• 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
Focus
French fighter jet deal: India 'a school of patience'
Rafale jets at an assembly hanger in Merignac, southwestern France. Photo: Jean-Pierre Muller/AFP

The less-than-supersonic sale of French Rafale fighter jets to India has highlighted the obstacles facing foreign arms firms seeking to do business with the world's biggest weapons importer.

Hollande vows to 'completely dismantle' Calais Jungle
French President Francois Hollande visiting a refugee centre in Tours. Photo: Guillaume Souvant/AFP

President Francois Hollande has bowed to right-wing pressure and stepped up pledge to combat illegal migration.

First driverless minibus goes on trial in Paris
Gilbert Gagnaire, Director General of Easy Mile, poses in front of his driverless EZ10 minibus. Photo: Eric Feferberg/AFP

The French capital's transport authority will carry out its first test of a driverless minibus on Saturday.

Feature
Room for improvement: Paris's matchbox apartments
Receptionist Ivan Lopez in his tiny "chambre de bonne". Photo: Thomas Samson/AFP

Thousands of Parisians round off a hard day's work with a trudge up six flights of stairs to a tiny, stuffy room they resignedly call home.

Former president Chirac still in hospital but wife home
Bernadette Chirac executes a deal at the French Stock Exchange on September 12. Photo: Lionel Bonaventure/AFP

Former French president Jacques Chirac remains in hospital in Paris but his wife Bernadette has now been discharged.

Pope holds multi-faith meeting with Nice victims
Pope Francis kisses a baby on arrival at his weekly audience in St Peter's Square. Photo: Vincenzo Pinto/ AFP

Pope Francis will on Saturday hold a multi-faith meeting of grieving relatives and survivors of an attack in France in July when a jihadist ploughed his truck into a crowd in Nice.

Cameron school pal appointed UK ambassador to France
Ed Llewellyn has spent time in the European Commission. Photo: Gov.uk

Ed Llewellyn attended the Eton College at the same time as former PM David Cameron, and then served as his chief of staff throughout his eleven years as Conservative leader.

UK announces new ambassador to France
Photo: gov.uk

Meet Edward Llewellyn, the UK's new ambassador to France.

How far have you assimilated into French culture?
Photo: Marie/Flickr

Which stage of the assimilation process are you at?

Opinion - Integration
'Stop telling immigrants to be French and help it happen'
Photo: AFP

Demands and laws to force immigrants to live, look, and think like the French are futile and damaging.

Sponsored Article
Why Jordan is the ‘Different’ East
National
France's Marion Cotillard rebuffs rumours of fling with Brad Pitt
National
Eight arrested over links to Nice truck attacker
Features
Why everyone should party in a French chateau at least once
Travel
The Frenchman who hated 'Nazi-Zealand' after four-day hitch-hike fail
Culture
What's on: Ten exciting events across France in September
The 45-million year old underground shells that flavour Champagne
Features
French job speak: All the terms you need to know
'Resilient' Paris now a more appealing city than New York
National
France says it's OK to warn drivers about speed cameras
Meet Honorine, 113, the oldest person in France
Education
Grenoble named France's best city to be a student
Society
New Metro map reveals cheapest pints of beer in Paris
Business & Money
How reliant is the French economy on Paris?
Society
Here's why Parisians want to move to Bordeaux
And the 'best place to spend a weekend in Europe' is… Lyon
Analysis & Opinion
'Muslims in France must be considered ordinary citizens'
Armed guards to ride French trains from October
National
France among Europe's priciest for train travel
National
Paris set to make river bank car-free for six-month trial
Society
Bordeaux hospital ranked as best in France
National
France rolls out 'world's first' driverless buses
Society
15 things a Frenchwoman can do to feel more British
Culture
Every fact you need to know about France's 'départements'
2,730
jobs available