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Auto-entrepreneurs face 5-year limit

Government looks to stop people working full-time on simplified regime and gaining commercial advantage

SMALL businesses on the auto-entrepreneur regime could face a five-year limit before being forced to switch to a more advanced business set-up under plans from the government.

Trades minister Sylvia Pinel said the simplified regime would still be available “without limit of time” if it concerned a secondary activity – but would change if the business was the principal activity.

She said the proposals came after a review by the social affairs inspectorate IGAS which, although criticising “incomplete data of uncertain reliability”, said auto-entrepreneurs represented 56% of the 2.3million business start-ups in the four years since the regime started.

Pinel said auto-entrepreneurs would get a period of between one and five years to get their business up and running using the simplified set-up and then decide whether to move to a more classic regime or fold the business.

The aim was to distinguish between two groups on the regime: those who were living off it and those who were using it to get some extra money. Of the 900,000 auto-entrepreneurs nearly half do not report any annual turnover and 90% of the other half report turnover of less than the Smic minimum wage.

Pinel said the plans had still to be refined and she would be speaking to the Union des Auto-Entrepreneurs and artisans’ groups.

Tradespeople say that the auto-entrepreneur regime gives an unfair advantage due to differences in qualifications, bureaucracy and insurance.

* A full article on the government proposals and the report will appear in May Connexion.

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