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Regime Micro BIC under attack - reduced abattement and platform de revenue


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I am a gites and B&B owner and currently use the Regime Micro BIC (Simplier). This allows me to declare up to about 76,300 € revenue p.a. as income. Whatever my revenue, 71% is lopped off (this is the abattement). The remaining figure (29%) is then considered my business profit. That figure, my Revenue Impostable, is then subject to the many Social Security charges and Income Tax. This all comes to about 60% of the 29% of my revenue i.e. about 17%. So if I declared for example 50,000 € revenue my charges come to about €8,500. The advantage of this regime is that I have no accounts to submit. It is Simplified. While it is hard for me to know exactly what my true business costs are, I am confident for the time being that they are less than or equal to the 71% of my revenue. Put differently, I am confident that my profit is as good as or better than 29%. It is perhaps somewhere between 35 - 40 %.

However, I read today in "Accueillir Magazine n 18 November / December" that the goverment is reforming the Regime Micro BIC: "Project de loi de finances pour 2009 - Article 44 : Reforme du regime de la location meublee". As I understand it, if this (the B&B/Gites) is your primary activity (and thus make a reasonable livifng at it) you will be affected. The reform proposes to lower the abattement from 71% to 50%, and to limit the revenue to 32,000 € down from 76,300 €. This means that my social charges/tax would go up from 17% of my revenue to 30% (50% X 60%) AND that I am limited to declare no more than 32,000. For me this will be a problem since my revenue for 2008 will more than 32,000.

According to the article, I would have to modify my regime to the Regime Reel. This is a pain in the ass to say the least: full accounts, TVA, etc etc. I don't want to do this.

However, in the same magazine I am reading that switching to the new statut : Auto Entrepreneur might provide a solution...

Are there any people who are concerned about this sort of scenario and who have already found a solution. Of any people who have recently made the switch to the Regime REEL and actually done better out of it (i.e. making your profit appear less than 29% of your declared income?)

Any advise welcome. I plan to discuss this with my accountant ASAP.

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I don't know about gites, but for many types of business the regime réel is, financially, a much better bet than micro. You incur accountancy fees, but in return you can often pay significantly less in cotisations and taxes, as well as being able to reclaim TVA, as well as other advantages.

I doubt if the autoentrepreneur regime will suit you any better, this is virtually a micro business ('micro social' regime rather than 'micro general') with simplified registration procedures.

As you rightly say, the best person to advise on the best regime for your own business is an accountant. You may like to look at this link (in English) and the associated pages so that you are well informed before talking to the professionals.

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I have no idea how to run a gite and B&B business. What concerns me from your posting is that you are running a business with a turnover in excess of €32.000 and you have an accountant but you only have a "feel" for what your business expenses and profits are.

The lower figure for your "guestimated" profit (35%) is only 6% above the notional profit allowed under the scheme your are currently operating under. This would be far too close if I was running a business (which I'm not  [:D]).

As Will says the sooner you get your accountant on the case the better.

I appreciate this is an unsolicited piece of advice so ignore it if you prefer to do so.

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Will and Benjamen. Thanks for the quick replies and advise. What is also hard to figure is why my collective URSSAF and RSI payments to date for 2008 come to 85% !!! of my Revenue Impostable for 2007. This seems rediculously high. Anyway. A visit with the accountant is on the cards. Thanks again for your advise.

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You tend to only have a feel for what the actual profits are by virtue of the fact that a B&B in France is run from your own home therefore your own electricity, gas, fuel, water consumption are all lumped in with the business as well as other grey areas - if you're doing table d'hotes as well, in the true sense of the word then you eat with your guests, so again, how much are you eating and how much are they eating?  It all starts to get a bit speculative.
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It does. Though we basically do full food and board for groups so I can whittle away the unknowns better than perhaps some B&B's. Basically the accounts balance and we make a small profit after personal living costs to put away for a rainy day. But now that I ma 5 years into it I want to hone things so that I know that I am getting the best long term solution. Thanks for your time all of you.

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Alex - a lot of people in your situation seem to be looking at the statut auto entrepreneur, judging from French owners' forums.  On the face of it it's a good way of avoiding registering with the CdCommerce or Metiers if that does not suit you (if you're not already registered), as well as limiting the social cotisations payable. But I would not decide anything until after Jan 1st or whenever everything is finally signed and sealed.  The new statute MAY, if it goes through as planned, limit your social cotisations and so on to 13%.  I don't think it makes a lot of difference to the income tax situation, though I have not really looked into that aspect yet.

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