Hello, following the various debates concerning the VAT for sole traders, I am wondering about the impact of the 2026 finance bill, which plans to lower the threshold for selling goods for sole traders to €37,500. For you professional sellers present on Vinted and other platforms, have you considered this, what is the sustainability for your business?
VAT is a complex subject for self-employed individuals. Basically, we are not subject to it until a certain threshold. So, it’s true, it allows us to have more competitive prices since we are tax-exclusive, but the downside is that, on the other hand, we cannot reclaim it on equipment and supplies; we pay everything including tax. It is entirely possible to opt for it and thus be able to equip ourselves with professional equipment excluding tax, but we will then have to charge it to customers and then pay it back. This adds a lot to management and accounting; it becomes much less simple than the tax-exclusive status, since in that case, we would have to keep real accounts with financial transactions. I think, for example, that implementing a 5.5% VAT on sales from the first euro, and being able to reclaim 5.5% on our professional purchases would be a good compromise. However, if the government suddenly decides to make all self-employed individuals subject to VAT, it will be very complicated; it will really complicate the status, but on the other hand, reclaiming even 5.5% on our professional supply purchases would be an interesting economic relief. You don’t get something for nothing. Personally, I sometimes do simulations. What is certain is that we cannot suddenly increase prices by 20%; that’s a commercial heresy! So, I think a compromise of 5.5% to charge customers, and that we can reclaim 5.5% on our professional purchases would be a good compromise.
Personally, I buy my stock from individuals at garage sales or flea markets, so whether it’s a 20% or 5.5% VAT… in any case, I won’t be able to reclaim anything. So what’s going to happen is that I’ll have to wisely monitor my turnover so as not to exceed this threshold 
And from what I read here and there, I’m not the only one thinking like this… On the other hand, for those who boast about making €6,000/€7,000 in turnover per month on Vinted and who are used to this « comfort of life », it might be complicated indeed!
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There is a system for the occasion where you only pay VAT on the margin. But I don’t know it well and I suppose that this requires being hyper-rigorous about the justification of purchase prices, so proof of purchase to be filled out for each purchase of used goods (therefore very cumbersome to ask for systematically)
In fact, it mainly depends on the margin we make. Basically, at 2 it balances out and is neutral. We lose money beyond that. On the other hand, below that we can be profitable (in fact, we pay less VAT than if we paid it on purchases without recovery). But it can even be advantageous to recover on our expenses, or even to include things as expenses that were not before since they were useless (purchase of a vehicle, various internet and phone subscriptions, supplies, etc.). In my case, I had calculated that for my sales activity, it didn’t change much financially. For the liberal part, it’s a disaster though (in addition to the 5-point increase in contributions). But above all, it’s the administrative side that I dread.
Also, don’t forget that electronic invoicing will follow as a consequence if we are subject to it.
I think we shouldn’t stress too much and wait and see what happens. It seems to be going badly on this point, but for the budget in general.
Thank you for this feedback. From my perspective, I think we will need to show agility, even « cunning, » to manage to stay below this threshold. Now, why change a system that seemed to work and allowed us to « create work for ourselves » without having external burdens that could be heavy, like an accountant, electronic invoicing, and other consequences inherent to this change.
so we have some elements of an answer.
It’s mainly the company that’s pushing for it, even though it’s been shown that there’s no unfair competition. The more malicious reason that seemed to emerge is that they’re having major recruitment difficulties and would like to get back all the people who left to set up their own small businesses.
Another thing that came up is that large construction companies are asking for small businesses to charge VAT, but some wouldn’t agree to their subcontractors charging it on their rates. We heard this from some who had prepared the ground with their clients when it came out last January.
Basically, to put it simply, a subcontractor invoices a construction company €2000, which should become €2400 with the client recovering €400 in VAT (so, in absolute terms, a neutral operation), but if the small business maintains its price at €2000, it can recover €334, and therefore the subcontracting would only cost them €1666 in reality.
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The death of many sole proprietorships.
The sole proprietorship (auto-entrepreneur) is an economic model, based on « high margins » and little investment, often from home, most often with sales and purchases through individuals. It is particularly well-suited to second-hand goods; or to services, often local, that companies do not want to provide because they are not profitable enough or too restrictive (travel, hours, basic costs) - No competition because they are not the same activities, the same customers, the same products.
If VAT is applied, the model no longer holds and it shifts to a traditional company. However, in a traditional company, many models that work well in the sole proprietorship format no longer do so in a traditional company, which often operates on a real profit basis.
For a sole proprietorship subject to VAT, you already need a small structure, perhaps an office, an apprentice, software, suppliers, and to have reached a certain turnover to be economically viable.
We are heading for a wall, and this measure is just a drop in the ocean; a step forward into the unknown.
A turnover of 37,500 per year is 3,000 per month. If you have a 50% margin, including everything, you are left with a net of 1,500 euros, which is a minimum wage. (Without paid leave, sick leave, pension contributions, so in reality less than a minimum wage). On top of that, they want to add 16.66% to be paid back? It’s just not possible.
And many already do not achieve 3,000 euros in turnover per month. Because after that, they will go down to 2,500, then to 1,500, then to 0.
I also think that there is a slow and insidious direction in the pipeline that will impose all transactions, even between individuals. The implementation of DAC7, directly put on tax returns, which many leave for fear, is a step.
Electronic invoicing is also part of this plan. etc.
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That’s especially the problem.
Regarding VAT, the impact is not the same depending on the activities, the business model, etc. … Some would even benefit (especially those who have companies as clients and who have expenses)
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Indeed, « withholding tax at source » is a very fashionable expression.
We can also add the attempts to eliminate cash, which would kill cash-in-hand sales or flea markets, or would require using apps to transfer money, but with a digital trail and therefore the possibility of imposing a direct tax. Especially since I think that the free nature of these apps will disappear if cash truly disappears one day.
Afterwards, I wouldn’t be too shocked if there was some cleanup among individuals. Some people really abuse it (I’m not talking about those who make a few euros on the side).
Regarding companies outside the EEA and electronic invoicing, I believe the workaround will be to process all small purchases as expense reports. Therefore, no change from the previous situation: no need to establish a PDP with the employee, i.e., oneself.
Large purchases, over €500 (excluding services), already require separate accounting.
@anon90966608: there is another AE model besides the ones you mention.
This is the high daily rate service. Examples I’ve seen around me: freelance interim management, support and consulting in the luxury sector, typically during fashion week, services for the film industry outside of the « intermittent » status. I’ve at least once in my life been in a situation where I could invoice over €100k in a few weeks. The best solution, by far, was to do it as an AE, because in the year the business is created, you can exceed the ceiling (yes, you only leave the AE system if the ceiling is exceeded for two consecutive years). Nothing prevents you from closing your AE in year n+1, and reopening it in a future year when a similar opportunity arises (benefiting from ACRE, while you’re at it).
I’ve seen freelance service providers who played with the ceilings, for example by invoicing/declaring €150k / €70k / €150k / €70k instead of €110k / €110k / €110k / €110k which would lead to leaving the status. Nothing is simpler than waiting for January to invoice services from the last quarter, and no client complains about it.
but you’re talking about services, not commercial sales? it’s not 85,000.
but I see the idea; we’re talking about specific cases. You can also have many sole proprietorships, or just businesses, I know some had more than 40. with different ape codes. complex arrangements are possible; but we have to go back to the vast majority: people who work alone, legitimately; and who have a passion or a job that allowed them to find a place they couldn’t have elsewhere.
There are also associations that open, receive grants, and then close.
There are some, but it’s a minority, and with DAC7, their income is transmitted. Of course, they can have multiple accounts, multiple names, etc., but in reality, it’s like welfare fraud; it’s very low, even if some exploit it for dubious purposes.
And besides, we know here that it has become difficult to sell, even if you dedicate a lot of time to it. An individual will have the same difficulties, which wasn’t the case before. On eBay back in the auction days, everything went up; I put everything at one euro and let it go, most of the time everything sold for between 15 and 30 euros, shirts, jeans, jackets. An individual could make money, and there was no income control, cash payments were possible. And there, as a professional, there was strong competition from individuals!
Yes, we agree.
But when I see just those I know who do this, I tell myself that it can’t be that marginal. And I’m not talking about those who make 200 bucks a month (you can add a few zeros).
the VAT project has been abandoned…
We are talking about the finance bill project for 2026, where it will be presented.
@anon90966608 : yes, I was talking about services
The limit is 37,500 euros. So, 150k / 70k means you are out of the status.