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self employment in uk while living in spain

self employment in uk while living in spain

Old Aug 14th 2016, 6:59 pm
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Default self employment in uk while living in spain

Hi all,just after some advice as i cant get my head round the best way to do this. Assuming brexit doesnt scupper my plans that is.

Im self employed in uk and currently get all my work through a company which deducts 20%tax from me.

The plan is to come home to work for a couple of weeks every 2-3 weeks or so while my family stays in spain. I'm presuming they will still deduct the 20% from me on paying me.

Im finding the prospect of automo and tax returns a little daunting. So im wondering would i be best off setting myself up as a limited company in the uk and paying myself a wage into a spainish bank account?
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Old Aug 14th 2016, 8:43 pm
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Default Re: self employment in uk while living in spain

Originally Posted by chris76
Hi all,just after some advice as i cant get my head round the best way to do this. Assuming brexit doesnt scupper my plans that is.

Im self employed in uk and currently get all my work through a company which deducts 20%tax from me.

The plan is to come home to work for a couple of weeks every 2-3 weeks or so while my family stays in spain. I'm presuming they will still deduct the 20% from me on paying me.

Im finding the prospect of automo and tax returns a little daunting. So im wondering would i be best off setting myself up as a limited company in the uk and paying myself a wage into a spainish bank account?
If you are living in Spain for more than 183 days a year, then you automatically become tax resident, and will pay tax, in Spain, on all your worldwide income, there is nothing that you can do about this apart from living out of Spain for more than 6 months in a year, however if you family has moved to Spain then the authorities may well see this as having made Spain your centre of life, and so they will want their tax from you, You also have to realise that if you are NOT autonomo in Spain, then you. and your family will need private medical cover.
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Old Aug 14th 2016, 9:45 pm
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Default Re: self employment in uk while living in spain

yeah i get all that and thats fine i have no problem paying tax in spain.

im just wondering what that means for me in reality? ie getting taxed at source at 20% then would i need to submit uk accounts as usual and then spainish accounts every 3 months as well?

would i have to wait till the end of the year to claim back my uk taxes or would they be offset against spainish taxes underr the treaty?

also iv read about paying spainish vat on any profits? currently im under the threshold in the uk so how would that work? also is the autonomo payment 265 euro plus vat so therefore over 300 euros/month (after a year)

i cant help think theres an easier way round this if i was an employee coming back to the uk to work then how would it work?

for example if i was to set up a ltd company a family member could be a director and i could work for them??
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Old Aug 15th 2016, 9:32 am
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Default Re: self employment in uk while living in spain

Originally Posted by chris76

for example if i was to set up a ltd company a family member could be a director and i could work for them??
If your family set up a Ltd company and hired you, then the company would have to pay the Spanish social security payment which are even higher for an employee than for a self-employed person

Plus you would need to set up a Spanish branch of the UK company in order to pay you in Spain, which would cost around another 300 euros per month

There is no legal way of getting out of paying the social security payments in Spain
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Old Aug 15th 2016, 6:40 pm
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Default Re: self employment in uk while living in spain

ok thats fair enough,thanks cricketman.

so basically i would need to register autonomo straight away in order to have state schooling/healthcare,or would it be after 6 months?

any idea how the vat aspect would work,if im under the uk threshold?
And then would i submit my accounts/pay tax to spainish authorities every 3 months?
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Old Aug 16th 2016, 7:42 am
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Default Re: self employment in uk while living in spain

Originally Posted by chris76
ok thats fair enough,thanks cricketman.

so basically i would need to register autonomo straight away in order to have state schooling/healthcare,or would it be after 6 months?

any idea how the vat aspect would work,if im under the uk threshold?
And then would i submit my accounts/pay tax to spainish authorities every 3 months?
You would have to register as autonomo as soon as you start working in Spain

However, if you move towards the end of the Spanish tax year then you could get away with staying on the UK system if there were less than 183 days left. But then sign on as autonomo at the start of the next Spanish tax year

You would have to add Spanish VAT (IVA) to your invoices. The VAT system works completely differently to the UK, there is no threshold. Basically you should forget everything you know about being self-employed in the UK as it is completely different in Spain

You should go and see a gestor and if you are not fluent in Spanish then you should use a gestor to file your quarterly accounts. An added expense I know but there is no other way
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Old Aug 16th 2016, 7:38 pm
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Default Re: self employment in uk while living in spain

right that gives me something to think about then.

would i not need to sign on as autonomo straight away though,to get access to state healthcare/schooling?

i keep track of my own books atm and use an accountant to submit my return,so i guess it wouldnt be that much different to now. Except id use a gestor to submit my return? Any idea what sort of price they charge?

thanks again
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Old Aug 17th 2016, 7:42 am
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Default Re: self employment in uk while living in spain

Originally Posted by chris76
right that gives me something to think about then.

would i not need to sign on as autonomo straight away though,to get access to state healthcare/schooling?
Yes, you have to be resident to get healthcare and education, so yes you would need to be working as a Spanish resident and therefore be paying the autonomo quota

You will need to make sure you keep your books in a format that the gestor can use

I don't use a gestor myself but think they charge around 300 euros per quarter
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Old Aug 18th 2016, 8:36 am
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Default Re: self employment in uk while living in spain

Must admit iv been a bit put off with all the beuracracy,but i guess it wouldnt be so bad.

so basically i would charge the company i work for vat (which wouldnt matter to them)
I change the way i get paid in the uk ( i currently get deducted 20% at source) to where i get paid the full amount

I keep on top of my books and pay the gestor around 1200E a year

i pay my autonomo at 265 plus vat - so can you claim the vat back? And then pay my tax in spain every quarter?

lets say the NI comes to around 3600 for the year - is that it or do they also charge a percentage of your wages like in uk
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Old Aug 18th 2016, 9:26 am
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Default Re: self employment in uk while living in spain

Originally Posted by chris76
Must admit iv been a bit put off with all the beuracracy,but i guess it wouldnt be so bad.

so basically i would charge the company i work for vat (which wouldnt matter to them)
I change the way i get paid in the uk ( i currently get deducted 20% at source) to where i get paid the full amount

I keep on top of my books and pay the gestor around 1200E a year

i pay my autonomo at 265 plus vat - so can you claim the vat back? And then pay my tax in spain every quarter?

lets say the NI comes to around 3600 for the year - is that it or do they also charge a percentage of your wages like in uk
(UK) NI is SS here in Spain and is about 265€ per month fixed. There is no SS based on earnings. In fact, you might be elligible for the reduced start-up rate for the first couple of years or so (starts at 50€ ISTR).

Have you actually checked if you would need to be charging VAT? Some professions don't need to pay it.
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Old Aug 18th 2016, 7:57 pm
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Default Re: self employment in uk while living in spain

hi snikpoh,thanks for the reply,im in construction industry,i cant find anything about it being vat exempt.

just been playing around with a couple of tax calculators,one from the uk and spain, at first glances the spainish taxes seem to be a lot higher but on a hypothetical 35k be it euros or pounds ,(theyll be worth the same soon anyway) if married and 2 kids under 25 the net wage is more or less the same,however the uk one takes into account N.I whereas the spain does not.
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Old Aug 19th 2016, 7:13 am
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Default Re: self employment in uk while living in spain

Originally Posted by chris76
hi snikpoh,thanks for the reply,im in construction industry,i cant find anything about it being vat exempt.

just been playing around with a couple of tax calculators,one from the uk and spain, at first glances the spainish taxes seem to be a lot higher but on a hypothetical 35k be it euros or pounds ,(theyll be worth the same soon anyway) if married and 2 kids under 25 the net wage is more or less the same,however the uk one takes into account N.I whereas the spain does not.
If you manage to earn EUR35k per year in Spain in the construction industry then you will be doing extremely well!

The hourly rates for building work here are at least half that of the UK

I recently had four men work all day knocking down a wall in my office, painting and tidying the boundaries and an electrician move the air con to a different wall. All for 400 euros
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Old Aug 19th 2016, 11:42 am
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Default Re: self employment in uk while living in spain

Talking of builders, I needed some dry stone wall repairs here in the UK and the chap I've used several times over the years now has two Polish lads trained up, he can't believe how hard they go at the job, fantastic work ethic and sadly, local youngsters are just not interested in keeping up this skilled and traditional work (and he pays them above minimum wage).

Chris, are you a 'hands on builder' or a contractor/manager? To be honest, with the collapse of the Spanish construction industry you will struggle in either role.
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Old Aug 19th 2016, 1:20 pm
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Default Re: self employment in uk while living in spain

the plan is to work back in the uk,i have no desire to work in spain,like i said in my first few posts i can fly back to the uk, work my bits off for a couple of weeks while staying at a parents house then have 2-3 weeks off back in spain with my family.

i subcontract to a kitchen company doing fitting and basically manage my own diary taking on as much work as i want...so im in a pretty good position really.

my dilema is im basically trying to work how much hassle it is going to be dealing with the spainish tax system and working out what sort of net wage ill have compared to the uk tax system.
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Old Aug 22nd 2016, 4:17 pm
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Default Re: self employment in uk while living in spain

Originally Posted by cricketman
You would have to register as autonomo as soon as you start working in Spain

However, if you move towards the end of the Spanish tax year then you could get away with staying on the UK system if there were less than 183 days left. But then sign on as autonomo at the start of the next Spanish tax year

You would have to add Spanish VAT (IVA) to your invoices. The VAT system works completely differently to the UK, there is no threshold. Basically you should forget everything you know about being self-employed in the UK as it is completely different in Spain

You should go and see a gestor and if you are not fluent in Spanish then you should use a gestor to file your quarterly accounts. An added expense I know but there is no other way
Excellent advice.
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