Matthew Turner

Hello everyone,

I'm a new member and looking for tax advice.

I am currently living in Scotland but have on the table a job offer from a business based in Cartagena Spain. I'm married, 47 with 3 children. I will be based in Spain full time. My potential employer has based his offer on a flat 31% rate of tax made up as follows....

RPF : 24.75%
Unemployment : 1.60%
Training: 0.10%
Con Comun: 4.70 %
Total = 31,15%

But I thought that income as per the UK was in 'bands' as follows:

Income Band € % Tax Rate
0 to 17,007 24.75
17,007 to 33,007 30
33,007 to 53,407 40
53,407 to 120,000 47

I also thought that being married I had €6,800 tax free and €1,400 tax free for my first child, €1,500 for my second and €2,200 for my third totaling €11,900 tax free in total before the above tax bands 'kick in'.

Who is right as you can imaging it makes a big difference to net salary.

Also, my potential employer has deployed a cost of living index of 77 for Spain vs. 100 for UK... is this the reality?

Many, many thanks,

Matthew

cricketman

Hi Matthew

Yes you are correct, there are bands like in the UK and tax allowances that are quite generous once you have 3 children. Your figures seem correct

And yes the 77 vs 100 sounds about right too. Obviously it depends which part of the UK you are coming from and which part of Spain you are going to.

35k euros per year is a lot in Andalucia but not so much in Barcelona for example. 35k per year is a lot in Newcastle but not in London

Fred James

Your figures are way out - luckily the right way for you!

As an individual you get a personal allowance of €5151 plus a special allowance on earned income of between €4080 and €2652 on a sliding scale depending on your income. If your income is over €13260 you get the lower amount.

For children you get €1836 for the first, €2040 for the second and €3672 for the third. If any child is under three you get an extra €2244.

There is no married allowance as such. You can be taxed jointly or separately. If separately you both get a full set of allowances and split the children's allowance.

If your wife has no or little income it will be beneficial to be taxed jointly as you get your personal allowance of €5151 plus an additional €3400 for your wife.

You can also deduct any social security payments or pension contributions.

So, if you assume joint taxation your total allowances are at least €18735.

You feel a lot better now don't you?

Rosemary

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

cricketman

For each child, I guess you are saying that you get an extra 1800 euros tax allowance, rather than 1800 euros tax back?

Hacienda has an excellent tax filing system, and at the end of the year, you can ask it to test whether you would get more tax back if you declared seperately or jointly with your partner. Over the past few years, we have changed for one or the other depending on the outcome

amideislas

You weren't using any legal loopholes to pay less tax were you? I would expect you of all people to be asking Hacienda how to pay more. After all, you wouldn't want to become just another greedy tax dodger would you? I'm shocked and appalled.

cricketman

After Fred James' post, I'm worried that I have paid too much tax!

Although the hacienda tax system doesnt really let you pay too much, as all the tax allowances get automatically applied