URSSAF - another elegant French acronym

Patrick Owen shares his experience starting an English teaching business, becoming an Auto-entrepreneur and dealing with France’s particular administrative complexity and love of acronyms.  

So as I come to the end of my ACCRE, I’ve contacted the URSSAF who told me to contact the APCE.  I also contacted the RSI and the CIPAV but had no response.  Therefore I sent an email to the CNAVPL.  I must, also, remember to send my annual report to the DRTEPF.  If all of this sounds like double Dutch, welcome to my world, since I started my own business.  I knew the French administration loved acronyms having lived in France for eight years, dealing with the CAF, EDF, GDF, etc.  However, when I set up my own company I entered a whole new ball game. 

After working in various language schools I decided to work for myself.  Everyone warned me against it; “It’s really complicated,” and, “The charges are really high,” were just two of the comments I heard.  It is amazing that France has so many small businesses, when you hear all the negative reactions.  In the beginning, I wasn’t sure what type of business to create with various projects in mind.  However, I soon discovered that in France, once you have trained to do one thing changing direction is not easy. Changing careers involves financial and time investments that I did not have.  I therefore decided to set up a language teaching business, since this was what I knew best. 

Now, it might be useful to explain why I had decided to set up my own business.  Many language schools will employ teachers on freelance contracts, as I had discovered during my first year in France.  The problem is that to work for a business school or university, where the better pay rates are, you need a principal employer.  In addition, for a reason that I can only speculate at, few employers are willing to sign the paper agreeing to be your principal employer.  There are two solutions: one is to use a société de portage, the other is to be your own employer.  The société de portage acts as your employer, in the sense that they take care of all the administrative paperwork, of course for this service they take a fee.  My feeling was that the fee charged didn’t really justify the work involved,  I therefore decided to set up for myself. 

I attended an event held by my local Chamber of Commerce, which didn’t turn out to be much help.  I was unable to get answers to my questions and, as I was not setting up a commercial activity, they were not the right people to ask.  In the end, it was internet forums that proved to be the most help.  I typed my questions into Google and sifted through the responses.  It was here that I learnt I would have to see the URSSAF.  They seem to be the organisation that catches the companies who are not commercial or tradesmen.  I also discovered that provided I didn’t earn too much and didn’t employ anyone else, the process was fairly simple. 

I printed a form on the internet and headed for the URSSAF.  I had been told I didn’t need an appointment.  This worried me slightly, as I had experienced the queues at the Social Security and the Prefecture.  I was pleasantly surprised to be received within ten minutes of my arrival by a pleasant and helpful adviser.  She rapidly entered my details and answered my questions, in less than an hour I was in business, literally.  She offered me a free appointment with an accountant and, best of all, showed me I was eligible for a dispensation of social taxes for one year.  I left the URSSAF with a whole different image of the French administration. 

The dispensation for one year is important and a big helping hand.  Normally a company’s charges are fixed for the first and second years.  Then the third year’s charges are calculated on the real income of the second year.  The problem is that, although, the first year’s charges are relatively light, in the second they double and this kills a lot of small businesses.  Now, certain categories of business creators, the unemployed for example, can ask for a first year free of charges.  I qualified because, although I resigned, I had been looking after my kids one day a week and received income support.  This taught me that you have to read everything because there is often an advantageous exception which you may not always be told about. 

While surfing the internet, I also discovered that if I wanted to teach in companies I would need to make a déclaration d’activité with the DRTEFP (Direction Régionale du Travail, de l’Emploi et de la Formation Professionnelle).  In France, companies are obliged to pay a tax towards the training of their employees.  This tax is often collected by organisations which manage the training funds.  These organisations will only accept training courses run by companies who have made the declaration.  Many people wrongly refer to it as an agreement, however the DRTEFP are very strict in their literature that it is not an agreement from the state, merely a declaration.  

I discovered that with the right documentation, a curriculum vitae, a casier judiciaire vierge (a document you can order online showing you have never committed a crime), and your first training contract the procedure was straightforward.  It is the contract which can be a little complicated, if you haven’t got a declaration number how can you sign a contract?  I got around this problem by noting that my declaration was being processed, and offering my first client a clause whereby if I didn’t get the number the contract was null and void. 

I treated starting my business rather as a challenge and as time went on it became a puzzle, for which I was never sure I had all the pieces.  To be honest I enjoyed pitting myself against the French administration and proving those who said it would be hard to do wrong.  It must be said that I chose the simplest possible structure and being a teacher, who teaches in companies, I have very few overheads. 

It is worth mentioning in conclusion that a law was passed in 2008 making it even easier for freelance teachers.  The status of Auto-entrepreneur is designed for people who may have multiple employers as well as working for themselves.  The process of setting up is very simple and can even be done online.  The real boost however comes in terms of charges and tax.  The Auto-entrepreneur can choose to declare his turnover each month or trimester.  The social charges and tax are calculated based on what he declares and paid immediately.  This avoids the nasty bills arriving one year after a good year.  It also means that if you have a month with no income you pay nothing.  This regime is much more sensible for someone like me. 

Unfortunately, and here is the downside of my experience, getting information about this new status has been hard.  I have read the law and the Auto-entrepreneur’s handbook.  As a sole trader I can ask to benefit from the same regime, and I have done so which brings us back to the beginning of the article.  The acronyms are all the people I have contacted to ask for help changing my status.  

On the whole my experience has been positive; the principal problem has been people.  Everything one needs to know is on the internet.  When dealing with employees of the various administrations it is a case of pot luck.  The first person I saw was excellent, others have been less so.  I once made the mistake of phoning on the day of a strike, my call was answered after prolonged ringing by a harassed and unhelpful lady.  I blame myself for this one, though, after three years in France I should have known you don’t phone the public service on strike days, I was lucky someone answered.  My advice is to be determined, do your research and treat the experience as fun, and you will be fine. 

Patrick Owen
www.englishcoach38.com
letter-from-france.blogspot.com

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