When the full regime applies

Crossing 945 000 € of turnover in trading moves a business from the simplified regime to the full one. That is not a change of rate: it is the step from seven schedules to a complete filing package, with a detailed balance sheet and mandatory electronic transmission.

Three regimes, two thresholds

Industrial and commercial profits fall under three quite distinct regimes. The micro-business applies a flat-rate allowance and keeps no full set of accounts. The simplified regime requires proper accounts and a lighter filing package. The full regime requires the complete set of schedules.

Moving from one to another depends neither on legal form nor on headcount, but solely on annual turnover excluding tax. Two sets of thresholds coexist according to the nature of the activity, and confusing them misplaces a business.

A mixed activity is split. Turnover from sales and turnover from services are each compared with their own threshold, and exceeding either one is enough to move the whole business into the higher regime.

The change does not take effect in the year of the overshoot but in the following one. That lag leaves time to organise, provided the counter has been watched: discovering the move at closing leaves no margin at all.

Filing thresholds are not the same as those governing value added tax, which follow their own logic. A business may fall under the full regime for its profits and under a different one for its tax returns.

Companies liable to corporation tax use exactly the same schedules once they exceed the thresholds, together with a different profit return. The package itself does not change shape according to the way the profit happens to be taxed.

Opting in, and the reasons for it

A business below the thresholds may opt for the full regime. The choice looks counter-intuitive, since it increases obligations, but it answers precise needs that have nothing to do with tax itself.

• A banker requiring a detailed balance sheet before granting finance
• A buyer or investor wanting readable statements over several years
• A fast-growing activity, to avoid a change of regime mid-trajectory
• A need for analytical detail that the lighter package does not provide

The option can be withdrawn, but not at any moment. Withdrawal requires a step with the tax office before a deadline preceding the year in which the business wishes to revert, which rules out any last-minute decision.

What the complete package requires

A sole trader under the full regime files a profit return together with the balance sheet and profit and loss schedules, then those covering the composition of capital and any subsidiaries held.

Added to these, according to the situation, are schedules for fixed assets and depreciation, provisions, maturities of receivables and payables, and capital gains and losses. None is optional once the situation triggers it.

Transmission is necessarily electronic, through a structured data exchange procedure reserved for accounting professionals. Unlike the simplified regime, no online data entry route whatever is open to businesses under the full one.

The calendar remains that of profit returns: filing takes place within fifteen days of the second working day following the first of May, for financial years ended on the thirty-first of December.

A year ending mid-calendar follows its own calendar, counted from its closing date. Shifting the closing date to spread workload is possible, but the decision binds the comparative presentation of later years.

The cost of the move is measured above all in time rather than in fees. Producing a detailed balance sheet requires full reconciliation of third-party accounts, a properly valued inventory and filed supporting documents, three tasks the lighter regime tolerated far more loosely.