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THE PÉRIGORD LOCAL • 35

Meet: Chloé Moore from French Business Management ‘A friendly, dynamic, bilingual team, helping you and your business succeed’

Micro Entrepreneurs and TVA This is meant as a general guideline only; specific rules may apply to you and your business and we urge you to always seek the advice of a specialist if in any doubt! Small business owners rejoiced at the end of 2017, when M Macron not only announced the end of RSI, but also the doubling of micro entreprise thresholds. Until now, the earning limits before moving into the “réel” system were 82 800e for sales and chambre d’hôtes, and 33 200e for services and holiday rentals. From 1st Jan 2018, not only have the social charges (health contributions, family benefits and pension payments) percentages come down, but the earning limits have been doubled. Charges are now (rates are given without the optional income tax contribution)

12,8% instead of 13,1% for sales 22% instead of 22,7 % for services And earning limits have increased to: 170 000e for sales and chambre d’hôtes 70 000e for services and holiday rentals In theory, it all looks very straightforward, and good news for micro entrepreneurs – so why bother writing an article about it? Namely because of TVA. Indeed, what many people overlook is the fact that TVA thresholds have not changed and remain at the same level as the old earning limits for MEs. So, what does this mean for your business? As before, you will continue to declare your gross income each month/quarter and pay the set rate of social charges. However, you will become liable for TVA from the 1st of the month in which you reach the limit of 35 200e* for services or 91 000e* for sales. (So, if for services, you hit the 35 200e limit on 20th August, you will become liable for TVA from 1st August). *this condition is valid only if your previous

year’s turnover was under the 33 200/82 800e limit Generally, TVA is set at 20% (unless the 10% or 5,5% rate applies to your activity), so your prices will either need to go up by that much, or you will lose 20% of your turnover! Admittedly, you will also be able to deduct TVA on your purchases but bear in mind this will mean switching from a simplified accounting system (currently for MEs, the only obligation is to keep a sales journal), to a full-blown certified accounting system – and you still won’t be able to deduct your expenses! TVA will be declarable initially on an annual basis, on the 3rd May of following year. Two payments on-account will also be due during the year (July and Dec), based on the previous year’s declaration. It is also possible to request quarterly or monthly declarations. If during the following year, you remain under the TVA threshold, you will no longer be subject to TVA from 1st January the next year. If you think you will go over the limits, it is also possible to opt into paying TVA before these levels are met (for example, when first registering your business) to avoid getting a post-dated hit. However, this option requires registration for a minimum of 2 years. Of course, we understand how daunting it can be trying to run a business and deal with worries about TVA, income thresholds and business regimes. We offer advice on accounting and tax issues to businesses throughout France. Do contact us if you would like to talk about how we can help you. You can contact Chloé on: contact@frenchbusinessmanagement.com, +33 (0)5 53 04 27 80 www.frenchbusinessmanagement.com French Business Management La Jaubertie 24380, St-Maime-de-Pereyrol

Published March, May, July, September and December each year The Périgord Local • May - June 2018

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The Périgord Local Issue 2 May - June 2018  

The free regional magazine for the ‘English speaking’ people, their businesses & the limitless culture of the ancient Périgord region of Fra...

The Périgord Local Issue 2 May - June 2018  

The free regional magazine for the ‘English speaking’ people, their businesses & the limitless culture of the ancient Périgord region of Fra...