An Englishman in Strasbourg

My naivety knows no bounds. The very same day as I was hopping on a train to London, another social security bill dropped through the door* asking for an amount that made my knees buckle under me, and collapse, sobbing, to the floor.

Taking into account the bill from my accountant, health insurance, social security, income tax, pension, council tax and TV license - I am seeing some 45+% of my income fly out the door in the last 12 weeks of the year (while I’m preparing my accounts for next year).

Needless to say, much of that 45% has already been spent on boring things like rent and food, so I’m now facing the prospect of having to borrow money to pay the government.

Now, don’t get me wrong, I’m not complaining about the fact of having to pay - there has to be a bit of give and take when you’re on the receiving end of world class healthcare, public transport, municipal libraries etc.. what makes me angry is that I had precisely no warning. Without warning, it’s impossible to plan financially.

But I know I am not alone. Many small businesses and ‘independents’ like myself face just such a trial when entering their third year of business (which I am about to do). This is because of the way the social security payments are weighted to affect you most in the final trimester of your second year and throughout the third year of your business. The logic being to help you out in the first two years when you’re setting up - by postponing your payments to the third year.

Naively I thought that by paying in advance by direct debit, this would enable me to plan ahead. Not so, it seems once your tax return is in the system a load of new recalculated ‘balancing payments’ are billed for in the last few weeks of the year. Thus, if your second year in business was significantly more successful than your first (which mine was because my first year only accounted for 8 months of the year), then the balancing bill can come as quite a shock. Which it did.

No surprise then that most French businesses kick the can in their third year of trading. Without any credit facilities available in France, even a minor miscalculation in SS contributions can send a business under.

It is somewhat fortuitous then that I have been able to retain my UK bank accounts, where I have a fairly decent credit facility to call upon for times such as these, and it goes without saying…

… god bless Barclaycard.

A few weeks ago I was gloating shamelessly over the size of my tax bill. After all, paying out just 5.26% of your income to the state comes as a welcome surprise at the end of the Summer.

What I failed to realise however, was that once your tax return is in the system - all the other bills tumble onto your doormat* in quick succession. Five weeks after paying the tax bill I’m faced with a new bill for pension contributions (slightly more than the tax bill), then a demand for health insurance contributions arrives (approximately the same amount as the tax bill), the following week our tax d’habitation arrives (equivalent to one month’s rent), and today the social security bill arrived (again, approximately the same as the tax bill).

It’s as if it is all timed to remind you to be prudent in the run-up to Christmas. Not a bad piece of advice given the recent goings on. But having already shelled out for train tickets and car rental for the Christmas break, I’m already feeling the pinch before having even paid any of these new bills.

We’ll be staying in Strasbourg next Christmas!

It is at this time of year that the French Tax directorate break the news to the general public as to how much tax they’ll each have to pay over the coming year. While I am sure it is coincidence that everyone’s annual tax bill lands on their doorstep right now, when they’ll away on holiday, I feel the timing is generally a good thing.

Firstly, because it is unlikely to spoil your holiday, as you probably won’t read it until you return towards the end of August. Secondly, having no doubt already spent a fortune on holiday, the annual tax bill adds that extra bit of impetus to get back to work and knuckle down (travailller plus pour gagner plus) for the September ‘rentrée’.

That said, while the British seem to think that the French ’socialist’ tax system is designed to squeeze as much out of the average tax payer as possible, I am happy to report that this is not the case. Take me for example - my little green bill indicates that I am required only to hand over 5.26% of last years earnings to the government. Good eh?

And the trains are still running!