• France's news in English
 
app_header_v3

France 'drops limits' on auto-entrepreneurs

Dan MacGuill · 13 Aug 2013, 13:03

Published: 13 Aug 2013 13:03 GMT+02:00

The French government had announced contentious plans in June to cut the current earning limits on the country's self-employed, or auto-entrepreneurs as they are called.

The revenue ceiling for auto-entrepreneur (AE) "artisans" was to be cut from from €32,600 to €19,000 and for AE "traders" from €81,500 to €47,100. 

The move sparked uproar from auto-entrepreneurs who claimed they would be forced to ditch the popular and simple business model. It appears their voices have been heard.

A document seen by French financial daily Les Echos suggests that France’s 893,000 registered auto-entrepreneurs, including thousands of ex-pats, will in the end, not be subject to the reduced earning limits.

The French cabinet is set to debate the bill later this month, but Les Echos, which claims to have seen a copy of the bill, says all mention of the reduced limits has been deleted from the text.

"This would be great news for auto-antrepreneurs," Nice-based consultant Andy Dennison, who runs the website MonAmiAndy.com told The Local.

"This would have pushed a lot of people off the scheme and forced them to set up a limited company."

SEE ALSO: The pitfalls of France’s auto-entrepreneur system.

Since 2009, around one million people are believed to have signed up to the auto-entrepreneur status that was launched by former president Nicolas Sarkozy.

It offers the self-employed an easy way to set up their own business and allows them to pay social charges as they earn rather than upfront.

It is appreciated by thousands of expats because it is relatively free of burdensome red tape.

Critics of the legislation claimed that although the decreased limits would have affected 11 percent of AEs, they would have dissuaded many people from signing up to it and effectively brought about its demise.

In May, The Local reported how a group called “The Chicks” set up an online movement to fight the proposed reforms.

“We cannot and we must not accept the denial of social democracy that would lead to the destruction of our businesses, jobs and the growth of entrepreneurship in France,” read a statement on the website.

Government coffers could have lost money

Dennison believes the government may have ended up losing out anyway because auto-entrepreneurs may have been inclined not to declare their total revenue.

"A lot of people would have felt forced to under-declare. People who have done everything by the book would suddenly have been told they cannot earn more than €19,000. That would have had a knock-on effect on France's social security system, which already has a gaping black hole. "

The new Socialist government wanted to introduce changes to the AE system to crack down on those abusing a system that was originally designed to help those who wanted to work more and earn a second income.

President François Hollande launched a project in the spring to gather expert testimony on tradespeople and small businesses, with a view to legislating this autumn.

Trades Minister Slyvia Pinel isset to present the reform bill to cabinet on August 21st, with the proposals coming into law in September if they pass through parliament.

Story continues below…

Setting up a limited company has its bonuses

The proposed changes were made despite a report commissioned by the government that called for ministers to maintain the simplicity of the AE scheme.The government believes the system puts regular tradespeople at a disadvantage because auto-entrepreneurs pay less social charges.

Companies often prefer to commission auto-entrepreneurs over regular, established employees, because they will incur less costs.

Once auto-entrepreneurs go above the limit they have to set up their own limited company, which has both benefits and disadvantages, as Dennison points out.

"One of the good things about a limited company known as a SARL, is that they can run at a loss if that's ok for you. Banks and businesses are also more likely to trust SARLs than auto-entrepreneurs, which means it is easier to get a loan, and so on.

"There are, however, more costs involved and you need to make sure that you will earn a certain amount to cover those costs. You need clear objectives each year. 

"If you have that and you can reach them, then a SARL is more beneficial in the long run."

Dan MacGuill (dan.macguill@thelocal.com)

Your comments about this article

Today's headlines
Labour law protests
Paris: 2,500 police on alert for new labour law protest
Police carry out bag checks at Thursday's protest. Photo: AFP

Paris is on high alert on Tuesday as the city is set to play host to the 11th demonstration against new labour reform bill, which will be voted on by the Senate on the same day.

French police lifeguards get guns for summer beach patrol
Photo: AFP

Keep an eye out for life guards with guns on beaches in France this summer.

What will change in France from July 2016
Photo: Fred Dufour/AFP

July will see some changes in France, and here's how you'll be affected.

France tells UK to hurry up and get on with EU divorce
Photo: AFP

"Don't waste any time," France tells UK. "We don't want anymore uncertainty."

French police hold ten after raids on luxury Paris stores
Photo: AFP

Have French police solved a series of armed raids of luxury boutiques?

New app aims to rid Paris pavements of dog poo
Photo: ByeBye Crottoir

No need to watch your step anymore, says this French engineer behind a new app called "Bye Bye Pavement Dog Poo"

Calls in France for English to be ditched as EU language
Photo: AFP

Some in France suggest it's time to end the dominance of English as the EU's working language, now that the UK has voted to leave the union.

Seven tips for selling your house in France
Photo: AFP

After the Brexit referendum there is already talk of British expats in France considering selling up. Here are seven tips put together by an expert.

British businesses in France told to keep calm and carry on
Brits celebrate the Queen's 90th birthday at the British embassy in Paris. Photo: UK in France/Flickr

Brits running their own businesses have been told that despite the Brexit vote, it should be "business as usual".

Paris thieves pilfer luxury watches worth €3 million
Photo: AFP

Another multi-million robbery in the chic heart of Paris.

Sponsored Article
Why you should attend an international job fair
National
Mixed reaction from the French as UK votes for Brexit
National
How Brexit could now scupper that dream move to France
Brexit limbo: What happens next for Brits in France?
Gallery
Ten reasons why you should think about becoming French
Sponsored Article
Education abroad: How to find an international school
Analysis & Opinion
Brexit: Life for Brits in France 'will get more complicated'
Culture
20 English words that 'should be banished' from French
National
Best Briehaviour: A guide to French cheese etiquette
Features
And the best city in France for expats to live in is...?
Sponsored Article
Why Swiss hospitality graduates are in demand
Society
Forget bikes, Paris is set to roll out scooter rentals
National
'We fear for our safety': French police feel the strain
Lifestyle
Why Rennes (and not Paris) is the best city in France for expats to live
Sponsored Article
Avoid hidden fees when sending money overseas
National
Why are the French losing appetite for baguettes?
Lifestyle
Naturism booms in France as young eager to ditch clothes
Lifestyle
Is working life better in London or Paris?
National
Dear Americans: Please come to Paris
National
It's official (kind of): French work fewest hours in EU
And the best football fans of Euro 2016 in France are?
National
Paris has wettest spring in 100 years and it's hitting morale
Police murders remind France of complexity of terror threat
National
IN PICTURES: Labour law protests in Paris turn ugly
National
Double murder just latest jihadist attack on French police and soldiers
International
French police appear unprepared for hooligan threat at Euro 2016
Sport
An A to Z guide of what to expect in France for Euro 2016
2,730
jobs available