seasideman

I am trying to find out what the difference is in tax in spain compared to the UK. I keep hearing people say it is more expensive but cannot find any more information.

I am looking for information on tax for someone who is self employed working from home and for someone who goes out to work

Casa Santo Estevo

Autonomo (self employed taxes) will depend on the business and what level of self-employed you are.
All self-employed will have to be VAT (IVA) registered. There are tax breaks for those who are under 30 ( I think). You should emply a gestoria to do your tax returns. So find a good one before you start any work.
Seguridad Social (national insurance) is higher than the UK and depends on your age. However there are more benefits than those self-employed in the UK.
Maybe this will be of help.
Los 16 gastos que tiene que pagar el autónomo mensualmente | Autónomos | Territorio Pyme
This the official government website on how to start a bushiness.
http://portal.circe.es/es-ES/Paginas/Home.aspx

seasideman

thank you

frigilianafreddy

PAYE you have a personal allowance of just €5,500. Yes , not even £4,000!!!!

Then the rates are:

• Up to EUR 12,450: 20 percent (2015) | 19 percent (2016)
• EUR 12,450–20,200: 25 percent | 24 percent
• EUR 20,200–35,200: 31 percent | 30 percent
• EUR 35,200–60,000: 39 percent | 37 percent
• More than EUR 60,000: 47 percent | 45 percent

Its an expensive place to be taxed. Hence a lot of black economy work, which you should avoid as the penalties are harsh - especially for an expat.

marcbernard

There is also a €2000 general allowance, regardless of income. In addition an allowance against earned income is given up to a (lowish) maximum.

seasideman

Going through the figures and it is shocking. The whole point was to work less so I can spend more time with my wife and relax more, but looking at those figures, it means I would not have enough to live on. By only earning £1,600 a month that would have to support me and my wife, it would mean to survive I would have to work more hours like in the UK to survive.

It would be more cheaper for me to rent somewhere for six months of the year and live in the UK for six months and pay my taxes to the UK government, which is crazy.

Is this tax system related to an article I got sent which I have not had time to read. It was an article which appeared in the UK paper last year about tens of thousands of ex=pats came home.

I now have to think through this and get my figures double checked. The last thing I want to do is to work the same amount of hours i do in the UK.

We have decided that Albir is where we will or now would be moving to. We have seen you can get a lot more for your money in other areas, but this area fits us. But unless i can get this tax looked into then it looks like i will be staying in spain for six months each year, which defeats the whole object.

cricketman

GBP1,600 per month is roughly 2,500 euros

To net 2,500 euros per month you would have to earn about 3,800 euros per month

Casa Santo Estevo

You have to get some facts right before you do any calculations.
1)You are mixing pounds with Euros. Work in Euros as that is what you will be spending.
2) you have to know about how many days you can spend in Spain without being considered a tax resident.
3) do your sums. Renting a place out is more expensive when you leave your UK home empty.
4)Finding a short term rent here in Spain in a holiday vacation maybe difficult. Most will be holiday lets.
5) If you stay in Spain without begin included in the tax payment laws You many be required to open a Spanish bank amount, which as an non resident will cost more than you think.
6) calculate also the costs of transporting you and the family belongs across for your stays in Spain.
7) Travel insurance costs, as the EHIC will only cover you for emergency health care.

These are just a few of many financial points that should be considered before you take the leap.

Mitzyboy

Well, I always feel a bit confused when people say they want to move to Spain to work less hours. In my (past) experience, that wasnt often the case. Plus as a Spanish resident you have to declare your worldwide income and assets, dependant on value. There is a wealth tax as well, although the threshold is set so high at the moment it probably wouldnt cause you a problem.

Our plan, just before we moved back, was to spend less than 6 months in Spain and the rest in the UK, keeping us out of Spanish tax and meaning we didnt have to complete the imfamous Modelo 720. That would have been the ideal situation, but for us we owned a property in both countries. You would have to rent, I guess.

We actually sold our place in Spain a lot more quickly than we thought, so plan A went down the drain and we just moved back to the UK completely.

You could do short term lets on your UK property whilst you are in Spain. Many UK businesses put their staff up in rented property now rather than hotels if they are temporarily moved about the UK or on courses.

You've come up with a few "barriers" on the subject of you moving to Spain recently ...... maybe you are not completely convinced it is the right thing to do.

amideislas

Perhaps the notion that you can "work less" in Spain is a remnant of the old days when there was "guaranteed employment". It used to be that after being employed for 1 or 2 years, it was virtually impossible to be fired or laid off without a big payoff, usually at least a years' salary, often more.

I remember lots of young Germans coming to Spain seeking a "Spanish contract" in hopes that after a year or two, they could slack off and spend more time at the beach without fear of losing their jobs, or even if so, getting a big payoff when fired.

But that all changed when labour reform was instituted about 7 years ago (with great protest).

seasideman

so you are saying i would be paying 1,300 euros a month to the government, which is at the moment around £900, think i will stay in the uk then, as that is madness. Sorry, but not prepared to pay £900 a month. I would have to work a lot longer and earn a hell of a lot less than i would in the uk

seasideman

I was convinced of the move so that was wrong to say. Was doing it so my wife could retire early and improve her health. We would have been giving up so much, and the whole point was for me to work less to spend more time with her. But looking at the tax issue, i would now be mad to move and become self employed. I thought the UK tax was high but it is nothing compared to spain.

It seems you are getting picked on for being self employed

Moses2013

Well, often it's just the sun that makes Spain attractive. I work with a lot of Spanish people here in Ireland and there is a reason why they left Spain. I know a guy who runs an Internet shop and registered in the UK, because it's far more easier when it comes to business. If you look at countries when it comes to ease of doing business Spain is a long way away from the UK.

cricketman

I don´t think it is madness and it is similar to what you would pay in the UK

e.g. I used to earn GBP3,000 per month in the UK and net around GBP2,000

Things are generally cheaper in Spain than in the UK

Basically a EUR36k salary is equivalent to a GBP36k salary and is taxed similarly

seasideman

In the UK, if you earn £19,200 a year, then you pay £235 per month. That is the amount if you are not claiming anything for running the business. So there is a huge difference between spain tax system and the UK tax system.