How to handle an URSSAF inspection as an Auto-entrepreneur

If you’re registered as an Auto-entrepreneur in France, you may one day find yourself the subject of an inspection by URSSAF, the organization that collects social security charges.

Having your finances inspected is never fun. Even if you’ve done your utmost to respect all your administrative obligations, there’s often a nagging doubt that some accounting errors have slipped through the net and could land you in trouble.

Firstly, there’s no need to panic. An inspection does not necessarily mean a punishment is imminent. If you’ve ticked all the right boxes, declared your turnover and paid your social charges, you should have nothing to worry about.

In this article we look at URSSAF inspections from top to bottom. We examine what you need to do to prepare, as well as the potential punishments if you don’t.

All self-employed workers with Auto-entrepreneur status in France will be familiar with many acronyms, including the famous URSSAF. It stands for Union de Recouvrement pour la Sécurité Sociale et les Allocations Familiales (Organizations for the Collection of Social Security and Family Benefit Contributions). In a nutshell, it collects social charges from businesses on the State’s behalf.

You declare your turnover to URSSAF and pay them the social charges generated by that turnover. Some do this monthly, others quarterly.

URSSAF has the right to verify that the information you declare is accurate and, although it doesn’t do it systematically with every business, it can come calling to inspect you.

All Auto-entrepreneurs can be exposed to an URSSAF inspection. In most cases, there is no particular reason and businesses are chosen at random.

There are, however, circumstances that might prompt an URSSAF examination, for example if:

• you declare your turnover or pay your charges late;
• you don’t fill in your declaration because you haven’t made any turnover;
• you declare a turnover that exceeds the thresholds that apply to the micro-entreprise status (i.e. €176,200 for artisanal or commercial activities or €72,600 for provision of services);
• you are subject to a personal tax inspection or are penalized by the tax authorities;
• your declarations are not consistent;
• you’ve been reported for carrying out undeclared work.

An URSSAF inspection happens in 4 steps. 

Firstly, any Auto-entrepreneur subject to an URSSAF inspection will receive notice of the fact (un avis de contrôle) at the company’s registered address. This will be sent a minimum of 15 days before the inspection date.

In some circumstances, however, URSSAF will not send an inspection notice. Usually this is in cases where there is a suspicion of undeclared work.

The inspection notice will include a list of documents to be shared with URSSAF.

As a general rule, you’ll be asked to send:

• a proof of company registration document (in France this is the extrait K, which is the micro-enterprise equivalent of the Kbis). These can be obtained fairly easily through the Monidenum platform; 
• income statements and purchasing ledgers covering the past three years;
• all invoices and cost estimates covering the past three years;
• your three most recent tax statements (avis d’imposition);
• the bank details (relevés de compte bancaire) for your business account(s).

In most cases the inspection will focus on examining the last three years of activity. So for an inspection in 2023, you’d be asked to provide information relevant to 2020, 2021 and 2022. That makes it very important for you to safely stock receipts and proofs of payment. We’ll look later in the article at ways of staying organized and limiting the risk of lost or misplaced documents.

If you are missing some documents, it’s best to be transparent and tell the URSSAF inspector directly and swiftly. You should never try to give false data or hide discrepancies in any way; doing so potentially constitutes the crime of obstructing an inspection, which carries a significant financial penalty.

Don’t hesitate to reach out to your accountant for help in preparing all the documents required.

Auto-entrepreneurs are, by and large, examined off-site and by document, meaning the inspector will not physically turn up at your place of work.

The maximum duration of an inspection is 3 months.

Once the process is over, you’ll receive an inspection report (une lettre d’observations) containing the inspector’s findings.

There are 3 scenarios:

• The inspector concludes that everything is in order. You’ve declared and paid correctly.
• The inspector finds that you’ve paid too much in social charges. In this case, URSSAF will arrange with you a reimbursement of your excess payments.
• The inspector finds inconsistencies in your declaration. The inspection report will detail the nature of the discrepancy, the amount of social charges owed and the penalty, if any.

If you don’t agree with the conclusions drawn by the URSSAF inspector, you have every right to challenge the decisions made. You have 30 days after the date you received the report to contest the findings, a period of time known in France as la période contradictoire.

The inspector then has 60 days to respond to your challenge and declare whether or not their original decisions are to be upheld. That decision will then be passed on to URSSAF, which will issue a final inspection report (un rapport final de contrôle).

If you wish to contest this final report, you have 2 months to make a request for an amicable agreement. This request can be made at the Commission de Recours à l’Amiable (CRA) and is free of charge. 

If the CRA doesn’t give you the answer you wanted, there is still one channel of appeal left open: you will need to contact the pôle social du tribunal judiciaire within 2 months of the CRA’s verdict. 

Are you up-to-date with your declarations? Have you kept all of your invoices? Do all your documents comply with legal requirements? These are the main questions you should be asking yourself if you’re faced with an inspection.

The administrative demands of the French state can be overwhelming to the non-initiated. But here are some organizational tips that should help take some stress out of the process and keep URSSAF happy.

Declaring turnover is one of the primary responsibilities of an Auto-entrepreneur, as it’s this that URSSAF uses to calculate your social charges. You therefore need to be thorough when posting your declaration.

• Respect the deadlines imposed by URSSAF. You should make your declaration every month or every quarter, according to the option you chose when registering. URSSAF will usually email you a reminder but it’s always a good idea to set up automatic reminders a few days before the declaration period opens and/or closes.
• Always double check that your declaration is perfectly accurate to the nearest euro before you submit your declaration. You are allowed to modify it later within the declaration period if needed.

Happily, tax obligations are simplified for workers in the micro-enterprise regime. This means that you should only need to observe the following criteria:

• keep an up-to-date revenue ledger that centralizes all your incoming payments.
• keep an up-to-date purchase ledger that centralizes all your spending items.
• make sure your invoices and cost estimates comply with legal requirements. This means they must include the date and unique invoice number, your company information such as SIRET number, as well as your customer’s address.

You need to keep all of these documents in a safe place as URSSAF inspectors will demand to see them in case of an inspection.

It’s not always easy or practical to store all these documents, especially knowing that you need to keep each one for a period of 10 years. It’s a lot of paper, and potentially requires a lot of storage space.

To make things easier, Qonto allows you to automate your supporting documents. A Qonto account will automatically link your invoices to your incoming payments, for example. The digitized documents have the same probative (i.e. legal) value as their paper counterparts, you can be sure that they won’t get lost and will save you some office space. If and when URSSAF want access to them, they’re ready in a few clicks.

All entrepreneurs must open an account dedicated to their business activity if their annual turnover exceeds €10,000 for two consecutive years.

Company creators are advised to open a business account whatever their situation to draw a line between their professional and personal finances. A separate business account will greatly simplify the job of an URSSAF inspector, as well as your own task of providing purely business-related information.

Qonto offers an all-in-one business account that has your admin bases covered. Your incomings and outgoings are visible at a glance, and you can separate your spending into categories and export your transaction files in a few clicks or taps. We’ve designed our accounts to make life easier for you, the entrepreneur, as well as the URSSAF inspector.

And if the URSSAF inspector is happy, you’re free to keep driving your business forward.