The New French System of PAYE

On January 1, 2019, the revolution that is PAYE will hit French taxpayers. Up until now, we paid tax on income from the previous year's tax declaration. The main problem with this is that it is inflexible in the case of major life changes, like redundancy.

So from next year, if something changes, we will be able to reflect this immediately in our tax payments. All good.

Except that, and there's always an except that, it's not all good. Last year, I enjoyed the services of a cleaner. She was employed through a service agency and thus made social payment contributions, got holiday pay, sick leave and all other advantages of the legally employed. I got half the money I paid to the agency directly taken off my taxes.

It's one of those French tax niches that are widely popular, and that the government have been trying to reduce. It meant that instead of paying, for example, 200EUR/month for the cleaner, with the tax relief I was effectively paying 100EUR because my monthly tax direct debit was 100EUR/month cheaper than it would have been.

Now though, with the new system, the reimbursement will not occur immediately, but will come as a lump sum twice a year. The result of this is that I will probably never be able to have a cleaner again.

Why? Well, if I pay, for example, 400EUR/month in tax, I will not be able to add a further 200EUR to pay for the cleaner. It's just too much. Even I get a reimbursement in a lump sum, the monthly total is just too high.

So does this mean that the government has found a way to kill off the niche? By making it impossible for people like me who are not rich enough to pay full taxes AND a cleaner, or gardener, or any other regular personal service?

I should think the people employed in the previously flourishing personal services industry must be horrified at the (intended?) potential consequences of this nasty little tax manoeuvre. And it makes the tax system a system of finance rather than economy. Obviously it gives the government the opportunity to use the tax income before paying out on the 'credit impots', but doesn't take into consideration the probability that the personal services industry will take a huge knock, and jobs will be at risk. Jobs done by those who are often in a vulnerable situation.

So thanks Macron. WBanker extraordinaire.

Taxed Untaxed

My lawyer rang me while I was in the car driving home yesterday lunch time.
"Am I disturbing you?" she asked.
"Oh, no no," I lied, hurriedly trying to find a spot to park, and failing.
"Could you fax me your Avis d'Impots for 2007, 2008 and your déclaration for 2009?" she said.
"I haven't done my impots for 2009 yet" said I, thinking that the deadline is coming up (Départements 20-49: June 17).
"Not to worry then, it's less important than the others" she said.

Which of course spurred me to do my tax form when I got home, timed at 15 minutes. My life is that simple.

Well, when you're a mere employee with nothing but pension alimentaire to add, it takes no time at all. The company you work for sends the tax office your earnings, your bank sends any interest on savings to be taxed, so all you have to do is add up the dosh your ex-h reluctantly sent, remind them that you're a SINGLE mother, not a co-habiting one (changes a LOT, that does!), sign it electronically, and Bob's yer uncle.

Oh, I also told them I sent some money to support Avaaz on a couple of projects because you can claim money you send to charities back. As it's a US organisation I'll be interested to see if they accept my claim.

It was a lot more complicated when I was married and it's lovely to feel it's all thrown off now I'm divorced. The complicated stuff was all his anyway. We had something like 5 different never-ending forms to fill in. It was a nightmare! It was also before the days of the electronic déclaration so I'd have to fill in all the forms twice and then, as we were usually cutting it reeeeeally fine, we'd have to jump in the car just before midnight and dash to the tax office.

More often than not there would be a load of other people there and the atmosphere was much like a party with happy folk who'd beat the deadline, desperate ones trying to make the deadline, and finally resigned/angry ones who'd just failed the deadline.

Tax time was incredibly stressful but now it's a matter of a couple of clicks and a polite thank you message when you're finished. And I certainly don't miss the party.

Cold Remedies

For some reason, my Sky Digibox isn't working at the moment. I can get the menu but a message tells me there is no satellite connection. So I missed last night's episode of FlashForward. A bit of a bugger but I can catch up later if I get a connection...

Instead I watched Capital on French tele's M6. It's one of the few programmes I like watching because it gives some good information on a variety of topics. Yesterday they were talking about improving the insulation on houses which has become big business due to the increase in fuel prices. Many companies have jumped on the bandwaggon and offer a complete service ranging from replacing windows, insulating the roof and walls, and installing the right heating system.

It's incredibly expensive though. One retired couple with a fairly large old house (210m²) were presented with an estimate of 210,000Eur to completely renovate the house. Horrific!

One of the selling points that sales reps ram down the throats of prospective customers is the magic 'credit impot' which is a tax rebate on some of the money spent. What people don't know, however, is how it works, and much fury has been engendered by people discovering too late that they didn't get as much as they were promised by the slimy rep.

To start with, you'll only get money back if you use a professional to install the equipment. BUT you only get a rebate on the cost of the equipment, not the installation. Also, the Fisc (French tax office) will only give a rebate up to a maximum of 8000Eur, or 16000Eur for a couple. The couple paying out 210K would not get any more than one paying out 20K. The level of rebate is not the same for all types of equipment, so while a pompe à chaleur (heat pump?) gets 50%, insulation material is rebated at 25%.

There are all sorts of other conditions too, so if you live and pay your taxes in France and want to insulate your house, check up on the French government tax site (then Les crédits d'impôt pour dépenses d'équipements dans la résidence principale) to find out exactly what you're entitled to.

I'm not sure how people are going to be able to pay such astronomic prices though, unless the government implements some sort of equity release programme like the UK. My parents benefited from that and their house is now as snug as a bug. Of course, the sum paid will be taken off when the house is sold, but if they have to go into a care home, that'll eat up anything that's over anyway.

I think children these days should renounce on the prospect of inheriting their parent's home. By the time the care home has fleeced them dry, there'll be either nothing left, or no more tuppence ha'penny of which the government will take most in death duties.

Admit it guys, we're on our own, and if you need your parent's money to get somewhere aged 50+, let's face it, you're a loser.

Election Apathy

"Who are you going to vote for, mummy?" asked my eldest today.
"No one," I had to reply, "I can't vote."

He was quite stunned and well he might be. I might be able to vote in European elections (big deal, I'm sure that's just because the voting numbers are so dismal that they are desperate to involve the bottom of the pilers - foreigners) but I cannot vote in the one that counts. The election to choose the President of the Republic is not for me. I am not French. End of story.

However, the Republic is perfectly happy for me to pay my taxes and social contributions; they insist, in fact, but prevent me from adding my voice to how all my tax euros are to be spent, despite my being part of the happy, inclusive Euro family, as a Brit.

So, I can barely drum up any enthusiasm for the election at all. I have no voice, cannot influence the outcome, so why should I care? I can't do anything about it, there'll probably be no big changes that affect me anyway as there hardly ever are (except the 35hr week - yippee!), so I'm pretty apathetic about Sego and her white jacket, or Sarko and his hyperactive bouncing about.

I'm deeply suspicious of politicians, especially those on election campaigns. We hear words and promises, rallying calls to the population etc. etc. and it's all empty. Empty words, empty promises. The best liar wins. You just have to look at Blair to see how empty his words are, and Gordon Brown is even worse. He's a thieving, lying, manipulative, smug piece of shit, and that's being generous.

Chirac is rotten to the core as was Mitterand. They are all out for themselves; their self-aggrandisement, enrichment and rapacious political ambition come what may. Will Gordon Brown resign over the pensions fiasco? I doubt it. Has his pension or any other minister's been affected by his thieving grab? Yeah, right. He's all right, Jack. Stuff the public, they're all worn down by over-taxation, over-work and excessive surveillance anyway; they won't fuss for long... Slap another tax on them (preferably green to take the moral high ground), that'll shut them up.

A parent would have been proud that their child become Prime Minister, or President in days gone by. Today, politicians have to show such dastardly characteristics that frankly, I hope my two steer well clear of politics.