Auto-entrepreneur: The VAT threshold goes to € 25,000, what consequences?

For years, the micro-enterprise regime has been acclaimed for its simplicity. But the latest reforms upset this balance. As early as 2025, the VAT franchise threshold will be lowered to 25 000 €against 37 500 € currently for services. A modification which risks weighing heavily on self-employed entrepreneurs, in particular those whose customers are made up of individuals. Price increase, reduced margins, complex administrative procedures … What should we expect?
A lowered threshold, reinforced tax obligations
Until now, a self-employed person could charge his services VATless as long as he did not exceed € 37,500 in annual turnover. Now this threshold falls to 25 000 €. Once this limit is reached, VAT becomes compulsory as of the following month.
This change involves several immediate consequences :
- Obligation to charge VAT : auto-entrepreneurs will have to add 20 % at their prices for the majority of services.
- Declaration and repayment of VAT : heavier administrative management, with additional accounting obligations.
- Impact on prices and competitiveness : auto-entrepreneurs will have to choose between increase their prices or absorb VAT by reducing their margin.
🔎 Concrete example :
Lucas, independent consultant, invoice € 2,000 per month to its customers, either € 24,000 per year. With the new threshold, as soon as it exceeds 25 000 €he will have to charge VAT.
Two options are available to him:
- Pass VAT on the customer : its price goes to 2 400 € TTC (€ 2,000 HT + 20 % VAT). His client pays more.
- Absorb : he keeps a rate including tax of 2 000 €but his income HT falls to 1 666 €. So he wins -334 € per month.
In both cases, he loses competitiveness or profitability.
What self-employed people will be the most impacted?
This change does not touch everyone in the same way. Some profiles are more exposed than others:
- Auto-entrepreneurs working with individuals : These customers do not recover VAT, which directly adds their services.
- The self -employed close to the threshold : those who gain between 25 000 € et 37 500 € will have to integrate this new tax constraint earlier than expected.
- Service professions (coaching, graphics, advice, crafts, etc.) : Their activity is often based on a clientele not subject to VAT.
On the other hand, those who charge to companies subject to VAT will be less affectedbecause their customers will be able to recover this tax.
🔎 Example :
Sophie, interior decorator, invoice € 30,000 per year to individuals. Before 2025, she did not charge VAT. From now on, she must choose between:
- Invoice € 36,000 including tax (+20 %) and risk losing customers,
- Stay at € 30,000 including taxbut reduce your turnover excluding tax to 25 000 €either a net loss of 5 000 € per year.
How to adapt to this reform?
Faced with this new tax constraint, several strategies are available to auto-entrepreneurs:
- Anticipate your turnover : Monitor your income so as not to cross the threshold too quickly.
- Target a clientele subject to VAT : By favoring businesses, VAT becomes a neutral element for customers.
- Optimize your prices : offer offers with more added value to justify a price increase.
- Change legal status : A possible option for those whose activity goes far beyond the VAT threshold.
🔍 To know : for self-employed entrepreneurs with significant professional expenses, being subject to VAT can also be an advantagebecause they can recover VAT from their purchases (hardware, software, etc.).
A change that weakens the self-employed diet
With this lowering of the VAT threshold, micro-enterprise loses one of its major assets: simplicity. What was an attractive status to test an activity with few constraints becomes more complex.
So, should we still choose this diet in 2025? It depends on your activity and your customers. But one thing is certain: self-employed entrepreneurs must prepare To avoid a bad surprise when invoicing.
📢 And you, how do you plan to manage this change? Rather increase in prices or drop in margin? Share your opinion in the comments!