Hi -

I’m a UK citizen going to start work (hopefully) for a Spanish company based in Madrid…

So my question is:

Are my earnings taxed in the UK?  Or do I pay tax in Spain?  Or do I pay tax in both?

Thanks.

Assuming you yourself will be working in Spain, you will be taxed in Spain on your worldwide income but if you have any other income in the UK that is taxed, you will not have to pay tax on it twice. As regards the Madrid job, the UK will not be interested.

Apologies, yes I should have been clearer - I’ll be living in Spain.

Thanks shaggy,

Some follow on questions if you don’t mind - (to anyone that knows!):

1)  So where would that leave me with regards to my UK stamp contributions etc for my state pension?  i.e. do I still have to pay national insurance etc in England?

2) Is the general tax rate in Spain lower than the tax rate in UK?

3) If I’m working in Spain and living in a rented property, would I have to pay their equivalent of council tax?

Elliott79 - 06 April 2011 05:49 PM

Apologies, yes I should have been clearer - I’ll be living in Spain.

Thanks shaggy,

Some follow on questions if you don’t mind - (to anyone that knows!):

1)  So where would that leave me with regards to my UK stamp contributions etc for my state pension?  i.e. do I still have to pay national insurance etc in England?

2) Is the general tax rate in Spain lower than the tax rate in UK?

3) If I’m working in Spain and living in a rented property, would I have to pay their equivalent of council tax?

1 - you should pay into Spanish system towards pension and health. You will not be allowed to continue NI contributions in UK (there may be some ways around this if your move is short term). For a full UK pension you need 30 years contributions. If you have made, say 10 years contributions you will get 10 thirtieths of the full UK pension…the rest made up from you Spanish payments.

2 - I think they are similar but you need someone with better knowledge for a proper answer. 

3 - As a tenant you would not normally have to pay local property taxes. These are levied on the owner and cannot be enforced against a tenant by the council. Some leases may contain a condition that you are required to pay but this is highly unlikely. Of course, if a rental amount is very high then these taxes may have been built in covertly but then nobody would rent the place.