Saturday 12 September 2015

Zero-sum game

If you stay in a hotel, B&B, or chambres d'hôtes in France, chances are that you will be stung for a little tax at the end of your stay: the taxe de séjour.   Sometimes the establishments include it in their general charges, other times it's separated out.  It's normally not a large amount, around a Euro or so, and it's normally levied per person-night.  Its purpose is ostensibly to enhance the area in which you are are staying, to make it more attractive to you, make your stay more pleasant, and thereby also to increase tourism and help the local businesses.

French people mostly holiday in francophone countries, and usually this means France.  The taxe de séjour is levied more or less everywhere, in what is essentially a competition to beggar the neighbour by attracting the tourist over here rather than over there.  It's a zero sum game, and in the end everybody just pays more tax, but perhaps the French countryside is generally better, or more interesting, as a result.

Our area doesn't have a taxe de séjour, but the plan is to introduce one from 2016.  This is to help fill the gaps left by the drop in funding from the central state.  Quelle surprise.  We don't like it, but what can you do?  We had a chat with our mayor about it.  It's likely to be a small amount, something between 50 and 70 centimes, so not too onerous, and, he promises us, it's to help us in selling our gîte.  This is the stated purpose, of course, to attract tourists, to bring us more customers.  Right.

Our gîte has capacity for 30 people, and we always rent the whole place to a single group.  So it's a candidate for the shortlist if you are organising a family or other kind of reunion, say for a birthday, to celebrate a marriage anniversary, and so on.  What our clients don't do is decide to visit one or more of the local attractions, and then wonder where to stay.  If anything it's the other way around: once they have decided they're coming to us, they look around for things they might do while they're here.  Our contention is therefore that the local tourist bodies should be compensating us for the people we attract and who then spend money in the local touristy places, not the inverse.  Not going to happen, of course.

We got detailed news of the tax plans a little while back.  Whereas hotels will be billed a person-night rate, we hear that the civil servants can't be bothered to verify all the fiddly amounts coming from furnished holiday lets like ours, and therefore we, and other owners of such lettings will be expected to pay a fixed amount per year.  It will be calculated on the basis of a fixed person-night rate (about twice that for hotels - why?), multiplied by the capacity, dropped back by 50% to allow for less-than full occupancy, and applied to every day that the place is, in principle, open.  We are not happy.

Our place is, (at the moment) open for business all year (we take holidays as and when gaps in the lettings permit) and most of our clients stay for at most two nights of the weekend.  The bottom line is that if applied in its current form to our availability times as currently managed, we have a new tax of just under €4,000 per year to collect from our customers.   And the person-night tax rate is about 4 times the originally projected amount as a result.   We and others have made our protests, but we will have to see what happens.

I have a number of problems with the whole thing:

1) It shows a huge disconnect between the taxing bodies and the businesses they are supposed to serve.  It's not difficult to ascertain the average occupancy rates for tourist accommodation in this area, and they are vastly different from the basis used for this calulation.

2) It's a fixed amount to pay per year, regardless of the number of customers, and hence revenues, hence profits.  France is notoriously hostile to small businesses, and one of the reasons is the amount of the fixed charges (charges de structure) that you have to pay regardless of your revenues, profits or losses.  This is an extra, special one for people in the tourist accommodation business.  No clients in 2016?  Tough, that's 4 grand to you, squire.

3) How much do we collect?  We don't know on the 1st January, how many customers we're going to get that year.  So how to apportion the fixed tax between them?  What happens if we collect too much?  Too little?



Helen Devries said...

Hotels are hostile to the gite and BandB sector and have a lot more you are penalised.

One of the problems in the area in which we used to live was finding anywhere to take people for large gatherings....the hotels certainly couldn't do it - and an operation like your would have been a godsend. As it was people were farmed out through family, friends - and the odd BandB - which made it difficult for people to let their hair down sure in the knowledge that they would not have to drive or have taxis arranged.

Of course the forfeit - arrived at by use of the dreaded coefficients - is convenient for the taxman and the fact that it bears no relation to the realities of your business concerns them no a wit.

When will France wake up to the importance of small business for a strong economy.....

James Higham said...

France will never wake up because it is not structured around the business model, being politically socialist in mindset. Slugging existing businesses is all part of that. Any business is a cash cow to the government.

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