flotsum

Just wondered if anyone has had experience of this.

My husband is spanish but grew up in England and paid tax over there for 30 years, when we moved to spain because he was a spanish citizen he automatically became fiscal and we have paid tax over here for 3 years, we filled in all the forms to say we were leaving the UK etc. However he is self employed and goes where the work is, which unfortunately this year has mainly been in the UK add that to a family holiday and he is going to go over the 183 days! I have read all the info from HM customs, my mind is bamboozled, I have tried to understand it from the spanish side, even more bamboozling. I just wondered if anybody has had experience of actually having to do this.
From what I have read we should continue paying tax here, which we do every 3 months, then do a self assessment for the UK, add in the tax we have paid in spain and they will charge us the rest, but I think this sounds too easy which makes me think I am clutching at straws ie reading what I want it to say!

Fred James

It's only 90 days to become tax resident in the UK.

He has to pay tax in the UK on the money he earns irrespective of whether he is tax resident there or not.

Even if he is deemed tax resident in the UK and spends less than 183 days in Spain he will still be considered tax resident in Spain as his family and home are in Spain.

Under the tax treaty that means that he will not be considered UK tax resident but as the money is earned in the UK he will have to pay UK tax on it and in Spain and offset the UK tax against the Spanish tax he pays.

flotsum

OK thanks so basically we need to do a UK self assessment every year, when we get the tax code through and pay the tax we then have to show this to our assessor here who has to adjust our spanish tax with Hacienda. How does this work with UK tax year being april to april and spains being jan to dec? Thanks for your help! Think we have been doing this wrong for the last 3 years!

Fred James

Your assessor should know how to do it. It might be possible to pro-rate it to tie in with the Spanish tax year. On the other hand he is more likely to just claim back the tax for the whole of the UK tax year in the current Spanish year.

He doesn't submit any paperwork to Hacienda so he can put pretty much any figure in that he thinks is OK.

Im_and_Er

For Spain the UK tax year is irrelevent, just declare the sum of the UK earnings during the Spanish tax year.

Unless there are other sources of income in UK then he shouldn't need to fill in a self assessment form. If he hasn't had the correct tax code for the year then HMRC can easily deal with PAYE over or under payments separately.

Fred James

The problem isn't splitting out the earnings - that's the easy bit, it's working out how much UK tax that you want to offset. You could just prorate the tax on the same split as the earnings but with variable earnings in two tax years it could get a bit complicated.

flotsum

oooooooo my head! Although he is self employed he only tends to be subcontracted by one UK company who give him work in the UK and channel islands, he finds a little spanish work for himself He is paid a flat rate, from that we have to pay for flights, car hire accommodation etc So would we subtract all of these outgoings then arrive at what he was actually paid and declare this? When he first went self employed all of these were part of the deal but as times changed these were removed and he was left to pick all this up as the contracts are negotiated by the other party. Our spanish assessor takes a percentage of all of these as tax relief she says she cannot take all of it but if this is all really under UK tax how would we do this?

Im_and_Er

If he is not PAYE in UK and paid gross then all bets are off and he will have to declare those earnings in Spain and be taxed accordingly, even less reason to submit a UK self assessment.

Domino

I get the impression you are doing all this yourselves.

I know it costs to pay a specialist but have you not got yourself an accountant to work it out and find the most tax efficient manner of covering all this ??

regrettably the information provided by people like HMRC doesn't link to the alternative options where you can offset against this and that.

the whole thing is designed by people jealous of your success and will have you tied up in knots

Get an Accountant.
(NO I am not an accountant - do you honestly think I would be here if I was ?)

rgds

flotsum

Thanks everyone, yes Domino had come to the conclusion that we will have to change our accountant over here to someone who has had clients in this situation before as our accountant has not. We are quite happy paying our tax in spain and have been but I do not want the HMRC suddenly accusing us of tax avoidance, not sure we would be on the top of their list as my husband tends to fly in and out on his DNI and has Spanish passport but knowing our luck not sorting it out may well come back to bite us!

jackytoo

Remember that not all Accountants are expert in international tax laws.

flotsum

Thanks at least ours has told us she is not!