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Living in Spain with a UK salary
Hello, I've been reading quite a few posts on this site and other places but I'd like some clarification on a few things please!
I have a full time contract with a UK company and work remotely. At the start of next year I will be a full time resident in Spain, and from what I've read I'll have to register as autónomo to be able to pay taxes in Spain. I already have my NIE and social security number as I was a resident in Spain in the past and have worked there with a Spanish payroll for Spanish companies. I am fluent in Spanish. My first question is regarding personal allowance. Intuition tells me that I will get the terrible Spanish allowance of around €5500/year as I'd have to declare all my income to Hacienda, but the gov.uk site 'gov.uk/tax-uk-income-live-abroad/personal-allowance' (Sorry can't post urls yet, add the www) seems to suggest that I should get to keep the 12000 GBP allowance as I hold a UK passport. Does the double taxation agreement between Spain and UK allow me to keep the UK personal allowance? My second question is regarding how much is taxed in Spain as an autónomo. I am under the impression that; If I were to transfer my UK wage from my UK account to my Spanish account each month, I would be taxed 21% IVA, 19% - 30% IRPF (up to 35,200€), plus, 312€ for seguridad social (I know that the first year seguridad social is less and then it rises, but I want figures for after the 'promotional' period). This results in almost half my wage going to taxes. Is this correct or I am I missing something here? That seems like a LOT of taxes. Third question. Other options appear to be to get the company to either; 'Send' me to Spain to work, or open up a Spanish branch and pay me directly via the Spanish system. What would either of these options entail for the company? How costly would each one be for the company? I realistically can't make or ask them to do either, but if it works out cheaper to let them have €300 of my salary a month to mantain a branch here, it appears that it would save me a LOT of money... Another question. I can't remember the username now but a while ago I was searching these forums and there was a member that paid taxes in Spain WITHOUT registering as autónomo, and apparently legally according to his lawyer. Is there ANY way I can do this? I found a excerpt from a site that suggests that there is/was a way. The UK and Spain have a double taxation agreement which allows for ex-pats who are now resident in Spain to have their UK income paid free of UK tax. It used to be possible to get a form FD9 from UK HMRC which set out your UK income that you wanted to be paid free of UK tax and this was submitted to the Spanish tax office who returned it to UK HMRC. Thanks Rob. |
Re: Living in Spain with a UK salary
Originally Posted by Hellmet
(Post 12548328)
Hello, I've been reading quite a few posts on this site and other places but I'd like some clarification on a few things please!
I have a full time contract with a UK company and work remotely. At the start of next year I will be a full time resident in Spain, and from what I've read I'll have to register as autónomo to be able to pay taxes in Spain. I already have my NIE and social security number as I was a resident in Spain in the past and have worked there with a Spanish payroll for Spanish companies. I am fluent in Spanish. My first question is regarding personal allowance. Intuition tells me that I will get the terrible Spanish allowance of around €5500/year as I'd have to declare all my income to Hacienda, but the gov.uk site 'gov.uk/tax-uk-income-live-abroad/personal-allowance' (Sorry can't post urls yet, add the www) seems to suggest that I should get to keep the 12000 GBP allowance as I hold a UK passport. Does the double taxation agreement between Spain and UK allow me to keep the UK personal allowance? My second question is regarding how much is taxed in Spain as an autónomo. I am under the impression that; If I were to transfer my UK wage from my UK account to my Spanish account each month, I would be taxed 21% IVA, 19% - 30% IRPF (up to 35,200€), plus, 312€ for seguridad social (I know that the first year seguridad social is less and then it rises, but I want figures for after the 'promotional' period). This results in almost half my wage going to taxes. Is this correct or I am I missing something here? That seems like a LOT of taxes. Third question. Other options appear to be to get the company to either; 'Send' me to Spain to work, or open up a Spanish branch and pay me directly via the Spanish system. What would either of these options entail for the company? How costly would each one be for the company? I realistically can't make or ask them to do either, but if it works out cheaper to let them have €300 of my salary a month to mantain a branch here, it appears that it would save me a LOT of money... Another question. I can't remember the username now but a while ago I was searching these forums and there was a member that paid taxes in Spain WITHOUT registering as autónomo, and apparently legally according to his lawyer. Is there ANY way I can do this? I found a excerpt from a site that suggests that there is/was a way. I'm sure I have other questions but I can't remember right now and these are the main ones. MANY thanks in advance to anyone that can guide me on this. I really don't want to leave Spain for good but I can't have half my wage going to taxes. Thanks Rob. All explained really, but I would see no benefit for a company setting up an office in Spain, unless you are dealing with Spain directly. Even with lower salaries, they wouldn't have any benefits. |
Re: Living in Spain with a UK salary
To "set up/register" for autonomo costs 120€
Autonomo is 260€ per month. This is paid every month, from your bank account. Your taxes are calculated by the gestoria every 3 months (quarterly) and you pay it to the gestoria. The IVA for anything that you buy for the "home office" can be deducted, as well as clothes / shoes etc if you have to have business meetings. You give all reciepts to the gestoria. You have to pay the 260€ wether you make money or not. You get 6 months at half price as an incentive. Tax is related to your earnings, but i dont remember the percentage. I used to work online from home for wink bingo, based in the UK / Gibralter. |
Re: Living in Spain with a UK salary
That is about to change. If you earn less than the minimum wage, the cost will be €50. High earners will pay more.
Changes to Autónomo Payments | Costa Tropical Gazette News At the moment a startup will pay €50 for 12 months - it used to be 6 months. https://www.citizensadvice.org.es/wp...SUMMARY-10.pdf |
Re: Living in Spain with a UK salary
well thats a change for the better Fred, thankyou for the information. Having worked for a company at malaga airport for 7 years now, I´m a little out of touch it seems :)
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Re: Living in Spain with a UK salary
Originally Posted by bfg69bug
(Post 12548683)
well thats a change for the better Fred, thankyou for the information. Having worked for a company at malaga airport for 7 years now, I´m a little out of touch it seems :)
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Re: Living in Spain with a UK salary
Ok, thanks for the replies. I am still not 100% sure on any of my questions though.
Regarding taxes for being autonomo, after the incentive period I would pay full price as I would always earn more than the Spanish minimum wage due to my UK contract. I have had a look at this site (sueldonetoautonomo.es) and it seems pretty absurd to me. EG. If I was to earn 2000€ a month, 420.00 € would go to IVA, 420.00 € to IRPF and 275.02 € on seguridad social. This would leave me with 884.98 €/month for myself. Is this correct? This is ridiculous. Regarding personal allowance, would I be able to keep the UK personal allowance of 12000GBP as suggested by the gov.uk link in the OP, or would I have the Spanish personal allowance of €5500? Does the double taxation agreement between Spain and UK allow me to keep the UK personal allowance? @snikpoh - I'm not sure what the green card is, I worked in Spain with my NIE and SS for about 7 years with no problem. Originally the NIE was a sheet of A4 but now it's changed to a credit card sized piece of laminated paper. Thanks, Rob |
Re: Living in Spain with a UK salary
Hi Rob, I’m moving to Spain in the next few months and continuing to work for my English company working remotely so following this thread with interest. Will your company continue to pay your salary into your British bank account? cheers |
Re: Living in Spain with a UK salary
If you have a salary fromthe company that you work for, why would you want to go autonomo? Surely there is no need.
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Re: Living in Spain with a UK salary
Hi Rob, I’m moving to Spain in the next few months and continuing to work for my English company working remotely so following this thread with interest. Will your company continue to pay your salary into your British bank account? cheers At the moment yes, the company will still pay me into my UK account and I'll transfer it over into my Spanish account. If you have a salary fromthe company that you work for, why would you want to go autonomo? Surely there is no need. |
Re: Living in Spain with a UK salary
You may find some useful info in this old thread. https://britishexpats.com/forum/spai...advice-835716/ Being an expat pensioner I have little experience of your situation, but if you are paid a salary I cannot see why you would need to be autónomo and I cannot see why IVA would be involved. The quote you posted does not apply to you. The HMRC FD9 procedure only applies to pension income and royalties. There is a rule that any income arising in the UK is taxed in the UK irrespective of residency, but it seems to me that the income does not arise from work done in the UK. If so you would just pay the tax in Spain. If you ended up being taxed due to UK PAYE then it can always be offset against tax paid in Spain. UK allowances are retained but only against any income arising in the UK such as rental income. You certainly cannot add it to your Spanish allowances. Incidentally, as an employee rather than autónomo you get another €2000 on top of the basic personal allowance. Regarding Spanish income tax you may find this useful. http://www.andalucia.com/forums/view...p?f=42&t=27576 it might be wise to take some professional advice on this issue, maybe your UK employer can help with this. There may be ways you can pay NI in the UK which might help with your healthcare in Spain, but I don’t know the details of what the options are. Sorry I can’t be more precise on all this but I hope it helps you to find the best option. |
Re: Living in Spain with a UK salary
My nephew was working for DEL in Glasgow and was offered a post in Madrid. Over there he paid tax as an employee. Then DEL sold the Spanish wing. He was made redundant and the local social security (dole) lawyer got on to DEL and got him redundancy. He now works for another company in Madrid as a direct employee. He said that there was no need to be autonomo.
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Re: Living in Spain with a UK salary
Right, I've been talking to a couple of gestores/asesores to get an idea of what is possible and what is not.
The general consensus is that I have 2 options; 1. Register as autónomo, pay social security monthly and IRPF tri-monthly as discussed on the forums. 2. Live in Spain without changing anything, and carry on paying into the UK system. APPARENTLY this is not illegal. I would have to declare all my properties etc to the state (Spain). APPARENTLY healthcare is free to anyone in Spain now due to the new government, but I would obviously not be entitled to any kind of pension as I wouldn't be paying into it. Option 2 is obviously much cheaper than option 1 as Spain taxes quite heavily for autónomos. |
Re: Living in Spain with a UK salary
Option 2 is categorically wrong. You will have to pay the tax on your uk income in Spain and claim the UK tax against it. |
Re: Living in Spain with a UK salary
Originally Posted by Hellmet
(Post 12557017)
Right, I've been talking to a couple of gestores/asesores to get an idea of what is possible and what is not.
The general consensus is that I have 2 options; 1. Register as autónomo, pay social security monthly and IRPF tri-monthly as discussed on the forums. 2. Live in Spain without changing anything, and carry on paying into the UK system. APPARENTLY this is not illegal. I would have to declare all my properties etc to the state (Spain). APPARENTLY healthcare is free to anyone in Spain now due to the new government, but I would obviously not be entitled to any kind of pension as I wouldn't be paying into it. Option 2 is obviously much cheaper than option 1 as Spain taxes quite heavily for autónomos. |
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