B&B owners left confused by law

CHANGES in the social security legislation have left chambres d’hôtes owners with just as many questions as before the government moved to tighten the business registration procedures.

While the new Loi de Financement de la Sécurité Sociale says owners must register with the Régime Social des Indépendants if they exceed the non-salariés non-agricoles minimum earnings threshold of 4,670 in 2010 ( 4,740 for 2011) – and pay social security contributions – it has ignored the various business tax regimes that can be used.

The change does not affect the owners of gites or other long-term rental properties, but chambres d’hôtes owners face paying vastly different sums in social charges depending on which regime they have signed up for.

Those who are registered as autoentrepreneurs face paying 12 per cent of their turnover in charges and, as they have no allowance for expenses, they would be starting
from the first centime they earned above the 4,670 limit.

However, owners who set up as a microentreprise on the tax scheme Régime de Base get a fixed cost allowance before their liability to tax is calculated. This 71 per cent allowance for commercial sales is set against turnover, so only the remaining 29 per cent is liable to full social charges and any tax.

In effect, this means owners would need to bring in more than 16,103 to be affected, although below this there is still an obligation to pay the CSG and CRDS social charges on unearned income, at 12.3 per cent.

Gîtes de France gives guidance to its members who run chambres d’hôtes and points them to the micro-entreprise regime in its notes on setting up in business.

It notes that this regime sits well with smallscale businesses with revenues of under 76,300 before tax. Social charges will take around 45 per cent after the deduction of the 71 per cent allowance.

The new law gives chambres d’hôtes owners access to the health system, as they will be paying social charges for assurance maladie and assurance vieillesse as a major benefit of registering, but the choice of which business regime to choose is crucial in deciding how much you will pay.

Even if the business brings in less income than the registration threshold, it could be a benefit to register as an auto-entrepreneur, as total social charges would be 12 per cent.