The French minister responsible for artisans and small businesses has backed down over changes to put a time limit on the auto entrepreneur scheme which is popular with British people working in Normandy.
But instead Sylvia Pinel now plans to drastically lower the thresholds which an auto entrepreneur can earn before having to move to another business regime, a move that is also not popular with organisations representing auto entrepreneurs who have now announced a summer of protests.
After an onslaught of complaints from organisations representing auto entrepreneurs against her plans to introduce a time limit to being an auto entrepreneur, Mrs Pinel says that as long as they donâ€™t exceed new turnover thresholds they will not have to switch to an ordinary business regime.
However, she now plans to reduce the turnover threshold for services, which includes artisans and independent workers from â‚¬32,000 a year to â‚¬19,000. If they earn more than the threshold for two years in a row they will have to change. Similarly the threshold for trade will be reduced from the current â‚¬81,500 to â‚¬47,500.
She is also making the system more complicated by saying that those who have to switch regime can switch back again if their turnover drops again within two years.
Mrs Pinel told a Council of Ministers meeting in Paris that she is committed to reforming the system as it has â€˜distortedâ€™ competition, particularly among artisans. The critics of the scheme, most organisations representing artisans, have claimed that auto entrepreneurs are under cutting prices.
Auto entrepreneurs who stick to the new thresholds will be able to continue with their business registration but those who exceed it for two years in a row will have to re register under a different business regime such as a micro enterprise or simple reel. Those going over the thresholds will be given advice and have to meet with a business advisor within six months to discuss their options.
Mrs Pinel also said there would be financial help for those having to switch regime in the form of transitionary social contributions and tax.
The reforms will also make it compulsory for new auto entrepreneurs to provide evidence of their qualifications when they register and to take out liability insurance.
A bill is now due to be presented to the Council of Ministers by the end of July and the reforms would take effect on 01 January 2015.
But one of the main organisations that represents auto entrepreneurs, the Auto Entrepreneurs Federation, is disappointed with the lowering of turnover limits. â€˜The government would not dare to limit the salaries of top executives. The reforms will make the system more complex. It sends a very negative message to entrepreneurs,â€™ said its president GrÃ©goire Leclercq.
â€˜Auto entrepreneurs are ordinary workers who have simply found the energy to create their own jobs. I fear it will force people into working on the black and moonlighting,â€™ he explained.
The federation is continuing to campaign on behalf of auto entrepreneurs. â€˜We will continue to fight for the right to create our own jobs. Next week we will be prostesing outside jobs centres across France. Throughout the summer we will take our battle to Parliamentarians,â€™ added Mr Leclercq.