RunBoyRun

My partner and I live in London now but are considering moving to Portugal for a 6-month period (i.e. less than the income tax 183d threshhold), while continuing to work for UK companies, to take advantage of "working from home", just doing that abroad.

While I think I understand the income tax implications and limitations here, I'm not at all sure about the implications on the Social Security side (i.e. National Insurance in the UK), or other aspects we need to consider.
We basically would like to keep it all as simple as possible and keep all arrangements as if we were still living in the UK, even if that meant having to take out 6-month "long stay" travel insurance policy to cover health costs in Portugal.

Does anyone have any tips on how to arrange the Social Security arrangements, or other things we need to consider?

Thanks,
Andrew

christmasoompa

Hi, welcome to BE.

You can keep paying NI contributions from abroad, so that's no problem. You've not mentioned a visa?

Loafing Along

The issue you really need to address is staying longer than 90 days which the maximum a Non-EU citizen can do in the Schengen Area without special arrangements / different type of Visa and so on

yevlondon

to be honest i would not bother if it is just under 6 months. Portugal will not know you are working from home. keep paying taxes in UK. but up to you of course. that is what i would do. if it were for a longer period of time, just to be on the safe side I would probably notify the Financas my address in Portugal and apply for Non Habitual Residency tax regime. then you are covered and do not need to pay taxes on a foreign earned income (but need to fiel a tax return).

your biggest problem would be staying in Portugal more than 90 days legally i would think, unless you have an EU Passport.

sam349

I agree with the other comments - your main issue is staying over there for more than 90 days (but perhaps you've already got residency pre-Brexit or an EU Passport?). If you're just doing it for 3 months or a month here and there, I would probably just do it, and keep quiet!

If you were to go down the "we are definitely and officially moving to Portugal" ... then, in terms of tax / NI - and I might be completely wrong on this but this is what I understand from when i looked at this before:

• Income tax: apply for the NHR in Portugal, which (depending on your job) will mean you only pay 20% tax on your UK salary. Instead of the usual 40% or 45% tax in the UK.
  
• NI / Social Security: you’re meant to pay local social security i.e. if you move to Portugal, you’re meant to pay Portuguese social security (13% from memory). BUT, there is an exception which means that if it’s only a ’temporary’ posting (i.e. you think you're only going to be working remotely for up to 2 years), you can continue to only pay UK social security taxes (National Insurance) instead of Portuguese social security. Portuguese social security is ~13%, but it really is 13% of your salary whereas in the UK, it’s considered to be “ around 10%” but as it’s capped, it often works out to be more like 2% of your salary in the end.

sam349

Oh - and here's the link to the "you can pay UK NI instead of local social security for up to 2 years" blurb on the UK Government site (highlighted): National Insurance if you go abroad - GOV.UK

yevlondon

hey sam349. i think NHR means NO portuguese tax on UK income (salary for sure). 20% on Portuguese income (if on the list of relevant jobs)

RunBoyRun

Thank you all, great tips.

So, my wife has an Italian passport - I'll need to find out if that allows me to tag along with her for more than 90 days.

Re keeping things quiet it if's less than 6 months - the issue here is not so much the Portuguese side, I guess, but my wife's UK employer. They would certainly need to know. We would be happy to go back to the UK once a month say, so she can put her face into the office (we think they'll be ok with that - yet to be negotiated though).

sam349

Hi yevlondon - i don't think that's quite right.

It's 0% for things like pensions, or if you earn money via your own company (and take dividends instead of a salary to minimise tax), or money you may earn from royalties (e..g if you're a song writer), but not for regular salaries.

For a normal salary, under NHR, you can either continue to be taxed in UK under the normal UK tax rules OR you opt to pay 20% income tax to Portugal under NHR (instead of the normal 48% in Portugal) - provided you're employed in one of the approved NHR professions (basically, medical, techies, teachers, or 'management'). I've got a booklet on it if it helps, i can DM you.

One other thing to mention - some UK employers will get a little nervous about you working from Portugal (or anywhere aboard), because technically they have to comply with local health and safety, insurance etc. Some employers won't care less (or even think about that), but I just wanted to mention that so you're aware. Bluntly if it's just for a short amount of time (like months) or you're going to try it out to see how it goes, it's probably easier to say nothing and pop back to the UK every couple of months... then if you take the plunge and want to formalise it, then raise with your employer (and sort out everything else!).

yevlondon

hi sam
i disagree. but its not my battle. i ll leave it for people to research this topic. i researched it quite well and am ok with what i know.
i mean yes obviously 0% only if u keep paying uk tax. thats what i meant

suiko

I've been doing this here for the last six months. My employer doesn't know abot it because I think they would just say no because of their perception of the aforementioned social security commitments.

I have applied for NHR but have not been accepted because I didn't inform Financas I was leaving when I left Portugal almost 30 years ago. Given that I intend to continue to pay UK tax on my salary because of the above, I have no idea what I'm going to be paying in Portugal. I did have an appointment with an adviser here, but have to say I don't really understand any more now than I did before.

Anyways, going back to the OP's situation... I don't think being with an EU citizen has any vailidity unless you are married? And surely the OP's idea of his wife going back to the UK every month is not very realistic with current testing and quarantine requirements?

RunBoyRun

Ha, good point suiko, about the possible issues returning to the UK every 4-6 weeks. We have both been vaccinated, but of course we don't know what the travel rules will be toward the end of the year (October was our earliest month for possibly heading out to Portugal, but we are completely flexible. The suggestion of returning was a 'sweetener' for her company, may not be neccessary, for a shortish period of 6 months max.

Yes, we are married (my wife has an Italian passport).

suiko

OK, sounds like you're sorted, then

Wish I was in your position. Need to get back to the UK but can't do anything as obviously I haven't been vaccinated!

coleio

If your other half had an EU passport then she has the right to live and/or work here. She also has the right to a "family life" - which is you - so you are allowed to live here, so you'll both be able to live here without the 90 day rule. However a good way would be to give yourselves say 6 months and spent time here and in the UK getting to know this place - looking for some where to live/ getting NIF (tax code)/ bank account/ social security info/tax advice/ lawyer/ etc before committing your selves to something. You'll possibly be surprised by the speed (lack of) with which administration stuff goes here and the randomness of advice from official offices and the usefulness of being here in person to get things done. The Covid rules change and this is probably the biggest unknown at the moment.

toots sweet

Just double check that 90 day rule for a non EU spouse. I am non EU, but OH is. When I went to our local Camara they said if I wanted to stay over 90 days then applying for residency was the way to go.