Opting for the auto-entrepreneur status is the right choice for young entrepreneurs who don't want to be overloaded with red tape.

Like other legal forms, the auto-entreprise has its own specific charges, which can be helped to reduce the overall cost of the business. Over and above the tax aspect, this type of structure requires compliance with a certain sales threshold. This ceiling is €82,800 for commercial activities and €33,100 for services.

This sometimes restrictive threshold will potentially double in 2018 , much to the delight of auto-entrepreneurs.

For greater tax flexibility, here are 5 valuable tips for reducing your taxes

CFE: change the address of your registered office

Having a head office is unavoidable for all types of company. This administrative obligation can quickly lead to significant costs in terms of moving, monthly rent and CFE fees.

The "cotisation foncière des entreprises" (CFE) must be paid annually, and is calculated according to the zone in which the company is located. If you set up your head office with a commercial domiciliation company, the cost of this CFE will be minimal, while benefiting from an address in a well-known district.

Benefit from assistance

When setting up a new business, it is possible to benefit from assistance to help you get off to a flying start. The most common and advantageous form of assistance is ACRE, or aide aux chômeurs ou repreneurs d'entreprise , which has been in force since May 2009.

The aim is to enable auto-entrepreneurs to benefit from a substantial exemption from social security charges for the first three years of business. Depending on the type of activity (craft, commercial or liberal), the rate of charges will vary and will be progressive each year for three years.

Declare all expenses correctly

Declaring your social security contributions is essential if you want to run your business legally. Each quarter, auto-entrepreneurs must declare their sales online or by post. Social charges are calculated in proportion to the amount declared, and are paid directly online or by cheque if the declaration is made by post.

If the auto-entrepreneur fails to meet the declaration deadlines, he or she may be subject to financial penalties.

This is why it's important to declare your expenses properly, so you don't end up paying additional costs that don't need to be.

Simplified micro-tax system

The French government has set up a simplified micro-tax system for auto-entrepreneurs.

The aim of this special scheme is to reduce the amount of tax and accounting declarations, while allowing tax to be paid on a flat-rate basis rather than on an actual basis.

To do this, auto-entrepreneurs must enter the amount of their sales or revenue on their annual tax return. The tax authorities will then automatically calculate the value of the taxable profit by applying a flat-rate allowance for all professional expenses.

Only sole proprietorships with sales up to a certain threshold can benefit from this simplified micro-tax regime.

Opting for the flat-rate withholding tax (prélèvement forfaitaire libératoire)

As an auto-entrepreneur, you can also opt to pay income tax at source. This involves paying both income tax and social security contributions at once. 

Unlike the traditional micro-business system, the income generated will not be subject to the progressive tax scale via specific tax brackets. The amount of income tax payable will be calculated as a percentage of sales.

This ratio will depend on whether the auto-entrepreneur carries out a commercial, craft or liberal activity. To apply for the prélèvement forfaitaire libératoire (flat-rate withholding tax), you need to contact the relevant CFE when you set up your company. Micro-entrepreneurs can take advantage of this system up until the third month following the month in which they declare their activity.

Conclusion

All these tips and tricks can help reduce the self-entrepreneur's tax bill.

But 2018 is likely to turn the world of auto-entreprise upside down!

In addition to the doubling of the sales ceiling, it is the "prélèvement à la source" (withholding tax) that will introduce a system specific to auto-entreprises.

All self-employed people will now be able to pay their income tax by means of instalments calculated by the administration. These instalments will be based on the previous tax situation, and will be deducted on a monthly or quarterly basis. However, as the RSI gradually comes to an end, there will undoubtedly be changes in terms of social security charges and taxes.