Covid-19 – Hardship Grants for Small Businesses
Tuesday 24 November 2020
The government have extended and revised the financial support available to small business owners as a result of Covid-19. Updated Nov 2020.
The package of assistance has been put in place until at least the end of December 2020, with provision for renewal if necessary.
UPDATE: January 2021. The assistance has been continued, largely along the same lines. The text below covers the period to Dec 20, but much the same rule and procedures continue to apply.
A solidarity fund (fonds de solidarité) has been created to provide hardship grants to small business owners.
The fund provides income support to small business owners, with the amount depending on your circumstances.
In order to qualify for the solidarity fund at the end of September, October and November the business must have EITHER:
- Been ordered to close by administrative order between 25 September 2020 and 30 November 2020; OR
- Suffered a loss of turnover of at least 50% between 1 October 2020 and 30 November 2020.
To evaluate the loss of 50% of turnover, there are several comparisons that can be used:
- either in relation to the same period in 2019 OR in relation to the average monthly turnover for the year 2019;·
- or, for businesses created between 1 June 2019 and 31 January 2020, in relation to the average monthly turnover between the date of creation and 29 February 2020;·
- or, for businesses created between 1 February 2020 and 29 February 2020, in relation to the turnover achieved in February 2020 and over one month;
- or, for businesses created after 1 March 2020, in relation to the average monthly turnover achieved between 1 July 2020 (or the date of creation of the business) and 30th September 2020.
i. Enforced Closure
Those businesses required to close by administrative order can claim assistance up to the level of their turnover (excluding cancelled orders) to a maximum of €333 per day, ie up to €10,000 per month. The assistance is limited to a maximum of €1,998 for the period 25th to 30th September.
ii. Within Curfew Zone
In a curfew zone, businesses that justify a loss of turnover of at least 50% between 1st and 31st October are eligible for aid for the month of October, the ceiling of which varies according to the sector:
- all businesses may receive aid equal to the amount of their loss of turnover, up to a maximum of €1,500;
- businesses in the eligible sectors can receive aid equal to the amount of their loss of turnover, up to a limit of €10,000;
- businesses in related sectors can benefit from aid equal to the amount of their loss of turnover, up to a limit of €10,000, if they justify having lost 80% of their turnover between 15 March and 15 May 2020 (this condition does not apply to businesses created after 10 March 2020).
iii. Outside of Curfew Zone
Outside the curfew zones, businesses in the eligible sectors which justify a loss of turnover of at least 50% (and a loss of 80% of their turnover during the spring confinement for those in the related sectors (unless created after 10 March) are eligible for aid for the month of October, the ceiling of which varies according to the loss of turnover:
- businesses that have lost between 50% and 70% of their turnover may receive aid equal to the amount of their loss of turnover, up to a limit of €1,500;
- businesses that have lost more than 70% of their turnover can receive aid equal to the amount of their loss of turnover, up to a limit of €10,000 AND 60% of the average monthly turnover for 2019.
The list of eligible business sectors and those in related sectors can be found at Secteurs d'activité.
If you are in receipt of a pension, the amount of assistance will be reduced by the level of the pension.
An application for closure aid for the end of September/October is now available and must be made within 2 months after the end of the monthly period in question.
An the application for aid for the month of October has been available since 20th November and must be made before 31 December 2020;
An application for November will be available from 4 December and must be made before 31 January 2021.
To make application for the assistance you need to go into your account at Impots.gouv.fr, using your 'Espace particulier' (and not your 'Espace professionel'). In 'Messagerie sécurisée' choose 'Ecrire' and select 'Je demande l'aide aux entreprises fragilisées par l'épidémie Covid-19' and proceed to complete the application. You can follow the progress of your application from your account.
If you are a micro-entrepreneur who only declares their income annually (long-established business) you need to make application through Secu-independants.fr.
Some businesses may also be entitled to additional support (aide complémentaire forfaitaire) of up to €10,000.
This assistance is available on condition that:
• They have obtained the hardship grant;
• They are unable to settle outstanding debts due within 30 days;
Application for this additional support needs to be made through your regional council (conseil régional).
Separately, there is also a grant of up to €1,000 available from the Conseil de la protection sociale des travailleurs indépendants (CPSTI), which is cumulative with other grants. It is capped at €500 for micro-entprepreneurs. Find out more at AFE Covid.
Suspension of Taxes
In order to support cash balances, businesses have been granted a delay in the payment of taxes and social security contributions, but such charges have not been cancelled.
Indeed, Gérald Darmanin, Minister of Budget, has stated that those who can pay must continue to do so: "Les entreprises qui peuvent payer des impôts doivent continuer à le faire. Ce n'est pas une remise générale des impôts et cotisations. Nous demandons la solidarité et bien sûr, l'honnêteté".
Nevertheless, Bruno Le Maire, Minister of the Economy and Finances has stated that in due course, and in exceptional circmstances, cancellation of the charges will be considered, stating: "Il pourra y avoir une annulation des charges, ce sera au cas par cas. […] On va regarder à la fin du confinement les secteurs qui redémarrent et vont rembourser leurs charges et les autres. Le critère sera : est-ce que c’est la faillite qui menace cette entreprise, alors là on pourra envisager des annulations."
Although the type and level of assistance is broadly similar for all small businesses, some differences in treatment apply depending on the nature of your business and the tax structure you have adopted, whether régime réel or micro-entreprise.
All existing tax and social security arrears recovery procedures have been suspended.
The following notes concern primarily those not using a company structure through which the business is run.
Self-employed business owners pay income tax either on an ‘on account’ basis each month or quarter.
The amount you pay can be changed at any time at Impots.gouv.fr, in your ‘compte particulier’, and buy selecting ‘Gérer mon prélèvement à la source’, to make the change.
It is also possible to suspend the payment of ‘on account’ payments for up to three months, or for one quarter for those who pay on a quarterly basis.
All changes made before the 22nd of the month take effect the following month.
If you are a micro-entreprise and you have elected to be taxed on the basis of ‘micro-fiscal/prélèvement libératoire', under which you pay a fixed rate of income tax each month, this will not apply to you, as you only pay tax on the basis of your cash receipts each month or quarter. If you have no receipts, then you pay no income tax. You can, however, also make application to your local tax office to suspend payments.
Social Security Contributions
i. Régime Réel Business
The government have suspended the payment of social security contributions due for November. The charges may also be levied quarterly.
It is also possible to seek a delay in payment or make an adjustment to the level of the charges to take account of a reduction in revenues. No penalties will be imposed.
Those who are either artisans or commerçants (excluding micro-entrepreneurs) can do so in their account ('Mon compte') on Secu-independants.fr, or by e-mail from the same website, choosing the box heading 'Vos cotisations', and then selecting 'Difficultés de paiement'. You can also try ringing them on 3698, but reports are widespread of delays in obtaining a response.
If you are one of the professions libérales you need to go into your URSSAF account and connect to 'Une formalité déclarative' and then select 'Déclarer une situation exceptionnelle'. You can also ring 3957 although there is a small charge. Once again, you may find it difficult to get a response on the phone.
Where your charges are being paid by direct debit, you need to cancel it with your bank. If it has been paid, or cannot be cancelled, you need to discuss with URSSAF.
The Déclarations Sociales Nominatives (DSN) are being maintained, but if you wish to delay payment, you can either reduce the amount or enter zero.
In the event of major difficulties, self-employed persons may also apply to the CPSTI (Conseil de la protection sociale des travailleurs indépendants) for partial or total relief from social security contributions or for exceptional financial aid. You need to complete an Application Form and send to URSSAF. Those in one of the professions libérales affiliated to the CIPAV should make application to their CIPAV social insurance body.
Once again, it is possible to suspend payments, whether you pay monthly or quarterly. You simply need to declare '0' on your turnover figure for the period. You may also reduce the level of the payment.
The payments will need to be made at a later date, to be advised.
You can also seek assistance from CPSTI (or CIPAV) as above.
Those who have opted for monthly payment of the Cotisation Foncière des Entreprises (CFE) have the option of terminating the payment contract and deferring payment until the due date, which is 15th December. Alternatively, you can suspend payments for three months. You need to go into your account at Impots.gouv.fr to do so.
The same applies to the property tax (taxe foncière) on a business premises.
In exceptional circumstances, it is possible to also obtain annulment of the taxes, subject to an examination of your circumstances. You need to send a mail to the tax office, setting out your change in circumstances.
No suspension of payments is possible. VAT returns and corresponding payments must be made on the usual due dates, otherwise penalties for late payment and a 5% surcharge will be applied. The government has stated that it has put in place an accelerated procedure for VAT reimbursements.
If you have children under 16 that you are obliged to look after preventing you from going to work then you can apply for a Déclaration de maintien à domicile, using the process normally available for obtaining sickness benefit. Those in CIPAV are not eligible.
Commercial Utility Bills/Rents
The utility providers (gas, electricity and water) have been instructed to respond positively to a request by a business for a delay in the payment of their charges.
The government have instructed that rents on business premises be suspended for small busienss owners eligible for the hardship grant. A landlord is not permitted to impose penalties or terminate the lease. Rents will remain due, but until the public health crisis is over landlords cannot insist that the rent is paid.
In addition, where a tenant is formally prevented from entering their property it may be possible for them to claim force majeure to relieve them of any rental obligation. This may arise, for instance, where a commercial centre is closed by the landlord. Best to discuss with your landlord.
Many councils, inter-communal, departmental and regional, have put in place support measures for local businesses.
In most cases, it is suspension or waiver of rent when the council is the landlord, and in a fewer number of cases direct financial support, either through loans or grants.
You need to check on the website of your council to find out what is available and how to apply.
For the latest in-depth analysis, subscribe to our news service at France Insider.
France Insider is a subscription-based offer which has replaced our previous free Newsletter.