• France's news in English

France 'drops limits' on auto-entrepreneurs

Dan MacGuill · 13 Aug 2013, 13:03

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

Facebook Twitter Google+ reddit

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)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
France given wake up call as it bids for Brexit business
The business district 'La Defense' in Paris. Photo: AFP

France clearly has some work to do if it really wants to pinch business from the UK post-Brexit.

Mouth fun? French words you just can't translate literally
Do you know the French word for throat-support? Photo: AFP

Word of warning: Don't translate French literally.

How France plans to help its stressed-out police force
Yellow smoke rises around French police officers in Paris holding a banner reading "Solidarity with our colleagues, police angry". All photos: AFP

Could these measures stop the cops from protesting?

'3,000 migrants dispersed' after 'Jungle' clearance
Photo: AFP

While thousands of migrants have been bussed out around France, new ones are arriving all the time and thousands of others have simply been dispersed aid agencies say.

Fifteen of the most bizarre laws in France
Photo: Matthew Powell/Flickr

A must read for anyone who wants to stay on the right side of the law in France.

Medieval town in south of France upholds ban on UFOs
The town of Châteauneuf-du-Pape. Photo: Aa77zz/Flickr

Aliens take note.

American tourist dies at French Riviera sex club
The Riviera resort of Cannes. Photo: AFP

American tourist reportedly fell five floors after being pushed outside the underground sex club in Cannes.

Paris: 'Flying' water taxis to be tested on River Seine
Photo: SeaBubbles

An in Seine idea surely? But tests will go ahead.

France joins fight for rich pickings from post-Brexit UK
Photo: AFP/DcnH/Flickr

France tries to woo EU's bank regulator and other agencies.

How speaking French can really mess up your English
Photo: CollegeDegree360/Flickr

So you've mastered French, but now it's time to learn English all over again.

The annoying questions only a half French, half Brit can answer
Sponsored Article
Last chance to vote absentee in the US elections
Forget Brangelina's chateau - here are nine others you've got to see
The must-see French films of the millennium - Part One
How life for expats in France has changed over the years
Why Toulouse is THE place to be in France right now
Video: New homage to Paris shows the 'real side' of city
The 'most dangerous' animals you can find in France
Swap London fogs for Paris frogs: France woos the Brits
Anger after presenter kisses woman's breasts on live TV
Is France finally set for a cold winter this year?
IN PICS: The story of the 'ghost Metro stations' of Paris
How to make France's 'most-loved' dish: Magret de Canard
Welcome to the flipside: 'I'm not living the dream in France'
Do the French really still eat frogs' legs?
French 'delicacies' foreigners really find hard to stomach
French are the 'world's most pessimistic' about the future
Why the French should not be gloomy about the future
This is the most useful French lesson you will ever have. How to get angry
Why is there a giant clitoris in a field in southern France?
French pastry wars: Pain au chocolat versus chocolatine
Countdown: The ten dishes the French love the most
Expats or immigrants in France: Is there a difference?
How the French reinvented dozens of English words
jobs available