Is this legit income

[oberon]

Hi

I've been one of those voyeurs for a long long time now but have finally decided to make a post.  Mainly because I'm so confused by the bureacracy surrounding living in France!

We moved over here  permanently six months ago and are just about ready to start our first season of B&B.  I've had lots of help from the threads on this forum, from some other Brits in my area with B&Bs and others with gites but sometimes it conflicts with what the authorities are telling me and sometimes they conflict with each other, but I'm sure that will be no surprise to some of you old-timers!

My siuation is this:

We have two bedrooms to let as B&B.  I have a SMALL pension from the UK - not enough to live off but enough to pay quite a few of the substantial bills, and I also "own" another house locally, which my dad and his wife are living in.  What I mean is, my dad bought it, but to lower the amount of inheritance tax I will have to pay he put it in my name with a usufruit on it.  Now because of the low threshold and high tax on inheritance if my step-mum outlives my dad, they would rather help me out now than risk my having to lose 60% of my inheritance in tax.  Consequently they want to pay me a monthly rent on the house by way of getting rid of some of the money early.

My pension and the rent from the house will end up being more than 50% of my annual income, which I believe is the magic figure for having to register a B&B with the chambre de commerce.

So my question is:

As I have less than 5 bedrooms for B&B and the income (if you take into account my dad's rent) will be less than 50%, will I be legal by not registering and merely declaring my income on my tax form as a micro-entreprise?

One other point, a lady I met recently said that all I have to do is go to my local tax office and tell them I am going to do B&B and they will register me as a microentreprise and send me a siret number within the next couple of weeks.  She says I need to have the siret number to put on bills and things.  However, another lady told me that I will only get a siret number if I register with the chambre de commerce and then I will have to pay something like 4000 euros a year in cotisations, which is probably going to be as much, if not more (!!!) than I'm going to earn through the B&B.  She thinks the first lady may have got her number without registering because she was a teacher in the UK and has a pension which is more than half her income. So now I'm totally confused and a bit worried about doing what she did, in case they tell me that I can't count the income from my dad's house and then I presume I would have to register.

Please help - I've tried the archives but I don't think anyone else is in this situation.

[Gastines]

There are 57varieties of answer to this question, as you will see from my previous posts. We were told ,after registering with the H.d.Impots, that it was obligatory to register with the C.d.C. and they sent us the relevant paperwork from Paris to back it up. It states if you provide any service, ie. clean linen/coffee/breakfast/clean the rooms you MUST register. Which we have done for year 3. Yoy will get hit with about 3500/4000 cotisations,BUT, you have to have health cover anyway, take that out, you will have to go into the self employed regime of accident ins. + pension system.Don't forget to alter your house ins for public liability.When you submit your tax return, if your income is fairly low, you will probably get part of your URSAFF payments back.

However you do have the choice of not registering as the rules seem to vary per square Km. in France, or you could let your guests sleep in dirty rooms with used bed linen,dirty towels and tell them to get their own breakfast.

And no, it's not our only income but yes it is in France.

Trust you find this helpful.

Regards.B&B St.Malo.

[oberon]

Thanks for the response Gastines - it seems a lot of people have had a look but no one else has been able to give me an answer, even though, perhaps cos I didn't make myself clear, you haven't answered the bit I really want answering.

You're sure right about it being different in every bit of France. Here in Calvados I've already been told I only have to register if it's my main income (well one person at CPAM told me that, another at the tax office said I didn't need to!)  And with the kind of cotisations mentioned to me, which you seem to be confirming, I just couldn't pay them and as I have an E106 valid for the time being, I don't think I will register with the CdeC for this year at least.  What I really need to know is whether rent from a house, along with my pension, would be regarded as legitimate income (and whether you have to regiser to rent out houses anyway!)for the purposes of making my B&B income the secondary one.

Thanks too for the reminder about public liability.  I already have that arranged on the house insurance.  I was pleasantly surprised at how little it added to the premium!

[Will]

I think that the tax people regard B&B and furnished letting identically, and if letting is your main source of income then you will be expected to register it as a business and pay cotisations.

The reason you have not received a definitive answer yet is because nobody here knows. This current topic http://www.completefrance.com/cs/forums/645652/ShowPost.aspx asks something rather similar, and in the past we have seen countless different interpretations of what you are required to do.

Sorry if this sounds unhelpful, but if anybody does have what they feel is definite information please post it here as many forum users want to know.

[le bouffon]

A good rule of thumb is if you live in France and earn anything here in france it is taxable,pension interest gite income etc from where ever in the world,there is a pink form obtainable for the hotel des impots near you on which to declare it on.

[Coco]

Interesting that you say it's all the same Will because neighbours of ours whose sole income is from gites have done everything legally but haven't been obliged to register anywhere or pay anything more than the 8% towards CPAM.

Le Bouffon, I don't think obron is asking about whether he has to pay tax, it's the registering thing he's concerned about, and knowing how expensive the cotisations are, I don't blame him for wanting to only have to declare for tax purposes rather than join a CdC with all the implications that has.

[le bouffon]

Sure will will agree that you do not now need a CdC.

[Will]

Le bouffon is quite right. We have done B&B quite legally without registering with any C de C, and as far as the impots are concerned we were told by them to declare it, as a separate micro-bic from our other income, as furnished lettings. We have also paid taxe professionelle as a result. Our accountant is quite happy about this too.

The big difference between us and many others is that we already pay our full, bloody heavy, cotisations through self-employment and salaried jobs, so we can legitimately count our B&B as a spare time activity. I can quite see why others, without other similarly earned income, might be expected to register as a business in order to allow the French government to collect its pound of flesh from them too.

Having said that, a lot of people seem to get away with running B&B or gites without registering even when they have no other financial activity giving rise to cotisations. Others, as shown in other topics, seem not to be accepted by their CPAM for medical affiliation if they have any business income, which includes B&B. It seems to be yet another of those regional variations, or maybe it depends on whether individual bureaucrats are having a bad day or not.

[Quillan]

We have a small income from the UK which accounts for around 25% of our total income, the rest comes from our B&B business. Having been very confused by statements made on this forum (four years ago) and by others we decided to take an interpreture and visit Chamber of Commerce (C of C), Duane and Tresor Public. The C of C gave us a big sheet of paper and told us they wanted some money to register but first we must produce a residence card (CDS). The prefecture would not do this as Brits no longer required them. We all now know that we can get them or something simular but the law had just been changed, there was a lot of confusion and we were told we couldn't have one. We went back and forth with letters between the C of C and the Prececture to get one in the end the C of C told us to go away as we didn't need to register with them anyway (are not the French brilliant at times).

The tax man was good, we went through everything with him. He gave us all the tax back on our UK income then placed us in the Micro Biotic system for tax purposes. We are so, so, much better off than we ever were in the UK tax wise. We can stay in this system to a maximum income of 72,000€ (or is it 78k I can't remember and the posibility of us reach 70K a year is very slim) we get a 70 something  percent tax relief (I think we get taxed on 28% of our income) and thats after our tax allowances have been taken out. We never paid tax for the first two years (didn't earn enough) nor did we pay any cotistations, Tax de Habitation and something like 60€ Tax Froncier. We have and had to pay for our top up so not all our medical was free plus we pay (like everyone else) our 10.1% CDS etc. Last year we did pay as we earnt a lot of money (well it was for us) the year before but it was not very much really and I am very happy to pay my share. I feel that wherever I live I will work and will therefore have to pay tax to somebody so whats the point trying to evade the issue. All my money now is in France and I hide nothing from the tax man or aybody else and it has actually saved me a fortune.

If I had listened to everyone else the whole thing would have cost me anything between 7,000 and 10,000€ over two or three years with cotistations etc. So my tip don't bother with the C of C go straight to the tax office and speak to them and be honest with them. Once you are in the system all sorts of doors open for you.

Don't forget to visit the Duanes either as you need a licence to serve tea, coffee and orange juice with the breakfast. If you flog booze with your evening meals (or even give it free) you need a licence. In my area they are 100% free in others I am told they make a small fee for the paperwork.

Good luck

[oberon]

That sounds more like it Quillan.  I want to be legal and I don't mind paying tax on what I earn if I've reached teh appropriate thresshold.  What I was worried about was paying these dreaded cotisations on "potential" earnings that I hadn't got.

So did you get a siret number then, like I was told?  Also, this lady told me that I just put my earnings in a certain box on the taxform and she said she'd show me when they come out and that would automatically put me in the micro system.  Or do you actually have to register to go into it and fill out yet more wonderful French forms?

Thanks

Oberon

PS  What about the health contributions?  I've ot my E106 at the moment but when that runs out will just being registered with the tax office as a microbiotic get me the 60% (or whatever it is) health cover and will I have to pay something towards that?

[Quillan]

You get the number by registering with the C of C which you don't have to do.

Go see the man at the tax office and tell him all, he will then sort it out for you and tell you where to put your income. You MUST give proper bills with names and address's on them and you MUST keep a copy of every one. At the end of the year you add them all up and thats what you put on the tax form. To DO NOT have to keep any reciepts for things you buy, thats what the 70 odd % allowance is for, your running and material costs.

Your cotistations will be calculated on your earnings. You will pay 10.1% on all of it and depending how much you make will dictate how much cotistations you actually pay. I did calcualte and estimate that if you earn less that 17,000€ (as a married couple) under this system you don't pay anything and get your health cover free.

[oberon]

Thanks for the help.  I got my petit licence from the duanes as you advised - although they didn't seem to know what I was talking about at first, til they asked their boss!  I went to the tax office (only spoke to the receptionist) but she told me to come back in May when they will have some advisors there to help.  I thought it was Feb/March that the tax forms are done????

We had our first guests in on Friday for two nights and all seems to have gone very well.  They came from Northern Queensland and were very appreciative of my freshly squeeze orange juice.  They said it was the first they had had since they arrived in Europe [:D]

[thatmole]

I've just read your postings with great interest, as I'm hoping to move to France from Spain later in the year to set up a B&B and was very worried about the infamous cotisations sociales..  I'd just like to say thank you for de-mystifying the minefield and putting my mind at rest!