Evelyn72

I was just browsing the forums to see if I could find any information about the Spanish system having anything similar to working tax credit.

It got slightly more interesting than that when I found a link that stated the Self Employed had to pay NI contributions at a minimum of 225E a month!!!

Erm, seems a bit steep.

Anybody out there got any information on either aspect?

lynnxa

there isn't anything like working tax credit


and yes, if self-employed you do have to pay NI of something in that region every month

it is linked to age - the nearer you are to retirement the more you have topay - and most people I know who pay it are paying way more than that!

Evelyn72

Are you talking for self employment or working for an employer?

Also, what kind of income tax levels would be on top of that?

It just seems rather strange because I'm presuming that Spain has a lot of low level income jobs (pickers etc) and if the NI contributions are similar to those employers have to pay then I don't see how they could afford to employ anybody.

angiescarr

This is a very good question. The burden seems very unfair on the law abiding doesn't it? The other day I was in the hospital and a guy came in with a 'friend' with some kind of eye injury. It was obvious that the 'friend' was his employer but "off the books" because when asked if the injury was work related the friend jumped in and said it wasn't. The friend sat in the waiting room with him but not close by and was clearly a bit irritated to be there and clearly wasn't a genuine friend. The implications of this are greater than they first appear. Firstly there's the worker's entitlement or not to health care, then there's the legal aspect for the employer, time off work paid/unpaid etc... But yes, an honest employer has to pay a similar amount of NI for each worker, plus insurances etc. Not conducive to full employment is it?

Evelyn72

No, it's not, and I was actually hoping things in Spain were going to be a little better than in the UK. Hohum.

It sort of knocks the 'is it cheaper to live in Spain' argument on the head before having to compare the cost of utilities, doesn't it?

I would presume then, that there is a huge black market economy going on in Spain like the 'friends' in the hospital. But then I don't think the Spanish government is much different to here in it's approach to any economic problem:
They cut back, then they tax people (directly or indirectly) Obviously the immediate effect on the purse is that it improves, however it should be long term sustainablility they are looking at. That though, would necessitate building productivity and, quite possibly, losing that immediate (vote getting) boost to the purse. It's also a double whammy because forcing a black market workforce does very little to increase the coffers (other than people have the extra cash to spend) but drains the unemployment funds.

I'm very disappointed.

lynnxa

you asked about self-employed - that's what I gave you


pickers are as like as not working on the black...

Evelyn72

You just rather confirmed my point above then.

Hmmm....

lynnxa

it is crazy

and with over 20% unemployment - oficially - it won't get better anytime soon

Jontee

I currently pay €274,04 monthly Autonomo (self-employed contributions) - yes it is a high figure, and the worse part is that it has to be paid every month even if you do not actually earn enough to cover it sometimes. It gives health cover and a pension. If you have already made SS payments in UK then you will get a spanish pension too when reaching retirement age as there will be no minimum qualifying period in Spain to be met as the contributions made elsewhere in EU are taken into account.

angiescarr

You've got it exactly. I'm sorry you're disappointed. I must say we were a little shocked. As A Brit I wouldn't suggest you try working in the black market unless it's just for a season and you plan to go home. I imagine if anyone would get jumped on it would be the Brits.
On the other hand, I wouldn't change my mind about living here. Not for a moment. But if you expect it to be cheaper overall, I'm sorry, you'll have to wait to see if the £ changes it's fortunes again. There are a lot of Brits living on very little, or even returning now.

Evelyn72

I can't really say I was expecting to live cheaper - Utilities notwithstanding I live in an area of the UK where day to day living expenses are expensive (petrol 1.60 litre) and I actually live very simply compared to most in the UK

It still may be that if you compare water costs, rates, vehicle tax etc etc, that the disposable income remains somewhat similar. However, as a low earner I obviously can't afford debt, and even though I have qualifications in several areas they would be of no use to me in a foreign environment unless I was fluent in the language.

I'm interested to hear that you still wouldn't come back to the UK though...why??

Evelyn72

Incidentally I was looking at the Portugal section and they have just restructured their contributions system, so those on the lowest income pay a lot less - I think the starting level was about 51E per month.

steviedeluxe

I knew Business English teachers based in Madrid who went autonomo, partly because companies wouldn't hire them otherwise. The figure of 274 Euros sounds high, but looking back at my last job in the UK it's actually very similar to the NI I was paying (and aren't Spanish pensions quite generous - I may be mistaken?) I can bet morever that the Business English teachers were paying less tax, admittedly by taking some private classes on the side.
Generally I would guess that if you know you can earn more than 1600 Euros a month and some (if not all) of your customers will be corporate, then going autonomo will pay. A good advisor would then help you to avoid paying too much tax. I can't see that it makes much sense for a temporary worker only on 240 a week to go autonomo!

As for Spain "being no cheaper" I think you only need to take one journey on the London Underground (or get a travelcard) and compare it to Madrid. Or look at your council tax bill. Some things are cheaper. It's just that national insurance isn't.

Evelyn72

... and would these Business teachers be fluent in Spanish?

Evelyn72

What would their alternative be?