New 46% social charges on profit for SARL/EURL

Hello everyone -

have a business (SARL) with a turnover of around 50,000 euros per year, so of course paying TVA. If I manage to keep work coming in and maintain this turnover, with a deduction of 46% of my profits I will have about 8,000 euros a year left to live on which is obviously not enough. Can this really be true - has anyone else an opinion about this? I work extremely hard but this would be working for nothing!

you said it Jayne, great place to retire to, relitively hassle free as far as paperwork is concerned (even though they think it isn't!), very different story for those of us who run businesses here and end up paying for the rest... :-O

Tony, Brian said he would be left with around €8000 after deductions. We are REEL simplifié and is recommended for artisans but you still pay more than 46% of your net profit to the government. In fact, this year we paid €1900 extra which is a compulsory pension addition which we weren't prepared for.

From our net profit last year we now have to pay €900 a month in cotisations for the next 10 months regardless of what we bring in financially as it is calculated on last year's net.

Being self employed in the UK is a piece of cake compared to trying to do the same here.

We don't want to be AE because there is a lot of hassle sometimes changing regimes plus, in my husband's profession, it does use a fair amount of stock but a client does not want to pay for 100 metres of cable when he only needs 50 for example; plus delivery to site would not be suitable as often properties are empty and various other issues. It is probably suitable for some but not all. Our clients want a one stop, one cheque.

It is difficult to make a living here which is why so many people work on the black.

@Tony - social charges are taken at 46%, then you're taxed on what profit you make which can easily mean giving more than half to the state - welcome to "Business in France" :-O

@Brian - may well be worth being an AE and getting clients to pay materials/outside services direct and you just for your services... ;-)

ha ha, that's the "understated/modest" title, for other admin bits and bobs I'm a "chef d'entreprise" which doesn't really fit with "commerçant" or the more precise classification and correct title of "buraliste"! all good fun (and very long hours!) ;-)

Ooh gérant - aren't you posh!!

Well aware of that, Kate, after 4 years as an AE, now gérant of a SNC. Ever heard of creative accounting or getting the client to pay expenses directly... otherwise the AE scheme is in no way designed for high overheads/expenses activities ;-)

I must point out that the original post has nothing to do with the AE scheme, quite the opposite and Rebecca talked about "earnings". I too have two kids and know what it's like trying to get by, that's why my OH and I have recently changed activities, moved etc etc. ;-)

unless you can get the client to pay the expenses direct...! ;-)

If you have any kind of significant expenses then AE is not the right regime!

Andrew, it's not EARNINGS it's TURNOVER, as Tracy said. So if your AE business has expenses etc you may only be left with a lot less than that! And with kids or other dependants that won't go far, unfortunately.

Bad news on dividends, but that was expected. I have a SNC and have opted for IS paying IR on what we take as a salarie (thus having two bites at the cherry). I was aware that the situation was going to change but it's minimal when looking at the whole situation of a company. Jus thave to juggle a littel differently with the figures and the salaire/dividende ratio ;-)

Depends on your outgoings though, I have exceeded the AE limit but take of the charges, brings you down to 24,000, take of approx running costs of 10,000 (probably more) leaves you with 1600 a month. It may be sufficient for some people depending where you live, household outgoings, number of kids etc but it hardly takes you into the super earnings bracket. When I look at the number of hours you put in as self employed, plus the fact that you have no holiday pay, sick pay, no mutuelle etc, then my hourly rate is less than the SMIC, in common with most self employed people.

I believe that the AE was purposely structured to keep people from earning too much as befits a socialist economy. Please note, I am not complaining just pointing out the less obvious facts, people forget that 33,000 is turnover NOT profit, there's a big difference.

Thanks Andrew. We know a few people that have done this but its a bit double edged. We had considered it but on looking closely in to it decided not to.

If you're earning that sort of money, Rebecca, then I wouldn't complain - you slot straight into the mainstream like everyone else, me included ;-)

Jayne, I know of builders who are auto entrepreneur and they simply get the client to pay the bill for materials direct with the depot and then they just bill for their services. It gets them out of all the usual charges sociales problems. worth a thought perhaps...?!

We are REEL and just consulted our accountant about changing to SARL as we understood that it was only 32% cotisations. However, he replied in some detail and said we would be worse off because what we did not pay in social charges we would pay in tax, so its a no win situation. We cannot go AE because of high material costs, so we will have to live with it.

We love living here so we just have to stay poor :)

quite right, the only way to get by here is to do as the French do, that is become a fonctionaire, work for a large mainly governement owned company or claim chomage ( which we can,t) or be corrupt & work on the black, which most do, not me I hasten to add, I just survive on a pittance after paying for all those worthy fonctionnaires

Yes, it is. It is very difficult. Since you didn't seem to manage to finish your last sentence, I will assume that you just lost your train of thought...

That's what I understood as well. My husband has a SARL and draws a salary so pays the social charges. The only way anyone can get out of paying tax on profits is to not make any profit. Been preparing the books for my husbands accountant for the last eight years and nothing has changed so far.

must be terrible having your expenses, don,t know how one can manage on less than 33000 I must structure my earnings to be more