B & B Should we do micro bic or reel simple ?

[Doris]

we are just about to start up & well into the renovation our plan was always to B &  B & table d'hote should we start up in the micro bic system or go straight for the Reel simple & try to claim back some TVA along the way ?

[Eslier]

There's not, as you might have guessed, a simple answer to this question and you'll probably need to consult an accountant to get the best advice. In fact, there are several questions here:

Firstly, the old favourite: do you need to register at all. In theory the answer to this will only be yes if the B&B is your main source of income in France but, if you read through other threads on this subject you will see that different people have been given different advice about this by officials in different areas. Just look up the posts by "gastines" to see how complicated this question can become.

Next, if you end up registering, the choice of regime is quite complex.  If you've had a lot of start up costs, including renovation, then with the reel regime you can write these capital costs off over a period of three years offsetting it against income which can be a big advantage. Your accountant might be able to show a zero or very low profit on your accounts which will mean you don't pay any tax and get other benefits. On the other hand the micro is very simple to operate and you don't have to worry about keeping every receipt. If you don't have a lot of start up costs to write off then you may find you pay less tax with the micro. Get an accountant to look at your accounts so far, your personal situation and your cashflow projections for the coming year and see what advice he or she can give you.

Finally, the question of TVA.  You aren't required to register for TVA until your turnover reaches 72000€.  It seems unlikely that a B&B restricted to 5 bedrooms will generate that sort of income so it's not something you should need to worry about. If you were to choose to register anyway then don't forget that as well as being able to claim back the TVA paid on purchases relating to the running of the business, you would also have to charge TVA to guests for bookings which might make your rates uncompetitive.

Good luck with your venture. I hope this helps and I'm sure you will get lots more advice.

[Quillan]

"Firstly, the old favourite: do you need to register at all. In theory the answer to this will only be yes if the B&B is your main source of income in France but, if you read through other threads on this subject you will see that different people have been given different advice about this by officials in different areas. Just look up the posts by "gastines" to see how complicated this question can become."

The law is actually quite straight forward. If you earn more than 23,000 Euros (before tax) per year you must register your business. If you earn less than 23,000 Euros (before Tax) and the sum is either equal or greater than 50% of your total income you must register. Like Eslier says however it's how the law is translated locally. This and other information is available in a booklet issued anually called Les Locations Saisonnieres en Meubles by the Ministere de L'Economie des Finances et de L'Industrie. This booklet covers both Gites and Chambres D'Hotes. If you join either Gite de France or Clevacances you should recieve a copy every year (well we do in Aude). I am currently translating it in to English so if you PM me with your email address I will send you a copy when it's done. I have a scanned French version as well.