HIGH social charges are one of the bugbears of life for the self-employed in France and can cause a cashflow problem in early years.
However difficulties do not only arise on starting up – they can crop up when you close down as well. In some cases it can take a year or more before all of the final payment demands come in.
One reader, who was self-employed from March 2007 to May 2008, said that, ten months after she closed the business, she received final demands for payment for 2008 from social charges body Urssaf, as well as being told to expect a final “regularisation” demand for 2007 – both for more than €1,000.
For commercial or artisan jobs the main social charges body is the RSI, while the professions libérales only use this body for health charges, paying for the pension via Cipav (the Caisse Interprofessionnelle de Prévoyance et d’Assurance) and the rest (family allowance etc) to Urssaf.
Accountant Gérard Demaure from Account Revision in Montfort-sur-Meu, Brittany, said long delays to payment demands were not unusual and often caused concern, especially with expats who may be less familiar with the system.
“This often happens – it is due to the way the social charges system works for the self-employed,” he said.
“The social charges demands in the first two years have little bearing on the real situation of your work. They are half of a fixed ceiling, as actual income is not yet known, and if the real income was higher you have to make balancing payments two years afterwards.
“Some people then find a whole year’s profit goes on paying charges. Also the social charges bodies are often delayed in their payment demands, so it is common if you close a business you continue to receive requests for remaining instalments to be paid.”
He said there were no easy ways to avoid late demands. Options include avoiding the traditional self-employment structures and opting for the auto-entrepreneur system instead, which has payments in full at regular intervals based on turnover. Another is to use the portage salarial system, where you are technically an employee of an intermediary firm which sorts out your social charges and pays you a salary.
Mr Demaure said both the estimated demands that should be asked of you in the first years and the full amounts that you will be liable to based on real income were based on clear tables.
They are available from the social bodies, or an accountant can do the calculations for you. If you believe an error might have been made the first step is to tell Urssaf, by recorded delivery post with a reply slip (lettre recommandée avec accusé de réception) or using the internet.
You can contact Urssaf at www.urssaf.fr then contacts and then contactez-nous or for the RSI, visit www.le-rsi.fr and then click nous contacter. “Using the internet works well – it gives a clear date of receipt and usually they should respond quickly,” said Mr Demaure. He added you are entitled to ask for a clarification of calculations made and can ask they be recalculated, making sure they are based on real income and not predictions. You can also ask for a payment delay – un sursis de paiement – while the matter is resolved.
There is also a formal process, le rescrit social, whereby you can ask Urssaf for a detailed legal ruling on your rights concerning specific contested matters, such as exoneration entitlements.
If you cannot resolve the problem with Urssaf you must apply to the tribunal des affaires sociales – there is one in each department. This can be done without a lawyer and a form for querying charges demands is available from the court office. The court will rule on what you should pay.
If you intend to close a business and move abroad, this does not exempt you from remaining charges.
Declare your closure to the tax office and make sure they and social charges bodies have the information on professional income they need to calculate remaining payments based on real revenue not estimates, as well as new contact details. If you are registered with a chamber of commerce or trade you also need to be removed from their register.