still working so will qualify for a E106 but will have a gap of 3yrs before the E121 kicks in so we wondered if this might be a way of getting us over the problem, Mike can do web design and anything IT related so I guess he could do a business around that.

[Sprogster]

Pauline, on the 'other' French forum there is a post from a lady headed 'Lost the will to live', whereby she has registered an auto-entrepreneur business and got her Carte Vitale, but cannot get coverage for her husband, as it appears that you can only register one person for health care under this scheme.

The French authorities no doubt have cottoned on to this as a bit of a loophole and are being difficult as a result.

[EmilyA]

We registered our gite business three years ago under micro-entreprise with OH as main registration and me as conjoint. This gives us full health cover. The cotisations are high, but by going to see RSI we have always had them based on real income rather than the notional figures, which can make the cotisations higher than earnings in a small business in the first three years. The minimum seems to be about 1800€ per year for the two of us. We started it by going to the Chambre de Commerce who told us that we needed to offer gite rental plus a service to get full cover, so we added bicycle hire to the registration. The process of registration with RSI was long and slow, but we got there in the end and got our cartes vitales after two years.

Hope this helps.

regards

Em

[Will]

It should be possible to register the business and opt for the micro-bic tax regime which allows a conjoint collabrateur, i.e spouse or civil partner. You can then change to micro-social, which has the same pay-as-you-go payment scheme as autoentrepreneur. You don't appear to be able to opt for micro-social from the outset (other than through the autoentrepreneur scheme) though somebody may have found otherwise - there is still a lot of confusion among French officials about these comparatively new schemes.

You can only change to micro-social at the end of a calendar year (i.e. Dec 31, the end of the French tax year) - whether you can do so this year, or whether you have to wait until you have been in business for at least one full year is not clear.

You may get hit for high cotisations in your first business year - most businesses do, though they can be reduced if you know the system well and/or get a good accountant to plead your case. But in any case, it should be less than the alternative, which would be full private health insurance for your husband, whose existing condition will make this difficult, if not impossible, to obtain.

Note that if you are working in France your E106 will no longer be valid - E106 is for people who are not economically active, or who continue to be employed in UK, and pay NI there, while working in another EEA state. It might be worth considering whether your husband may be able to get cover as ayant droit on your E106 while it lasts. You won't have an income of course, but there's not a lot to be made from gites at present.

[bannie]

Pauline, is it possible you could investigate whether your husband could just pay for the last 2 years NI he has missed so he qualifies for cover. I've just been advised to keep paying (self employed Class 2) when we move over next month so I can get cover until I reach retirement age.

www.direct.gov.uk/pensions

[Will]

The NI additional voluntary contributions (class 2 and class 3) are merely to maintain your UK state pension rights, unfortunately they have no bearing on health cover.

[EmilyA]

We didn't have to change to micro-social from micro-entreprise to get our cotisations reduced in the first three years and we don't have an accountant. We just went to RSI with our projected income for the first year and a spreadsheet of our actual takings for the second. The reduction was agreed by the lady on the front desk without any difficulty. What you can't do is give a much lower projected figure and then exceed it, because this will mean penalties.

You do need to speak French, though.

 

[Will]

The micro-social regime has only been in existence since, I think, 2008; the current version was introduced at the beginning of 2009 when the autoentrepreneur status was launched.

You did well to get RSI to agree to reduced payments under the old regime - speaking French no doubt helped in your case. You also did well to get a helpful RSI official. Unfortunately most seem to be less well-disposed. If you speak good French and can be firm and persistent, but polite, you will generally (though not always) get what you want. Unfortunately too many people, particularly if their language skills are not great, are too easily intimidated. Hence the desirability of an accountant.

You are dead right that under-estimating your turnover can result in being penalised.

It's always worth taking a bit of advice from an accountant or other qualified professional to make sure you have chosen the right regime - perhaps not as important in a business like gites as it is in selling products for a commission. Some people have gone for autoentrepreneur, or micro-entreprise, only to find that the turnover-based charges have all but wiped out their profits; a réel regime, which uses your real costs rather than a notional percentage of turnover, is more complicated to run but can be a better option financially.

[Pauline]

Thankyou all for your replies. I am going to read through them all and will no doubt have some questions from this extremely helpful and knowledgeable forum.