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Should I be paid a wage in our B&B


pollyg

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Hi everybody,  My first time here and I have a questions.

My partner and I are in the process of buying our first B&B in Duravel - SW France - in the Lot region.   

Being an independent person I would like to earn my own money.  It has been mentioned to me that my partner should pay me a wage for helping to run the B&B.  We are not married but see our future together doing this.  I am told that I should cover myself in case the relationship doesn't last or something happens to him, [:(]  especially in the light of the French inheritance taxes. 

What are the logistics of doing this?  He is putting in all the finance, but I shall be helping to build up the business as well as doing all the admin work.  We did discuss dividing the business money equally, but I don't want to have this come between us and have to constantly ask him for money.   Should we declare the B&B a company and how easy/difficult is that to do?  What are the advantages?  How would he go about paying me a wage 

I appreciate all and any information you could throw my way, please.  I can be emailed at paulineg34@hotmail.com.

Regards.

Pauline

 

 

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Why not have a business account for the B&B and have money from that transferred monthly to your separate accounts? I should go for equal amounts as isn't that what a partnership is all about.

I don't think it (receiving a wage from your partner) will make any difference to the French inheritance laws. Unless you've had things sorted out otherwise, children or parents will inherit on the death of whoever's name the property is in (I hope it's in joint names). I also hope you got good legal advice on that one before you signed. It's a b++++y minefield!

Edit: Meant to say welcome and good luck!
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God forbid that my wife (Judith) ever reads this thread.  She might even put in for a holiday.

Zeb, if the OH is putting in all the finance to set this up, don't you think said half will expect more of a take?  Equal amounts would be fine if both were financing the deal but that's not the case here.  I totally agree on the inheritance side, by the way.

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Pauline, there are far more questions here than you probably imagine.

Firstly, if you aren't married then the whole question of inheritance is far from straightforward and you should seek professional advice to find out exactly what your position would be in the event of something happening to your partner. French law is very different from UK law and simply making a will doesn't necessarily help. Keep an open mind and if getting married is an option you would consider then that might be an easier course of action.

Secondly, if your B&B is your only source of income here (and you think the income will be more than a bit of pocket money) then you may well find that you area obliged to register as a business anyway whether you want to or not. This is such a grey area and if you search through the forum you will find many discussions on the subject which prove that the answer is inconclusive. In different areas you will find the law interpreted in different ways. Again, you will probably be best off seeking professional advice from French accountant.

Thirdly, your partner needs to avoid having anyone as an "employee" if he can possibly help it. The equivalent of employers NI contributions here will mean that for every 200€ he is paying you he will end up paying almost another 100€ to the government.

Fourthly, B&B businesses can be quite difficult to earn a decent income from if starting from scratch. Unless you are very lucky and have invested quite a serious amount of money to set yourselves up, it is unlikely that you will see much of a profit (if any at all) for the first couple of years at best. Taking this into account then you may be worrying a little too much at the moment about how to split the money up.

My advice would be to first, take a long hard realistic look at your business plan and cashflow predictions, not forgeting to factor in cotisations, health top-up insurance etc. If you still think you will be making sufficient profit to take formal steps to divide this amount then talk to your French accountant who will advise you how the business can be set up with division of profits. Just be certain that you don't end up paying out so much in cotisations and accountants fees that there aren't any profits left to divide.

Good luck to you both.

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[quote user="Eslier"]Thirdly, your partner needs to avoid having anyone as an "employee" if he can possibly help it. The equivalent of employers NI contributions here will mean that for every 200€ he is paying you he will end up paying almost another 100€ to the government.

[/quote]

I would say it is more than that, even with CESU I pay nearly 80% again in social contributions, I'm sure it is more for a permanent employee, more like nearly 100%again.

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Without wishing to dampen your enthusiasm, if you really are running a B & B - as opposed to a hotel - the chances of you earning enough to pay anyone wages are not great - pocket money would be more like it.  We have 4 rooms (2 doubles and a family suite), are pretty busy but once we have deducted expenses and paid charges there is little left.  In fact, my husband has a salaried job to keep us!!  The B & B enables us to live in a house that we could not otherwise afford, but it is certainly not a living wage.  The turnover with B & B - even in the main season means that it is rare that all 4 rooms are full, people left this morning and we have a large party arriving to take all the rooms tomorrow - so unless there are any passers by we will have 2 rooms empty tonight for example.   Someone called earlier, but we couldn't take them as they wanted 3 nights and we only have one night free - irritating but that's the way it is.   Outside the main season we often only have 1 or 2 rooms full - which is just as much work for not so much money.  The downside of having B & B is that you have a large house to heat and maintain whether or not you have guests.

I think you need to get some expert advice on the inheritance side of things and make sure your business plan is realistic.  Some areas (ours for instance) have had a big downturn in tourism this year due to various factors and unless you are in an area with an exceptionally long season - the Channel ports, Cote d'Azur or the like I would not look to guarantee more than a 25% occupancy if I were you - and even then you will have to work hard at it.

Not trying to put you off, just being realistic.  Good luck with it all.

 

Maggi

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