Hi there

I've read loads of posts, but still cannot figure out a simple thing.
Say, I am living in Spain and I am Spain resident now. I work for a UK company via Internet and I want all to be legal. How do I pay income tax and Social Security tax?

As far as I understand, income tax is not a problem. My employer will pay me gross and I will pay my tax in Spain every year when submit tax declaration.

Now, Social Security? The only solution I found is that my employer should open an account in Spain (lol what??) to tranfer Social Security payments there etc. I believe, this is not completely hassle free even if does not cost anything for him. And I do not see any reason why he has to do it and I am pretty sure he won't

Cannot he just send me my total salary including Social Security paid in UK, so that I could pay it in Spain myself (together with income tax and other taxes)? This seems to be the most logical option, doesn't it?

In other words, question is simple - how can I continue to legally pay my Social Security (I do not care, whether it is me technically from my total salary fund or employer does it as currently, whether this is done in UK or Spain etc.) and get medical insurance and other things in Spain?
I am not trying to break a law, I am really willing to make everything legal and transparent but without making my employer do any extra useful work for Spanish bureocracy.



And as an extra point. I have a prospect of being employed by the Spanish company (maybe will and maybe not), and if it happens I still want to retain my UK workplace as I will be able to work for both.
As Spanish employer will pay Social Security for me (here will be no issues), then should my UK one still pay anything for SS? I believe, not (already paid by Spanish one) and then my problem solved for this case?

Thanks anyone who can help me as tried myself and no luck

Right, I have some experience here as I have been in a similar situation.

Currently you have two options with your UK employer:

1. You register as self-employed in Spain and bill your employer monthly. You will be responsible for paying your own social security, taxes etc on a monthly/quarterly basis. This is probably the best option. You can sign a Spanish TRADE contract with your UK employer which states the terms of your employment. This is legally required if over 75% of your income will be from the one employer

2. The UK company registers on the Spanish social security register. This means they would be able to pay your salary and social security fees directly. However, you would need to pay for an asesoria to administrate this, I got quoted 300 euros per month for this which is off-putting for an employer if you are the only employee based in Spain

If you become employed on a fixed employment contract with a Spanish employer then the only way you would be able to keep working for your UK employer would be by paying two lots of social security (one through the Spanish employer plus method 1 or 2 above), there is no way of saving here I'm afraid (that I know of)

However, if you were self-employed then you could work for both employers although you would of course cover your own social security costs, so it is important that you negotiate that with your employers.

Best of luck! Whatever the case, if your knowledge of Spanish law (and language) is fuzzy then you are best to talk to an employment lawyer. They can tell you what to do and get you set up with just 1-3 hours of billable time, so maybe 150-300 euros

As Concierge for the Spanish section of BE I would like to say hello and welcome.

BE is a very large expat website, so if you have problems finding your way around we have concierges who will try to direct you. The moderators for the Spanish forums are Mitzyboy and Fred James, moderators are there to ensure that the site runs smoothly within the rules of BE. Problems and complaints should always be addressed to a moderador who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are friendly and helpful with a wealth of knowledge of the issues of living in Spain. At the top of the page you will find a quirkily named thread called Free Beer which is full of important and useful information. Hope you enjoy your time participating in the forums.

Please let me know if you need any further help.

Rosemary

Thanks a lot, cricketman. Sad story...

Am I right that this is ridiculous situation? I want to pay taxes to the Spanish economy and they do not want it by placing some weird rules So, my employer should pay 300 EUR a month just because I want to pay all taxes correctly. I am amazed, really.

I have never tried self-employement. Is it hard? Should I just bill my employer every month on a full salary (net + gross + SS), like "Blabla work done. Amount: xxx pounds"?

Actually, paying fixed SS (it was 250 EUR or something?) I can even save some money then, as my SS payments are bigger than that Won't it be considred as a fraud by Spanish authorities? Business with the same "customer" and same fixed amounts paid.

If anyone can still confirm that I have to pay 2 lots of SS in case I work for Spanish emloyer and also self-employed. This makes no sense, as why the hell I have to pay twice for my medical insurance? Do they think that 2 workplaces double the chances of medical assistance? Well, maybe

Also, does my SS medical insurance cover my unemployed wife and kids or not?

They are not weird rules, Spain is a different country to the UK with different accounting and employment legislation. If your company are in effect opening a Spanish branch of the business by employing you in Spain then you need to administrate that. You don't need to pay an asesoria 300 euros per month if your employer can handle the administration internally. However, given that they are unlikely to have Spanish lawyers on their staff, then this is unlikely

For being self-employed, if you know absolutely nothing about it then you should pay a gestor to do it for you, at least for the first year, as it is a commitment. You need to report and pay taxes quarterly, and pay social security monthly. A gestor will probably be 50-70 euros per month. I do this myself as my wife is also self-employed and knows the system well.

A few years ago my wife was working full-time and also running her business outside of working hours, the only way she could see of doing this was by paying the autonomo payment of 250 euros social security per month, as well as the full time employer paying the social security payment. So in total she was paying around 600 euros social security per month

The minium social security payment for an autonomo is currently around 260 euros per month. This gets you medical cover for your whole family and contibutes to a small pension of around 700-800 euros per month when you retire. As self-employed you can choose to pay more, up to around 700 euros per month, this will give you a much larger pension of around 2,500 euros per month

Working in Spain for a UK employer and not putting the procedures in place that we have discussed is fraud. Unfortunately it is not as easy as simply taking your online work to Spain, you have to meet your legal obligations as well

cricketman, what I mean by the "weird" system is that I can pay my income tax here and can pay SS if self-employed, but cannot pay SS myself if normal employment. This is weird and allowing this could make things much easier.

So, scheme of getting salary via self-employment is perfectly legal? Ok, thanks.

If I pay SS via my Spanish employer and via self-employment 260 EUR, will my pension be bigger, when I retire?

And regarding obligations - ok, I agree to pay double SS if there is any logical explanation. I guess, in UK it is same as well, just did not check this question.

I just want it to be hassle free without bothering UK employer and dealing with all this self-employment bureocracy. In other words, "shut up and take my money!" -

.

But seems like Spain does not really want money of honest people like me and you and force us into some questionable schemes.

A lot of UK companies don't like using self-employed staff. The reason is that you will still be "deemed" an employee by HMRC (look up their IR35 rules) and therefore if you skip paying your taxes & NI, the company would be held liable. They may also dislike the idea because
a) it sets a precedent for other employees, who will feel you're being paid more or treated better - even if you aren't. ("look at him: he works from home AND in sunny spain grrrr ....")
b) contract workers are often paid from a different budget (capital, rather than revenue) than staff - changing you from one to the other can be a pain.

You'd also need to look out for what happens to your pension payments, whether you'd lose your "employee" status & could therefore be sacked without redundancy pay and how often and who pays for you to return to the UK on company business.

Sorry Alicante17, I fail to see your problem

These are not "questionable schemes", they are what is legally required to work legally in Spain

If you worked for a Spanish employer in the UK then you would need to abide by UK rules, not Spanish rules.

It is the same the other way round. Most people who are employed in any country are protected from the administration/legal obligations because their companies do it for them. However, in this case, you will probably need to do it yourself because you have chosen to live in a different country to your employer.

I have not been forced to do anything, I take the view that I am very lucky to be able to work for a UK employer/client from anywhere I want in the world, but with freedom comes responsibility!

pete_l , thanks. Yes, i will have to check with the employer if they are ok with making me "contractual". The relocation "moral" question itself has already been discussed and approved.

cricketman , I just mean that if I could pay SS from my UK employer myself, then it would not require neither me establishing "self-employement", nor my employer to create a presence in Spain.

I would just pay both SS and income taxes myself each year or month or whenever the like. Isn't it simplier, than current options?

I understand that I am protected as my employer pays SS for me and I do not have to do anything else, just receive net money on my bank account, but what if I want to do it myself?

Funny thing is that I can pay my income tax myself from some overseas income - this is allowed (isn't it?), but cannot pay SS tax for the same income.

Regarding "fraud schemes" as pete_l mentioned above, even self-employement solution can be questionable:

But Pete_l is mentioning UK law

Nothing to do with Spain, I am telling you want you need to do to be legal in Spain, that is a completely different matter.

I'm afraid it doesnt matter what you "want to do", the law is what it is. I have spent a lot of time looking into this and spent money talking to Spanish lawyers. To be fair, my employer/client also has employees in Belgium and France and says that the Spanish system is quite reasonable and cost efficient in comparison. The problem of course is making sure you understand your obligations.

Also be aware that you do not want to be a pain in the ass to your employer, otherwise they may reconsider, so you should take a legal option that works best for them, otherwise you could be left in Spain with no work.

The TRADE contract that you can draw up as an autonomo in Spain is very good as you can agree with your employer on all the conditions you want to put in there. Therefore if you both want exactly the same t&cs as the contract you had in the UK, then you can put them in the TRADE contract. It is very flexible and an excellent solution when Spanish fixed contracts don't offer the same flexibility.

Common problem with taxes is that people do not want to pay them. I want, but the system is too complicated.

You said,

Sure, but as a result I need the whole process to be legal for all parties. You mentioned:

What's the point to have all perfectly legal in Spain but cause problems to UK employer (as pete_l mentioned)? As a result, I will be fired or something

Is someone here using such self-employment scheme with a fixed monthly invoices and UK employer? Just to check whether this has any issues in UK..

Yes, I am! There are no problems UK side as far as I know, but then they pay me as a contractor and not an employee. Which is what you should do to solve this problem.

You can't have your cake and eat it. You need to find a solution for both you and your employer that works for the UK and Spain.

Working across two legal systems in two countries is obviously complicated. It is the price you pay for the massive advantage of having a UK employer in Spain.

I was an employee of a Ltd company whilst living in Spain

I never registered as self employed ... because I wasn't, and none of my business was conducted in Spain or income received in Spain
I paid my taxes when applicable in the UK, and then made a tax return in Spain where the difference between the UK and Spanish tax was paid.

€260 just to access the SS system is a little unnecessary. Private health care in Spain is far cheaper than that, working out as it was to around €1150 - €1200 a year for two in their mid fifties. there was clamp down some time ago on people registering as autonomo just to gain access to the s/s system, I dont know how successful it was

Sorry Mitzyboy, all the legal advice I have been given has been that what you describe is completely illegal.

As you were resident in Spain then you were personally carrying out work in Spain. In which case, you should have been registered with the Spanish social security system.

By the way, this is the firm of lawyers I used. Maybe you should ask them? They were very helpful

http://www.rhgr.com/fields_of_work-employment.php