Can anyone here explain simply and clearly in words of one syllable (I am a bear of very little brain) when it comes to numbers, how charging TVA works for micro-entrepreneurs once they have hit their 32k ceiling?
Is there a €32k ceiling any more?
Does this help ?? seems to be pretty informative…
You’re right David, the ME ceiling was doubled as of 1.1.18.
But, the TVA threshold hasn’t changed, that’s still 32k
So even as an ME, if you earn over 32k you need to register for TVA, as the exemption no longer applies.
It’s not really a thing that can be explained in a few words but basically, you need to know when to charge TVA and when not (some types of organisation don’t get charged VAT, also as an EU business you don’t charge TVA to non EU clients) and you need to know what rate to charge it at.
Then you add TVA on to the invoice when appropriate, and eventually pass all the TVA you’ve collected to the TVA man but I haven’t a clue how that works, I’m sure someone else will. I think you need to know the client’s TVA number if they have one.
The good news is that you can also claim back TVA your business has paid.
Are you sure ME is the best regime for you at this stage? It sounds as if you might have outgrown it and be ready to move up to a “grown up” regime…
Having read the link Stella posted I now understand that. I thought that one of the advantages of AE/ME was not having to deal with TVA.
Yes it was. AE was intended to be ultra simple, and it was carefully designed so that its ceiling was exactly the same as the TVA ceiling, therefore by definition no auto entrepreneur would be obliged to register for TVA (though you could if you wanted to). The exemption was not specifically to do with being an AE, it was to do with turnover; whatever kind of business you are, if your turnover is below the TVA threshold you can take advantage of the exemption.
To my mind, once you start paying TVA and lose the simplicity of micro entrepreneur the scheme loses a lot of its attraction. For instance if you were on a réel you might opt to hire an accountant to take care of the TVA but you wouldn’t want to on ME because you couldn’t offset the fee. And if you earn up to the new 75k ceiling (or whatever it is), you’re paying 15k a year in cotisations with no flexibility. If it were me I’d probably want to start thinking about investing some of that back into the business but ME is most effective if you pare your outgoings to the bone, it’s a disincentive to any kind of investment.
Hi Catharine - I now have a similar problem. All sales to UK under £135 have to have VAT added. Can you tell me if you included the TVA when you made your declarations for cottisations ?
Did you have to pay cottisations on the VAT you charged ? (hope that makes sense)
We decided it wasn’t worth the pain and haven’t gone down that road. Sorry!
We are actually going to have to change the business from AE going forward but thanks to Covid (ha bloody ha) have not earned enough to have to do so yet so I am now looking for a good accountant as it is all beyond me!
I know what you mean, I keep wondering if we should change up.
I am re-opening this post as I passed the TVA threshold at the start of August. I already have my numéro TVA intercommunataire as I have (actually, I had prior to Brexit) EU clients. I have been through the portail auto-entrepreneur website (links below) and have a couple of questions to put to the collective intelligence of SF:
- I have two contradictory notes on when to invoice with TVA… from the webpage (a) below, it says it is from the 1st day of the month that you pass the threshold, while the video at the end the webpage (b) says that it is from the 1st day of the following month. Can anyone confirm the correct version?
2). The threshold for staying in the AE regime on the topic of which Portail Auto-entrepreneur says:
Les seuils d’imposition ne correspondent donc plus aux seuils de la franchise en base de TVA . Le chiffre d’affaires à prendre en compte sera le chiffre hors taxes (HT).
Have I understood correctly that only the HT part of the chiffres d’affaires counts towards the 72 k euro threshold for staying in the simplifed AE regime?