Hi Everyone,

My situation is as follows:-
In July my girlfriend and I are moving to Madrid from the UK. She has a research job at one of the universities and my UK company has offered me the chance to work remotely from there. My company carries out international projects but does not have a presence in Spain.

I haven’t sorted the logistic with my company yet but they are fairly flexible about how we manage the situation. As I’ll be a Spanish resident, most likely I will set myself up as either an autonomo or as an SL and will invoice the company on a monthly basis to the same value as my (previous) salary. Obviously I would then be responsible for filing my own tax returns / social security contributions.

I just have a few questions - any guidance would be highly appreciated!

* In my situation is there any advantage to setting up as an SL as opposed to an autonomo? I know it’s harder to set up but are there any tax benefits?
* Or is there an alternative way of doing things that I haven’t realised?
* Would it be possible to have some or all of my salary paid into a UK account? As my salary is in pounds it doesn’t seem to make     sense to have it all exchanged into euros at the current rate.
* Is there anything I need to do on the UK side to say that I’m a non-resident or is it just a case of getting my P45 issued?
* Finally, as can be seen, I’m probably going to need some professional guidance once I’m in Madrid! Could anyone recommend a decent gestor who could help with my situation?

Thanks in advance for your advice.

My first piece of advice is go to a UK tax advisor who deals with Expats moving abroad, don`t rely on forums, if you follow wrong advice, it`ll cost you and you can`t use that advice in a court room.

From my uneducated mind, if your employed by a UK company don`t register Autonomo in Spain, you have to pay every month around 260 Euros to Spanish equivalent of National Insurance.No matter what you earn you pay.

Paying UK tax in the UK is usually enough, you just give the Spanish you proof.You`ll need private health care though as you won`t be paying into the NI of Spain.

But you may find you`ll need to pay some Spanish tax as your a resident in Spain and therefore liable on all your worldly wealth.

Usually though you won`t pay in both countries at the same amount, if you are, get a different advisor.

I would source a good UK based advisor or Spanish based UK advisor, gestor`s can/do make mistakes and blame it on the lingo.

Hi

The most sensible thing you can do is take professional advice that you pay a fee for. Do not rely on opinion on a forum such as this.

My opinion is that you are better dealing with an English speaking accountant or financial planner based in Spain. Why? Because they will know how you will be treated by the Spanish tax authorities once in Spain.

The rules are complex and mistakes will be expensive. If you are taking advice in Spain please, please, please do your background checks. The Spanish authorities do not regulate any where near as much as in the UK. The best way to be sure you are getting proper advice is to use an adviser that is authorised and regulated by governmental or professional bodies.

If you look for an accountant I recommend you use one registered with the ICAEW, any financial planner you approach should be authorised and regulated in both Spain and the UK - that means the DGS and CNMV in Spain and the FSA in the UK. Also make sure to ask the adviser to prove their qualifications. 

Regards

Jeremy

Thanks a lot for the advice - I will definitely take the time to choose the right professional help once I’m in Spain. I’m not too keen on the idea of staying in the UK tax regime as suggested - I would prefer to go down the autonomo or SL route and be registered as a Spanish resident. I’m hoping to set myself up in Spain for the long term.

It would be great to hear from anyone who had been in a similar position to this and could offer any tips. Of course this will not be taken in lieu of professional advice at a later stage!

Cheers

kencongo - 27 May 2009 02:02 PM

Thanks a lot for the advice - I will definitely take the time to choose the right professional help once I’m in Spain. I’m not too keen on the idea of staying in the UK tax regime as suggested - I would prefer to go down the autonomo or SL route and be registered as a Spanish resident. I’m hoping to set myself up in Spain for the long term.

It would be great to hear from anyone who had been in a similar position to this and could offer any tips. Of course this will not be taken in lieu of professional advice at a later stage!

Cheers

You should be able to de register with the UK tax man and pay tax on that income in Spain, but really only an advisor can be more specific to your circumstances.

One good point on being self employed is the Gestors, they don`t excist in the UK, usually they charge a flat fee every month dependant on business size, most sole traders would be charged around 30 euro`s a month.They tend to help source Insurance companies, tax returns etc etc.

Having said that they get paid a % of business from the recommendation, so you can sometimes get charged more than if you sourced it yourself. There pretty good most of the time and you would struggle without one, as they work on a “not what i know, who i know bases”, getting things done in Spain works this way.

If you get a good one they`ll help a lot.But they know people and your business and other businesses, i never really trusted mine.

If your in a small community or town and you`ve got competition, be careful.Regulations in Spain arn`t the same as the UK.Bribes are common, especially in business.

If you watch your back, you should be fine.

Regrettably I am in exactly the same position as you will be after your move to Spain. Since you live in Spain for more than 6 months of the year (approx) you are liable for tax in this country. Since your employer has no presence here they can not contribute to the Spanish Social Security system. Since you only work for one person or company you are employed and not self employed (autonomo) and as such will probably struggle to register as self employed (although you should take advice on this). If you invoice your company on a monthly basis you will need to include IVA (VAT) which complicates matters as this is then expected to be paid to the Spanish tax office and of course is a nuisance and possibly additional cost to your UK employer. My employer will not allow this as I “tick all the boxes” set out by HMRC as employed not self employed. No doubt the same IVA situation would exist if you had a Spanish SL.
You will need to speak to the Centre for non Residents in Newcastle Tel 0044 191 225 9664 for them to amend your tax coding to NT (No tax) and to have your employer stop deducting NI. As I say you’re liability is to Spain but you will find it difficult to register here if at all and pay tax and SS payments.
Personally I have communicated with 3 other people in the same situation, one of them has been writing to the EU in Brussels for over 4 years but with no result so far. The situation of remote workers just hasn’t been thought through and dealt with.
I have taken out private medical insurance for myself and family and put funds aside for any future tax liability when somebody decides to come knocking on the door.
If you want to give me your e-mail address I will forward all the e-mails I have received over the last year - there may be more information in these than I have remembered above
Good Luck
PS You could always keep a UK address and continue to pay tax and NI in the UK - nobody is any the wiser - as long as you have a EHIC card you will always receive medical treatment although to buy anything in Spain nowadays you will need an NIE number or a passport - even for a mobile phone !