Enreprise Individuelle - is there a better way for us?

[Wisigoth]

Can anyone help us – we feel like we’re wading through

treacle [8-)]. We have a very young French accountant, who seems to know what he’s

doing, but the reason we’ve come to the forum is that he doesn’t make

suggestions on how we could be more cost effective. Every now and then we think

there must be a better way. 

 

The bulk of our gross comes from a Holiday Enterprise

(Chambres d’hote with lessons), which we set up three years ago with some

administrative help from the CCI. We are an Entreprise Individuelle as our

total gross takings border the €32,000 threshold of the Auto Entrepreneur.  We collect our guests from the airport and

give full board and educational outings and lessons for seven days. Last year

we grossed about €2700 a week for ten events but the costs are high.  To a lesser extent, we also sell lessons

over the Internet and give local private lessons, both of which have relatively

low costs. 

 

Our gross for last year was around €30,000 and after

deductions including €7500 in tax and social charges, our net was €15,000 [:(]  .  

 

Taxes are-  5% of

gross plus taxe de sejour on the holidays, 19.6% on the internet lessons and 0%

tax on the lessons attended by locals.

 

Social charges are about 35% of our annual net after

deducting food, petrol etc.

 

I read on the forum that gites and chambres

d’hotes only pay 12% social charges and it just made me wonder if there would

be a better way for us.  Can anyone help

or suggest an organisation that could advise us?

[Albert the InfoGipsy]

Not only do gites and chambres d’hotes only pay 12% social charges, but their AE turnover limit is much higher. And AE's don't need accountants.[8-|]

Have a look at the AE guide, particularly page 23:

http://www.pbss-uk.com/AEGuide_March2009_EN.pdf

[Wisigoth]

Thanks for the help - it was very kind of you to take the trouble. I cast my eye over the link you sent (I struggled to understand it even though it had been translated into English) and  I emailed the accountant to see if we could split the business into two separate businesses "his 'n hers".  I could have the Chambres d'hote business and my OH could have the teaching part.  He ignored that suggestion (at least I think he did- my French is good but I'm lost with jargon whatever the language).  He basically told us we oughtn't to bother as it's not 13% after all, it's 21.3%.

 " Le

taux de cotisations pour les prestataires de services n’est pas de 13% mais de

21.3% d’où cotisations à payer = 30 000*0.213 = 6 390

€

  Pas

vraiment de gains"

He pointed out that last year our total takings were 32 600, which is 200 euros over the Auto Entrepreneur ceiling so we couldn't be an AE. 

When we set up the business, Chambres d'hote plus extras, we did it though the Chambre de Commerce and they never mentioned 13%.  They said for the system we first went on, where we didn't need an accountant (microbic, I think), they told us the tax and social charges would be 45% of 45% (which is 20.25%) of the gross.  Is there really anyone out there paying only 13%, or is it a myth, as our accountant seems to suggest .  If anyone can tell us how to do it, they are a genius.[8-)]

[Wisigoth]

I've sat down and done my best to get to grips with the superb info link

you sent (especially p23) and looked at a few other sites in French and

in English and I do believe I'm starting to understand it.  What

puzzled me was knowing the difference between Commerce and Service and

understanding where we fall.  I think its mainly Commerce (for the

Chambres d'hotes) with a bit of Service for the rest.  So it looks like

we can turn over up to 80 000 euros for the Ch D and up to 32 000 for

the other bits and pay 13% charges on the Ch D and 23% on the rest.

It seems our accountant thinks that Chambres d'hotes comes under Services so I've sent him links to websites which suggest that they don't.

There's been times, like when we got a 7 000 euro bill in November from

the RSI  and another one for 665 euros this February that we weren't

expecting on top of our regular payments, that we've thought of packing

it all in and leaving the country.[:(]   My OH has been telling me to

give up on this but I really feel I'm nearing a breakthrough. I'm

swinging between thinking the accountant and the CCI have both got it

spectacularly wrong ..... (scary) ..... and we've paid thousands more

than we should have done in the last couple of years (and will continue

to do so this year), but on the other hand, surely they can't both be

wrong as its their job to understand businesses and charges involved.  I

notice that this forum has had lots of views.  I expect the accountant

will reply to my email this week so I'll let you all know how I get on.

[Albert the InfoGipsy]

[quote user="Wisigoth"]Thanks for the help - it was very kind of you to take the trouble. I cast my eye over the link you sent (I struggled to understand it even though it had been translated into English) and  I emailed the accountant to see if we could split the business into two separate businesses "his 'n hers".  I could have the Chambres d'hote business and my OH could have the teaching part.  He ignored that suggestion (at least I think he did- my French is good but I'm lost with jargon whatever the language).  He basically told us we oughtn't to bother as it's not 13% after all, it's 21.3%.

 " Le taux de cotisations pour les prestataires de services n’est pas de 13% mais de 21.3% d’où cotisations à payer = 30 000*0.213 = 6 390 €

  Pas vraiment de gains"

He pointed out that last year our total takings were 32 600, which is 200 euros over the Auto Entrepreneur ceiling so we couldn't be an AE. 

When we set up the business, Chambres d'hote plus extras, we did it though the Chambre de Commerce and they never mentioned 13%.  They said for the system we first went on, where we didn't need an accountant (microbic, I think), they told us the tax and social charges would be 45% of 45% (which is 20.25%) of the gross.  Is there really anyone out there paying only 13%, or is it a myth, as our accountant seems to suggest .  If anyone can tell us how to do it, they are a genius.[8-)]
[/quote]

The entire problem is that your accountant doesn't understand the way that that 'commercial' activities are treated under AE and how they can be combined with service activities.

Point him at this document: http://www.lautoentrepreneur.fr/images/3_Guide.pdf

It's the original French version of the guide I recommended. It is quite clear that you can split your turnover within a declaration, so your service activity has a limit of 32,500€ and the commercial (including gites & TdeH) has a further allowance up to a total of 80-odd thousand.

If he is incapable of grasping all this I suggest that you ditch him and go straight to URSSAF for advice about registerting as an AE. In fact, go there anyway.

The rest of the government AE site is worth looking at as well:

http://www.lautoentrepreneur.fr/

The 13% rate on turnover is equivalent to the rates for a commercial Micro, which benefits from an abattement of somethging like 70% (IIRC). It's just expressed differently.

Have a look at this:

http://www.apce.com/pid846/regime-micro-entreprise.html

[Wisigoth]

Hooray [:D][:D][:D][:D][:D][:D][:D][:D][:D][:D]

The accountant wrote back this morning and admitted he was wrong (bless him).  He didn't realise that Ch D came under Marchandises.  I can just imagine how bad he felt when it dawned on him [:(] as our decision to not become AE this year was based on how close we were to the threshold of 32 600.  He's very young and probably just out of accountancy school.

However,  onward and upward. We have to continue on the present scheme for the rest of the year but we will put through every expense we can think of to make sure we don't need to re-equip next year, when we will become an AE.

A big THANK YOU, Albert for your wisdom and support.

[idun]

Sorry but change accountants. Any french professional should be the best in the world with the amount of 'studying' they have to do.

They are not ofcoruse, but they should be. So get one that 'knows' their stuff. What else is this one missing. Remember it is 'their' system and an accountant should know it inside out. You should not be 'telling' your account.

[cooperlola]

I have a feeling (although I can't put my hands on the documents I signed at the moment but I think it is in the contract you have to sign when you employ an accountant) that if you get poor advice, then you have recourse via the accontant's professional body to make a claim against them.  It's probably more trouble than it's worth (as so much of this stuff is) but meanwhile, I would do what Idun advises.The younger he is, the more up-to-date he should be, n'est-ce pas?  What do you pay him for but to know the system?

[Wisigoth]

We're stuck with the Entreprise Individuelle for the rest of this fiscal year and we might as well stay with these accountants since we've already started sending our expenses to them. After that we'll be an Auto Entrepreneur and we won't need an accountant.  I agree, you would expect an Expert Comptable to know his stuff as they charge 1000 euros per year, but I'd definitely say to anyone who's thinking of employing an accountant (compulsory, I believe, if you are on the Entreprise Individuelle or Benefice Réel), to get a recommendation from someone in a similar business if possible.  It was my hairdresser who recommended this company and I don't think they have ever had anyone with a "Board and Lodgings + workshops" based business.

As for recourse, no way.  He's still telling us that we are better off on the exsisting scheme as we can deduct our expenses.  However, we have to fight to be allowed to claim anything other than the basics. One example I fought and won, was provisions for the swimming pool, which we've no time to use ourselves as we're too busy with guests. As for the old caravan we bought solely so we could give up our own room to guests during the season, (it's never moved since the day we bought it and I don't think it could), - we were told that there's no way the authorities would allow us to claim for that as it would be counted as personal. It was early days and although we shouldn't have, we accepted that, but I wish I had thought of asking him if that meant that the income for the room we are vacating is also personal.  We're deducting everything we can possibly think of now - we're going on a city break for a few days in connection with the business where my OH will be honing his professional skills and  researching a book he's planning to write.  I mentioned to the secretary that I would be sending in the hotel and air ticket costs and she looked horrified.  "Mais non, c'est personelle" she said. I'll make a stand, when the crunch time comes.   Another bugbear is that we have to eat regularly in restaurants with the guests (we go to the same places every week and get sick of it) yet we cannot claim for our own meals.  I'm sure eating out with clients in the UK is a legitimate deductible business expense.  

We never had an accountant in UK but I always thought they suggested ways to save you money instead of finding ways to stop you claiming. 

Well, that's my whinge for the day.  We love living in France and even with this struggle, we wouldn't swap.  I hope others can benefit from our experience.