Your micro-BNC declarations in 4 steps: the memo to make sure you don't forget anything!

How do you know which micro-BNC declaration applies to you?

If you work as a self-employed professional, you come under the non-commercial profits scheme (BNC). As long as your turnover does not exceed a certain annual threshold, you can benefit from the simplified micro-BNC scheme.

As with all accounting and tax declarations, there are specific rules that apply depending on your activity and your situation. Let's take a look at which ones, when to declare under the micro-BNC scheme, and go through each step to simplify your task!

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The micro-BNC scheme: reminder of obligations

As a self-employed professional, you must declare your income. This income is subject to income tax (impôt sur le revenu) on the profits from your business.

☝️ How do you know if you are a micro-BNC?

To begin with, let's look at the basics of the micro-BNC scheme:

• You are a self-employed professional.
• You are automatically eligible from your first two years in business, and thereafter if your income does not exceed a certain threshold.
• Your taxable profit corresponds to your turnover, from which are deducted expenses by applying a flat-rate allowance of 34%.
• You can keep simplified accounts, the only accounting requirement being that you keep a revenue journal to keep your accounts up to date.

[Tuto] How do you declare your micro-BNC income?

Under the micro-BNC scheme, your tax obligations are simplified. Here are the different declarations to be made and how to complete them in practice.

Step 1: Find out the micro-BNC eligibility criteria

What is the 2020 micro-BNC threshold? This depends on when you make your declaration.

To be eligible for the micro-BNC scheme, you must meet the following conditions:

• if you declare your 2019 income in 2020, your annual turnover excluding VAT must be less than €70,000.
• if you declare your 2020 income in 2021, your turnover excluding VAT must not exceed €72 ,500 .

☝️ To qualify for this scheme, your income must not exceed the ceilings set out above for two consecutive calendar years. In other words, your income must remain below these thresholds in both N-1 and N-2.

If your income exceeds the threshold, you will be subject to the controlled declaration regime for year N. This takes effect from 1 January of the year following the two years in which the threshold is exceeded.

Step 2: filling in your tax returns

Remember that the taxable amount depends on the turnover actually received in a given year. You therefore need to know the exact amount of your annual income.

Types of income to be reported under the micro-BNC scheme

• fees
• income replacements (such as maternity or paternity leave, etc.),
• benefits in kind,
• daily allowances,
• subsidies obtained in connection with your self-employed activity.

Documents to use for your tax returns

• the 2042 micro-BNC declaration , which corresponds to the overall declaration of income for all members of the tax household;
• the 2042-C-PRO supplementary tax return, used to declare income, tax reductions and tax credits.

How do I complete the 2042 C Pro micro-BNC tax return?

1. Download the 2042 C-PRO supplementary tax return form from the Public Service website.
2. Go to the section entitled "Revenus non commerciaux professionnels", under the category " Régime déclaratif spécial ou micro-BNC", under "Revenus imposables".
3. Enter your total income in box "5HQ". Enter the gross taxable amount, i.e. excluding VAT, without calculating or deducting the 34% allowance. Any capital gains or losses may be added to this amount.

Step 3: Choose the tax payment method

As a microentrepreneur under the micro-BNC scheme, you can choose to pay income tax in full discharge of your obligations.

If this is the option you choose, declare your income in box "5TE" in the section illustrated below:

☝️ In this case, the income tax deducted corresponds to 2.2% of your sales, each month or quarter.

You report all the revenue you receive, and the tax authorities calculate the 34% standard allowance.

Step 4: Completing the URSSAF declaration

As a micro-BNC professional, you pay social security charges at a flat rate applied to your profit.

• If you are a self-employed professional covered by the general scheme, you must complete the social declaration for the self-employed (DSI) on the net-entreprises.fr website;
• If you are an approved medical practitioner or auxiliary, you must send your URSSAF a specific income tax return (DSPamC);
  
• If you are a micro-BNC entrepreneur, you are automatically covered by the simplified micro-social regime . You must declare and pay your social security contributions on the autoentrepreneur.urssaf.fr website on a monthly or quarterly basis, even if you have not received any income during the period.

When to declare micro-BNC income?

Micro-BNC income declarations must be made every year, during the second quarter, between April and June.

How can online declarations be made easier?

In order to meet your tax, social security and accounting obligations, software has been designed specifically to manage your BNC formalities with ease. The aim is to save time by automating many tasks and eliminating the need for manual input.

• Indy, a solution dedicated to self-employed people (healthcare professionals, legal professionals, consultants, etc.) who are self-employed under the BNC scheme. In particular, it automatically generates and uploads your micro-business declarations : turnover declarations to URSSAF, VAT, etc.
  
• Gest4U, a tool designed for microentrepreneurs, the self-employed and freelancers: among other things, you can generate your returns directly from the application, in just a few clicks.

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Micro-BNC: how do you switch to the controlled declaration?

In practical terms, you can opt out of the simplified micro-BNC scheme and switch to the controlled declaration scheme. Here are the steps in the procedure:

1. All you have to do is file a 2035 tax return by May of year N for income earned in year N-1, or send a request on plain paper to the tax authorities.
2. Once the option has been taken up, it is tacitly renewable every year.
3. To revert to micro-BNC, your Service des Impôts des Entreprises (SIE) must be notified of the new option before 1 February of the current year.

As we have seen, the formalities and returns for micro-BNC are very straightforward, which is one of the main advantages of this system.

However, it is sometimes more advantageous to opt for the controlled declaration system , even if your income remains below the aforementioned turnover thresholds. This is the case when your deductible expenses exceed the 34% flat-rate allowance.

It's up to you to decide which option is most profitable for your business!