Learning to do the books the French way

As you might expect bookkeeping in France and the UK follows the same principles but the French tax authorities have different rules on what you can and can't deduct as expenses.  This post is about my experiences getting to grips with the French system.

My copy of BNC Express arrived in the post and I ripped it open eager to get on with learning about French bookkeeping!  Or to be more accurate, I forced myself to open it, install it and then start to set it up.  That part was fairly easy - the instructions that come with it are straight-forward (as long as you speak French) and are familiar with the principle of keeping books which I do and am. 

The difficulties started occurring when I needed to find out what I could claim for.  Luckily after a bit of trawling, I found the Bulletin officiel des finances publiques-impôts site which gives an up-to-date summary of the rules governing the different types of business.  This is the link for the ones for a sole trader registered as BNC (bénéfices non commercials), but all the ones for other types of business are visible in the menu to the left of the page. 

Beware claims for meals when travelling

Most of it is fairly straight-forward.  The rules governing travel expenses are the most problematic.  Whereas in the UK I used to keep all of my receipts for drinks, food etc. even if I had to be out of the office for a few hours and had a coffee, in France meals can only be deducted if you can't return home, and should not exceed a certain amount set at €18.60 per day in 2018 and from that you need to deduct €4.80 (which they consider you would have spent if at home).  This leaves you with €13.80 per day that you can claim on food.  You must also justify it with receipts.

I got stuck with whether I could claim actual expenses on my trips to the UK as it is more expensive than in France and I had seen that businesses are allowed to let employees have a daily allowance of up to €120 (depending on the country) if they are abroad.  I tried asking on an FB forum, Ladies in Business in France.  Most people couldn't get their head around the fact that I am not a micro-entreprise, but one helpful lady suggested getting in contact with my Association de Gestion Agréée and asking, which I promptly did.  I'm still waiting for a response a month later, apparently I need to ring, not send a message via my online account and as it is now prime holiday season, there's not much point till September!  But several people have since assured me that I can deduct the full amount if I'm abroad, so I've gone with that for the time being.

VAT and other EU countries

VAT was a little tricky as I make purchases on my business trips in the UK which I want to claim back VAT on, and I also buy things from other EU countries which I then need to account for VAT on, and the standard set-up doesn't cater for all of that, but Trefle Rouge who make BNC Express told me to use separate VAT ledger accounts which are easy to set up.

Register to reclaim TVAAny expenses in the UK on which I have paid VAT I can claim back via my online professional tax account.  To do so I had to go to "Adhérer aux services en ligne" which I found under "Gérer mes services" and then register for "Démarches" and follow the instructions.  It takes a few days to get the confirmation paperwork back.  Once you have it you are free to claim the VAT for the present tax year (Jan - Dec for France) up to September of the year after, but if you want to claim for a period that straddles 2 years you have to make 2 separate claims.   I've decided to leave this year's till the beginning of next year so that I only have to make one claim.  I shall then put another in just before Brexit after which sadly it will no longer be eligible to claim back.

The accounting for sales to other EU countries was easy as BNC Express is already set up with a ledger for "Honoraires encaissées TVA intracommunautaire", so you just pick that.  The thing I found more difficult to account for was the VAT for purchases from other EU countries where you are not charged but have to account for it in the books.  This is known as "autoliquidation" in French.  All of my purchases so far have been on expenses as I don't have a bank card for my professional account, so I ended up putting them into "opérations diverses" where the VAT is entered separately to make it easier to put both the credit and debit in.  I will find out if I did it right once the holiday period is over and I can talk to someone about it.

Balancing the books

I've now entered 6 months' worth of books, and made sure that both bank accounts, the cashbook and sundries ledger all balance, so I'm feeling pretty pleased with myself.  All I need to do now is check that I am accounting for the EU VAT in the right way, then send a month to the Association Agréée for them to check that I'm doing everything right.  Fingers crossed as I don't think I can face doing it all again!