Micro-Entrepreneurs – Covid Financial Support
Tuesday 04 May 2021
The range of financial and general business support available to micro-entrepreneur business owners during the present crisis.
As we have previously reported, all self-employed business owners are able to benefit from Covid grants put in place during the current crisis.
Not all grants are available to those who run their business as a micro-entrepreneur, but there are two schemes in particular to which they are eligible.
Fonds de Solidarité
The solidarity fund is a financial support mechanism that first excluded micro-entrepreneurs, but has now been extended to them.
Unfortunately, as with most such schemes, it is complex, and the amount and eligibility conditions vary from month to month.
To apply you need to go to your personal space on in the government tax website Impots.gouv.fr.
The application for aid is available in the month following the loss of turnover, and can be accessed up to two months later.
All micro-entrepreneurs who have suffered at least a 50% loss of turnover can apply for aid from the solidarity fund of up to €1,500.
If you belong to the S1 or S1 bis sectors, or if your activity has otherwise been closed by administrative order, (with a loss of turnover of at least 20% in the latter case), the aid is up to €10,000, or, for who so wish, an amount equivalent to 15% or 20% of the turnover, up to a limit of €200,000.
In addition, since 31st March, self-employed owners eligible for the solidarity fund can benefit from compensation on 90% of their fixed costs, for the period January to June 2021.
Deferral of Social Security Contributions
In the event of financial difficulties, you can modulate the payment of your social security contributions (cotisations).
You can choose to pay only part, or to not pay them at all.
Deferral of the contributions does mean that you will need to pay them later, but the repayment plan has yet to be announced by URSSAF, the social security agency.
If you wish to defer your cotisations, you need to go to the dedicated URSSAF micro-entrepreneur portal at URSSAF.
Whether you choose to defer all or only part, you will need to declare your entire turnover.
Reduction in Social Security Contributions
Some micro-entrepreneurs benefit from a reduction in their contributions.
This is the case for those whose main activity falls within sectors S1 and S1 bis, i.e. the culture, sport, leisure and events sectors, and for companies whose activity depends on these sectors.
As above, they must have suffered a loss of turnover of at least 50% over one month or 15% over one year.
Self-employed entrepreneurs whose activity is administratively closed are also concerned (sector S2).
The measure concerns the period from November 2020 until the end of the measures of restriction.
The self-employed owners concerned can then deduct their entire turnover for the months concerned from the payment of social security contributions.
For business owners eligible for this total exemption, additional aid is granted on the outstanding contributions, amounting to €600 per month of eligibility for businesses in sectors S1 and S1bis, and €600 euros for the month of November for businesses in sector S2 that are administratively closed.
An identical scheme had already been applied for the March to May containment periods.
This reduction will be applied in 2021 on the final 2020 personal social security contributions due to Urssaf, in addition to the first reduction.
Any remaining amount will be carried over to the final personal social security contributions calculated in 2022.
Reduction in Income Tax
Unlike the payment of social security contributions, there is no provision for a systematic reduction in income tax for the sectors most in difficulty.
Nevertheless, micro-entrepreneurs facing payment difficulties due to the crisis can request a payment plan from their tax office to spread out or postpone the payment of their taxes due.
It is also possible to benefit from payment delays on a case-by-case basis by approaching their tax office.
If this is not enough, it is also possible to apply for a tax rebate on income tax, and business rates.
Government Backed Covid Loans
The self-employed can access the state-guaranteed loan scheme.
They are available until 30 June 2021 and can represent up to the best 3 months of turnover in 2019, or two years of payroll for innovative businesses or those created since 1 January 2019.
Repayment is not required in the first year and the loan can be amortised over a maximum of five years.
Self-employed entrepreneurs will also be eligible for 'Relance' equity loans and 'Relance' bonds, available between April 2021 and June 2022. They will concern structures with a potential for recovery penalised by a loss-making operation during the financial year.
Direct loans are also available from the government to companies that have not found any other financing solution.