Running a UK business from Spain
Aug 9th 2010, 4:36 pm
#16
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Re: Running a UK business from Spain
nice plug neil 
In a 5 min call skipping over the topline details my accountants have told me that if I spend under 6 months in a spanish tax year (june to june) i think then theres no need to register as resident.
However if its likely to extend pass that point then registering sooner for residence and getting a NIE for healthcare, cars, mortgages etc is advisable.
.
In a 5 min call skipping over the topline details my accountants have told me that if I spend under 6 months in a spanish tax year (june to june) i think then theres no need to register as resident.
However if its likely to extend pass that point then registering sooner for residence and getting a NIE for healthcare, cars, mortgages etc is advisable.
.
Was he confusing tax residency with residence?
Aug 9th 2010, 4:40 pm
#17
Joined: Jun 2006
Location: Granada Costa
Posts: 10,902
Re: Running a UK business from Spain
If he thinks the Spanish tax year is June to June it's time to find a new accountant!
Aug 9th 2010, 4:41 pm
#18
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Re: Running a UK business from Spain
lol i'm getting proper details then you can pull it to shreds 
Aug 9th 2010, 5:02 pm
#21
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Re: Running a UK business from Spain
Whilst I wait for my accountants full email... which he will hopefully then have correct facts unless I have misheard him lol
See this: www.hmrc.gov.uk/helpsheets/hs302.pdf
That covers the definition of a "Dual Resident" under the current Double Tax Agreements the UK has with other EU countries.
In particular the clauses which apply to people like myself in this example are covered under the Tie-breaker rules known as "Centre of Vital Interests"
Eurrgghhh it could get complicated...
That document doesnt cover whether or not under the DTA rules I'd have to pay the spanish Equivalent of National Insurance to get free comprehensive healthcare etc...
See this: www.hmrc.gov.uk/helpsheets/hs302.pdf
That covers the definition of a "Dual Resident" under the current Double Tax Agreements the UK has with other EU countries.
In particular the clauses which apply to people like myself in this example are covered under the Tie-breaker rules known as "Centre of Vital Interests"
Eurrgghhh it could get complicated...
That document doesnt cover whether or not under the DTA rules I'd have to pay the spanish Equivalent of National Insurance to get free comprehensive healthcare etc...
Aug 9th 2010, 5:05 pm
#22
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Joined: Jan 2006
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Re: Running a UK business from Spain
I'm aware of the dual taxation agreements, which ensure you don't pay tax twice, but thats subject of course to where you are legally required to pay your tax
I have a small UK business also
I have a small UK business also
Aug 9th 2010, 6:33 pm
#24
Joined: Jun 2006
Location: Granada Costa
Posts: 10,902
Re: Running a UK business from Spain
If you want some interesting bedtime reading on the subject just Google "Gains-Cooper"
Aug 9th 2010, 9:03 pm
#25
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Re: Running a UK business from Spain
Ahh yes.. read that a while back.... quite sobering lol
Aug 10th 2010, 12:21 pm
#26
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Re: Running a UK business from Spain
email:
"I write further to our telephone conversation yesterday and confirm below the position as regards your intention to work in Spain for a short duration.
You indicated that in all probability, this period is likely to be less than 6 months and possibly may exceed that period.
You also confirmed that you will continue to have your economic, social and personal interests in the UK in that you will continue to maintain your home and business in that jurisdiction. As such, under the Double Tax Treaty between the United Kingdom and Spain, you will be regarded as resident in the UK on the basis that you will have your permanent home available to you in the UK and also your centre of vital interest will be in the UK.
As such, you will continue to file your returns in the UK, but if you have any Spanish source income, then you may well require to be registered in Spain but once again on account of the Double Tax Treaty, you will get relief for any tax that you pay in Spain on your Spanish source income against UK tax on that income.Thus you will not be taxed twice on the same source of income.
So far as National Insurance Contributions are concerned, if your period for working abroad is expected to be less than 24 months, then you can apply for contributions to continue to be paid in the UK rather than Spain. To do this you will need to apply to HMRC for a certificate A1 using the form CA3821 which you can obtain by downloading this. This will cover you for healthcare etc. As regards your girlfriend , yes she will also be covered provided she continues to pay NIC through her employment income from your business and she also applies for the A1 certificate.
I will revert to you on the subject of Spanish NIE.
I hope this gives you the information you required at this stage but no doubt when the time comes for you to take this step, we can discuss the practicalities. "
In a follow up conversation after this email we discussed the issues surrounding living in spain on a more permenant basis if we really love it.
Essentially once I've spent close to two tax years living in spain (6 months+ each tax year) it becomes harder to claim centre of vital interests is the UK as I'll have made our home in spain... that then creates issues around the fulltime control of my company being located in spain rather than the UK which opens up a whole new can of worms with potentially having to open a Sarl to control the UK Ltd...
Also after 24 months I'll have to start paying into the Spanish system to keep any health benefits..
So there we have it. Easy as pie for 6 - 12 months. Pushing it up to 24 months... 24+ months and its Paperwork city...
"I write further to our telephone conversation yesterday and confirm below the position as regards your intention to work in Spain for a short duration.
You indicated that in all probability, this period is likely to be less than 6 months and possibly may exceed that period.
You also confirmed that you will continue to have your economic, social and personal interests in the UK in that you will continue to maintain your home and business in that jurisdiction. As such, under the Double Tax Treaty between the United Kingdom and Spain, you will be regarded as resident in the UK on the basis that you will have your permanent home available to you in the UK and also your centre of vital interest will be in the UK.
As such, you will continue to file your returns in the UK, but if you have any Spanish source income, then you may well require to be registered in Spain but once again on account of the Double Tax Treaty, you will get relief for any tax that you pay in Spain on your Spanish source income against UK tax on that income.Thus you will not be taxed twice on the same source of income.
So far as National Insurance Contributions are concerned, if your period for working abroad is expected to be less than 24 months, then you can apply for contributions to continue to be paid in the UK rather than Spain. To do this you will need to apply to HMRC for a certificate A1 using the form CA3821 which you can obtain by downloading this. This will cover you for healthcare etc. As regards your girlfriend , yes she will also be covered provided she continues to pay NIC through her employment income from your business and she also applies for the A1 certificate.
I will revert to you on the subject of Spanish NIE.
I hope this gives you the information you required at this stage but no doubt when the time comes for you to take this step, we can discuss the practicalities. "
In a follow up conversation after this email we discussed the issues surrounding living in spain on a more permenant basis if we really love it.
Essentially once I've spent close to two tax years living in spain (6 months+ each tax year) it becomes harder to claim centre of vital interests is the UK as I'll have made our home in spain... that then creates issues around the fulltime control of my company being located in spain rather than the UK which opens up a whole new can of worms with potentially having to open a Sarl to control the UK Ltd...
Also after 24 months I'll have to start paying into the Spanish system to keep any health benefits..
So there we have it. Easy as pie for 6 - 12 months. Pushing it up to 24 months... 24+ months and its Paperwork city...
Aug 10th 2010, 12:35 pm
#27
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Joined: Mar 2009
Location: Valencia
Posts: 1,164
Re: Running a UK business from Spain
email:
"I write further to our telephone conversation yesterday and confirm below the position as regards your intention to work in Spain for a short duration.
Essentially once I've spent close to two tax years living in spain (6 months+ each tax year) it becomes harder to claim centre of vital interests is the UK as I'll have made our home in spain... that then creates issues around the fulltime control of my company being located in spain rather than the UK which opens up a whole new can of worms with potentially having to open a Sarl to control the UK Ltd...
Also after 24 months I'll have to start paying into the Spanish system to keep any health benefits..
So there we have it. Easy as pie for 6 - 12 months. Pushing it up to 24 months... 24+ months and its Paperwork city...
"I write further to our telephone conversation yesterday and confirm below the position as regards your intention to work in Spain for a short duration.
Essentially once I've spent close to two tax years living in spain (6 months+ each tax year) it becomes harder to claim centre of vital interests is the UK as I'll have made our home in spain... that then creates issues around the fulltime control of my company being located in spain rather than the UK which opens up a whole new can of worms with potentially having to open a Sarl to control the UK Ltd...
Also after 24 months I'll have to start paying into the Spanish system to keep any health benefits..
So there we have it. Easy as pie for 6 - 12 months. Pushing it up to 24 months... 24+ months and its Paperwork city...
Is this reply to someone who is self employed in business as cant see any reference to a UK Limited Company ?
Aug 10th 2010, 12:50 pm
#28
Senior Moment
Joined: Jan 2006
Location: On the edge
Posts: 20,460
Re: Running a UK business from Spain
email:
"I write further to our telephone conversation yesterday and confirm below the position as regards your intention to work in Spain for a short duration.
You indicated that in all probability, this period is likely to be less than 6 months and possibly may exceed that period.
You also confirmed that you will continue to have your economic, social and personal interests in the UK in that you will continue to maintain your home and business in that jurisdiction. As such, under the Double Tax Treaty between the United Kingdom and Spain, you will be regarded as resident in the UK on the basis that you will have your permanent home available to you in the UK and also your centre of vital interest will be in the UK.
As such, you will continue to file your returns in the UK, but if you have any Spanish source income, then you may well require to be registered in Spain but once again on account of the Double Tax Treaty, you will get relief for any tax that you pay in Spain on your Spanish source income against UK tax on that income.Thus you will not be taxed twice on the same source of income.
So far as National Insurance Contributions are concerned, if your period for working abroad is expected to be less than 24 months, then you can apply for contributions to continue to be paid in the UK rather than Spain. To do this you will need to apply to HMRC for a certificate A1 using the form CA3821 which you can obtain by downloading this. This will cover you for healthcare etc. As regards your girlfriend , yes she will also be covered provided she continues to pay NIC through her employment income from your business and she also applies for the A1 certificate.
I will revert to you on the subject of Spanish NIE.
I hope this gives you the information you required at this stage but no doubt when the time comes for you to take this step, we can discuss the practicalities. "
In a follow up conversation after this email we discussed the issues surrounding living in spain on a more permenant basis if we really love it.
Essentially once I've spent close to two tax years living in spain (6 months+ each tax year) it becomes harder to claim centre of vital interests is the UK as I'll have made our home in spain... that then creates issues around the fulltime control of my company being located in spain rather than the UK which opens up a whole new can of worms with potentially having to open a Sarl to control the UK Ltd...
Also after 24 months I'll have to start paying into the Spanish system to keep any health benefits..
So there we have it. Easy as pie for 6 - 12 months. Pushing it up to 24 months... 24+ months and its Paperwork city...
"I write further to our telephone conversation yesterday and confirm below the position as regards your intention to work in Spain for a short duration.
You indicated that in all probability, this period is likely to be less than 6 months and possibly may exceed that period.
You also confirmed that you will continue to have your economic, social and personal interests in the UK in that you will continue to maintain your home and business in that jurisdiction. As such, under the Double Tax Treaty between the United Kingdom and Spain, you will be regarded as resident in the UK on the basis that you will have your permanent home available to you in the UK and also your centre of vital interest will be in the UK.
As such, you will continue to file your returns in the UK, but if you have any Spanish source income, then you may well require to be registered in Spain but once again on account of the Double Tax Treaty, you will get relief for any tax that you pay in Spain on your Spanish source income against UK tax on that income.Thus you will not be taxed twice on the same source of income.
So far as National Insurance Contributions are concerned, if your period for working abroad is expected to be less than 24 months, then you can apply for contributions to continue to be paid in the UK rather than Spain. To do this you will need to apply to HMRC for a certificate A1 using the form CA3821 which you can obtain by downloading this. This will cover you for healthcare etc. As regards your girlfriend , yes she will also be covered provided she continues to pay NIC through her employment income from your business and she also applies for the A1 certificate.
I will revert to you on the subject of Spanish NIE.
I hope this gives you the information you required at this stage but no doubt when the time comes for you to take this step, we can discuss the practicalities. "
In a follow up conversation after this email we discussed the issues surrounding living in spain on a more permenant basis if we really love it.
Essentially once I've spent close to two tax years living in spain (6 months+ each tax year) it becomes harder to claim centre of vital interests is the UK as I'll have made our home in spain... that then creates issues around the fulltime control of my company being located in spain rather than the UK which opens up a whole new can of worms with potentially having to open a Sarl to control the UK Ltd...
Also after 24 months I'll have to start paying into the Spanish system to keep any health benefits..
So there we have it. Easy as pie for 6 - 12 months. Pushing it up to 24 months... 24+ months and its Paperwork city...
All I can say is that having a house in the UK (as I do) doesnt detract from the fact that after 6 months you become a tax resident in Spain
After 3 months you have to take residency in Spain, or as its called now signing on the foreigners list.
Theres a difference between tax residency and the residency referred to in the foreigners list
Anyway ... if you're happy then thats all that matters
Aug 10th 2010, 1:08 pm
#29
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Joined: Jul 2003
Location: Benalmadena Pueblo,Spain
Posts: 20,156
Re: Running a UK business from Spain
Eeeeerm, sack your accountant. 
Aug 10th 2010, 1:16 pm
#30
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Joined: Nov 2008
Location: San Giovanni in Persiceto, Bologna
Posts: 104
Re: Running a UK business from Spain
I'm in a similar situation to you, except i'm in Italy. I have a UK limited company and my domicile is also in the UK. I received a similar letter from my accountant out lining the tax rules across EU member states. I spend under 6 months in Italy and head back to the UK for the remainder of the year.
One thing i have learnt is that everybody has an opinion based on their personal experiences which will conflict with somebody elses opinion also based on their own experience. All i would say is book yourself in for a consultation with a good accountant in Spain who should advise you of the best way to proceed. That way you can sleep well at night.
One thing i have learnt is that everybody has an opinion based on their personal experiences which will conflict with somebody elses opinion also based on their own experience. All i would say is book yourself in for a consultation with a good accountant in Spain who should advise you of the best way to proceed. That way you can sleep well at night.