Self employed taxation

[audiop]

Would someone be good enough to clarify the situation for me regarding taxation on income for self employment under the micro regime ?

As far as I can gather one has to pay three sets of charges - national insurance, healthcare, and tax. Is this correct ?

Are the tax classifications/bands/rates the same for self employed as for employed ?

[Cassis]

You should find what you want to know on the sites mentioned on this other thread.

http://www.completefrance.com/cs/forums/854909/ShowPost.aspx

The http://www.mamicroentreprise.free.fr/ site mentioned there seems pretty good, especially considering it's hosted as a personal site.

[Will]

The systems in Britain and France are totally different.

An employed person in France gets salary, less deductions, corresponding very roughly (in purpose, not in amount) to NI in Britain. In Britain you just pay NI, and even for the self employed this is collected with tax. In France separate payments are made to various bodies, i.e. health, unemployment, retirement, family allowance, training, national debt (I am not joking), etc. Last time I saw a French pay slip there were someting like 16 separate items listed. Some of these are paid by employee and employer (with employer usually paying a larger proportion), some by employer alone, but they are still listed on the pay slip. The employee then has to pay tax, in arrears - there is no PAYE in France, though there is talk of bringing a system in. The employee loses about 20% of salary in these deductions (plus tax, later, which will probably amount to a further 20% or so). The employer has to pay the equivalent of about 40% of each employee's salary as contribtions. So you can see one reason why taking on staff in France is not something to be entered into lightly.

A self employed person has to make most of the same payments as the combined employee/employer contributions, though in the case of an individual the amounts are less. Nevertheless, our accountant advises that 46% of your taxable income goes on these charges, known as cotisations. Exactly what you pay, how much, and to whom, depends on the nature of your work. Farmers, gardeners, etc will pay the MSA for example. There are several caisses dealing with primary medical assurance (not to be confused with the optional complementaire, also known as (misleadingly) mutuelle, or top up medical insurance, which you are also advised to take out) and with retirement (vieillesse). Giving my own case as an example I make three separete payments every three months or so, one to the primary medical insurer, one to the vieillesse, and one to URSSAF (which cover all the other items). These are compulsory, whether or not you are likely to benefit from the French retirement system, for example. Tax is separate, again.

There is a lot to take into account, and a lot that can go wrong, and it can be costly if it does go wrong, so you would be well advised to use an accountant. You will almost certainly find that the accountant will more than cover his fees by what he can save you on cotisations and tax by choosing the most appropriate regime and claiming the appropriate allowances.