Dinks Posted September 11, 2008 Share Posted September 11, 2008 Have I correctly understood that under this new 'regime', if you set up a 'service' business, the Govt will take 23% of your turnover in social charges and taxes?! I cannot for the life of me understand why charges are not based on margin as opposed to turnover as any business has to cover direct costs, overheads, pay etc..... am I missing something? Link to comment Share on other sites More sharing options...
Albert the InfoGipsy Posted September 11, 2008 Share Posted September 11, 2008 Yup! You're missing something. The Autoentrepreneur schem is aimed at simplifying matters. It includes a default ('forfait') allowance for expenses, which means that you don't need to provide detailed accounts for everything you have paid out against the business. If you calculate that you would be better off charging your real expenses against tax then there are other regimes you can use.I have a similar situation with UK VAT. I have opted for flat rate VAT, which means that I don't need to add up the VAT elements of all my company expenditure. All I do is total my turnover (from my invoices) and multiply by 13% (this varies according to what sort of business you are in). Because most of my operating costs are non VAT (train fares, for example) I calculate that each quarter HMG takes several hundred pounds less from my company than it would under standard VAT accounting.Similarly, when I transfer my operations to France I shall have fairly low expenses for my turnover. As these are less than the forfait I'll actually be making a profit compared to filing full accounts. Add in the simplified reporting that means I won't need an accountant and I'll be quids in! (How do you say that in French?) Link to comment Share on other sites More sharing options...
BJSLIV Posted September 11, 2008 Share Posted September 11, 2008 I thought taxes and charges were paid on turnover less the expenses percentage under the micro scheme. The autoentrepreneur seems to charge a lower percentage but based on total turnover without the reduction.When you look at it the real difference between the two schemes is that the auto scheme offers simplied bookkeeping, and avoids the need to pay charges on the famous assumed turnover. Its not really about lowering the real level of deductions.So as a service provider up to the maximum turnover of 27000 Euros you would pay about 23% on tax and charges. http://www.auto-entrepreneur.fr/doc/kit2008.pdf Link to comment Share on other sites More sharing options...
Albert the InfoGipsy Posted September 11, 2008 Share Posted September 11, 2008 Sounds about right. I haven't done the sums but I'd expect the two sets of figures to match once you've got past the first couple of years. I'm only expecting to operate for another 2 or 3 years so minimising the pain at start-up and close-down is an important factor.By the way, for both AE and Micro BNC the turnover ceiling is now 33,000€. Link to comment Share on other sites More sharing options...
BJSLIV Posted September 11, 2008 Share Posted September 11, 2008 By the way, for both AE and Micro BNC the turnover ceiling is now 33,000€.Yes I forget that they had increased the AE ceiling to lien up with the new BNC levels. So that means they would rake in roughly 7500 Euros tax and charges at the maximum turnover. Link to comment Share on other sites More sharing options...
lmc Posted September 12, 2008 Share Posted September 12, 2008 Your understanding is spot-on.The new system is not cheaper. It is just simplified and the turnover level is now higher.I am still not quite clear on what is happening to all those people who would not actually be liable for income tax but will now be paying it by default once the new flat rate charges come in.Lisa Link to comment Share on other sites More sharing options...
woolybanana Posted September 12, 2008 Share Posted September 12, 2008 Somewhere niggling at the back of my mind I think that it is written somewhere that the autoentrepreneur scheme is designed for secong incomes only and not for main incomes and cannot therefore be used to obtain health cover for example. I hope I am wrong. Can anyone confirm or deny svp? Link to comment Share on other sites More sharing options...
Chancer Posted September 12, 2008 Share Posted September 12, 2008 Having read all the documentation at length I am convinced of this however Wooly your French being better than mine I am going to ask you to reconfirm it [:)]I will edit this post when I find either the PDF file or a link to it.Now found http://www.auto-entrepreneur.fr/You need to download and read the long PDF file to find the refernces that I did to employed or retired. Link to comment Share on other sites More sharing options...
Will Posted September 12, 2008 Share Posted September 12, 2008 My understanding is that it is open to anybody starting a new enterprise (i.e. you can't switch to autoentrepreneur status from another regime). It includes salaried and retired people, rather than being available only to them.Having said that, it's still not 100% clear how it will work, and I would not be at all surprised if some measure was included in order to stop people who cannot enter the system through other means using it as a cheap alternative to private health cover.It's also plain that, like the micro regime, it's not automatically the best solution for businesses with a low-ish turnover, particularly if it's your sole or main source of 'active' income. Non taxpayers, in particular, will need to do their sums carefully, as will those whose business involves quite high costs and expenses relative to turnover, or who would benefit from recovery of TVA. There is also the question about not having to formally register, whereas for some purposes - e.g. obtaining certain professional insurances, some advertising, a Siret number, which is obtained through formal registration, is a prerequisite. Link to comment Share on other sites More sharing options...
anniefromwales Posted September 12, 2008 Share Posted September 12, 2008 I guess the thinking is, it is aimed at encouraging people to earn something, and contribute, rather than earn nothing. See the examples of Emmanuelle and Amelie given on http://www.modernisation-economie.minefe.gouv.fr/mesures/lme_ex01.html The fact that it is a simpler but not a cheaper option (at 23% you would expect it to count some way towards heathcare, after all) and the fact that the maximum turnover has been set quite low, should be enough to stop people quitting their jobs/closing down their businesses en masse and migrating to this instead. The more I look at it the more I think it is a well-thought-out scheme, it looks to stand a sporting chance of achieving what it sets out to do (i.e. take a lot of the risk and stress out of setting up on your own account) without leaving itself wide open to abuse. Link to comment Share on other sites More sharing options...
Rob Posted September 12, 2008 Share Posted September 12, 2008 It is not often I disagree with Will, but on this occasion I do think it this new scheme is precisely the type of thing that is going to be useful to someone with a low turnover, as the contributions are based on turnover, not profit.IFP stated in a recent review of the scheme, that you need to do the arithmetic, and I certainly think that is true.http://www.french-property.com/guides/france/working-in-france/starting-a-business/social-security/contribution-levels/micro-entreprise/The beauty of the whole new micro/auto basis of being charged is surely that it gets you into the health system at a reasonable cost and not much hassle for someone doing something on a part-time basis. Link to comment Share on other sites More sharing options...
Will Posted September 12, 2008 Share Posted September 12, 2008 Rob, I don't think we are disagreeing. Maybe I didn't make my point clearly enough. The autoentrepreneur regime, just like the micro regime, is designed specifically for small businesses with low turnover. As I understand things, in each case, a standard percentage is applied. For micro, this is a percentage of turnover to represent costs and expenses, and you are taxed and pay charges on the remainder; while for autoentrepreneur the percentage is an amount of turnover that is taken for cotisations and taxes. Both are based on turnover, and it seems that over a period are likely to work out roughly equivalent in costs, though the autoentrepreneur regime has the benefit of even more simplified paperwork and of being automatically (rather than selectively) based on actual turnover which makes things more manageable as a start-up.My point was that you need to do some basic sums. For example, just as with a micro, if your allowable costs and expenses are high for your turnover, and/or a lot of money goes out on TVA, you may be better off under the réel regime, so the new status is not necessarily going to suit everybody. The link in Rob's post says much the same thing. Link to comment Share on other sites More sharing options...
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