Cotisations for a micro

[jehe]

We will be starting a micro enterprise in April/May and wondered what out cotisations for the year are likely to be and is it possible to pay by instalments. Our first year earnings are likely to be no more than 10,000 euro's so to lose 3,000 on cotisations before we start will be a bit of a blow.

[Danny]

[quote user="jehe"]

We will be starting a micro enterprise in April/May and wondered what out cotisations for the year are likely to be and is it possible to pay by instalments. Our first year earnings are likely to be no more than 10,000 euro's so to lose 3,000 on cotisations before we start will be a bit of a blow.

[/quote]

In my first year (micro BIC) I paid about 3500 euros. it is difficult to aviod if you are not aware of how it all works. Bear in mind that the amount you are due to pay is based on your income so if you don't make much, you won't pay much. If you want it is possible to contact the agencies involved and tell them the circumstances and if you can't pay at the time, it can be deferred.

At the end of the year I got a refund for all my overpayments(EDIT - as I only made 2750 euros in total) The health cotisations don't change, so you will still be liable, whatever your income.

IMPORTANT Make sure you do not register until you really have to as you will then be due to start paying. I suffered from not thinking about this.

Danny

[jehe]

Thanks for the reply Danny, very helpful indeed.

One point I am rather confused about is that whilst researching this on the forums it appears that tax is due at a high level on income even if it is within the 27000 euro's ceiling. I was under the impression that one of the benefits of a micro was no tax until you went over the 27000 limit. Coud you clarify this if possible.

Thanks,Jim.

[Nick Trollope]

[quote user="jehe"]

Thanks for the reply Danny, very helpful indeed.

One point I am rather confused about is that whilst researching this on the forums it appears that tax is due at a high level on income even if it is within the 27000 euro's ceiling. I was under the impression that one of the benefits of a micro was no tax until you went over the 27000 limit. Coud you clarify this if possible.

Thanks,Jim.

[/quote]

Don't confuse tax and social charges. A micro receiving 27.000€ will pay no tax. What they will pay is about 4.500 in cotistations (NI-equivalent). It is alot more complicated than that, but tax is really not an issue.

As always, seek the advice of an accountant. You will save more than his fees.

 

[Will]

The way that the micro regime works is that a standard percentage is knocked off for costs and expenses, and what is left will almost certainly not be enough to pay tax on if that is the only income you have. France taxes you as a household rather than as individuals or as a business (at least at micro level) so if your spouse is earning, or you have some other income, then you probably will pay tax as the combined income could well put you in a different bracket.

As Nick says, don't confuse tax with the NI equivalent, which you will pay. The proposed changes will mean you may not pay quite so much at first if your income is lower - previously charges were based on average income for start-up years. But in the medium term you will end up paying the same. And it has always been possible to opt for lower payments, so there is not really much of a change. Unless your micro's tax affairs are very simple indeed, follow Nick's other advice and use a good accountant. You may find it better to not go for the micro, this lets you offset your real costs, rather than a standard percentage, and there are possible TVA benefits too.

[jehe]

Thank you to those that answered my query, good useful information.