# Moving to Spain with UK company | Ideal set-up & tax implications



## ekr (Dec 26, 2020)

Hi everyone,

Hope you're enjoying the holidays! I already found some useful information on this forum but still wanted to start a discussion here to see if anyone is or was in a similar situation. Thanks in advance for your help!

*My situation in a nutshell:*

I am currently employed by a UK Ltd. company in London in a regular and unlimited employment contract, paying my PAYE and NI in the UK
My plan is to move to Spain (Madrid) permanently from March/April 2021 and continue to work for the UK company from there remotely
My company does not have a legal entity in Spain
I do have my own Ltd. company in the UK (separate from my employer's Ltd. company) as I am planning to set up an E-commerce store
*What I found out already:*

I researched online and came across 2 main options: (1) become an Autonomo in Spain, pay national insurance by myself and invoice my UK employer monthly for the salary and national insurance and (2) my company sets up a dependance in Spain and employs me via a Spanish contract.
My preferred option is (1) as I don't want my company to have any extra hassle with corporation tax etc. as they are already very flexible allowing me to work from Madrid.
*My questions are the following:*

Am I able to work in Spain via my own UK Ltd. company and invoice my employer via this Ltd. company, however pay tax in Spain (without becoming Autonomo in Spain)? Or is there no way around setting up as an Autonomo in Spain?
Would I be able to deduct certain professional expenses (i.e. IT equipment, car etc.) from the tax in Spain via my own Ltd. company in the UK?
I have stocks in an ISA (UK) and a stocks portfolio in Germany (I am a German national). I assume that the tax benefit of the ISA will vanish once I am in Spain and I am paying tax on my realised gains (both in UK and Germany) in Spain?
Thanks again and have a great start to the new year everyone!


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## Megsmum (Sep 9, 2012)

First port of call is will you qualify to be resident here as a thirds country resident due to Brexit. 

Ignore. Me you are German national 

Apologies


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## ekr (Dec 26, 2020)

No problem and thanks anyway @Megsmum. Yes, this shouldn't be an issue as I'm a German national. Does anyone else have experience with a similar situation? Thank you!


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## Isobella (Oct 16, 2014)

Perhaps ask on a German forum. There could be others who are in a similar situation.


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## ekr (Dec 26, 2020)

Thanks @Isobella - will do!


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## ekr (Dec 26, 2020)

However, the fact that I'm German doesn't actually play a big role. It's more a moving from UK to Spain as a EU national situation.  Thanks anyway!


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## xabiaxica (Jun 23, 2009)

ekr said:


> However, the fact that I'm German doesn't actually play a big role. It's more a moving from UK to Spain as a EU national situation.  Thanks anyway!


You're right. Apart from being an EU national with the right to live & work in another EU country, it has no bearing at all.

I suspect that Brexit is going to make your plans extremely complicated though, as far as working for a UK company from an EU country. The situation even before Brexit wasn't exactly straightforward, but now...


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## xicoalc (Apr 20, 2010)

If you are going to be living in Spain permanently, thus becoming a Spanish resident and tax resident, I can only see the involvement of your own UK Limited company as one more hassle in process. You need to be paying your taxes in Spain and indeed, as a resident you are liable for taxes on your worldwide income (double taxation agreements apply obviously although I am not sure if Brexit will affect that in any way). You will need to be contributing into the Spanish system in terms of social security in order to gain healthcare rights etc. So, wouldn´t it be simpler for you to be autónomo in Spain and simply invoice the UK "employer" for your work?

Yes, this will mean social security payments but it will also cut out the taxation in the UK completely as well as the associated accountant costs and so on. Really you need an expert tax adviser to go through everything to look at the most beneficial ways. But, don´t use a UK accountant, nor a Spanish one if they respectively only have knowledge of the way things work in their own countries. There are accountants and tax advisers out there that have representation in both the UK and Spain and will probably be more suited for this type of expert advice.

One thing about being autónomo. I used to be many years ago and served a range of clients. I seem to recall that when I landed a gig that meant I would be devoting nearly all of my time for a while to one client, my accountant talked about rules prohibiting self employed people from only working for one business (as many unscrupulous employers force workers to be self employed and invoice them because its cheaper). For me it was not an issue as was a temporary thing and I was still doing bits and bobs for others but I just recall him talking about if that particular client grew it may be complicated. So ask about that too!


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## ekr (Dec 26, 2020)

Thanks very much @xicoalc !


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## Odoyle (Dec 17, 2020)

ekr said:


> Hi everyone,
> 
> Hope you're enjoying the holidays! I already found some useful information on this forum but still wanted to start a discussion here to see if anyone is or was in a similar situation. Thanks in advance for your help!
> 
> ...


I'm in a very similar situation, albeit with an added layer of complexity as a UK national.

If my employer set up a branch/subsidiary in Spain, with the aim of employing me via a Spanish contract, would a transfer likely be straightforward or, as a non-EU national, would my company have to act as corporate sponsor?

I think that the autonomo option might be more realistic, but one thing that hasn't been mentioned is VAT. It was my understanding that VAT would need to be charged on any invoice I send - is this correct, for a B2B service to the UK?

If it is, then I'd essentially have to take a 20% hit on my salary as I can't ask my employer to pay the extra. Or is this negated by the reverse charge mechanism?

@ekr do please let me know if you manage to contact a tax expert about this. I'm waiting to hear back from a Spanish tax specialist and will let you know if I receive any useful info.


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## Geothermal (Feb 9, 2021)

Odoyle said:


> I'm in a very similar situation, albeit with an added layer of complexity as a UK national.
> 
> If my employer set up a branch/subsidiary in Spain, with the aim of employing me via a Spanish contract, would a transfer likely be straightforward or, as a non-EU national, would my company have to act as corporate sponsor?
> 
> ...


I´m very much wondering about this too! Please do share if you find out!


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## Overandout (Nov 10, 2012)

Here is my "semi-educated" guess on the questions from Odoyle:

If your employer sets up a branch in Spain, that branch will have to be your corporate sponsor for the work visa and the rules will be applied as for any other work visa. In fact some countries apply a ratio quota of nationals to "expats" so if you were the only employee of the branch, that would be a 100% expat ratio which I don't think is going to be acceptable, although I confess that I don't know if such a ratio / quota exists in Spain.

VAT amongst EU member states for services was 0 rated, but now that the UK is out, I guess that has been discarded and as autonomo you would need to charge VAT, but that said I suppose we revert to the "old" tax treaty, but what that means for recovery of VAT charged I'm afraid I don't know, but as a minimum, it is going to have a cash flow effect.


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## Geothermal (Feb 9, 2021)

I just called Agencia Tributaria, and aside from the first person being incredibly rude and hanging up twice, the next surprisingly answered my question - she said I don´t need to charge IVA to my UK client (I work in services, medical communications) and to put no subjeto a IVA on the invoice I send. So nice to have a straight answer, obviously there´s no proof that this way is correct, but I´m going to roll with it... 

My next question to those in a similar position is: how to get paid. What I´d like to do is get paid by my clients into my Transferwise account (giving UK bank details to avoid incurring international charges on their end that they would likely pass onto me) and then being able to transfer and convert this via transferwise into my own Spanish bank account. My gestor told me that the account needs to be in Spain, so I´m just a little concerned this will cause problems though. But I don´t see why it should, either way, Hacienda are going to tax me based on my invoiced GBP amounts at the (likely unfavourable) exchange rate that they set each year. But maybe there are rules governing where money should be? Again, I don´t see why, since they could tax me on income outside of Spain if they wanted (and if I had any). 

Does anyone know anything either way about this?


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## EllaF10 (Feb 27, 2021)

Odoyle said:


> I'm in a very similar situation, albeit with an added layer of complexity as a UK national.
> 
> If my employer set up a branch/subsidiary in Spain, with the aim of employing me via a Spanish contract, would a transfer likely be straightforward or, as a non-EU national, would my company have to act as corporate sponsor?
> 
> ...


Hi there, I am in a similar position too.

We’re you able to find a tax expert you would recommend to talk about this? 

Thank you! Ella


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## Geothermal (Feb 9, 2021)

HI Ella,

No, but after I called Hacienda, I feel confident about not needing to charge IVA for my services to a UK client. 

Good luck!


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## Geothermal (Feb 9, 2021)

However, what I have decided is that putting down a foreign bank account (e.g. a UK transferwise account) to avoid me incurring fees from my clients bank, my spanish bank and a poor exchange rate, well, I decided that it probably isn´t worth it because I fear the Hacienda will not like it and cause problems. So... playing it safe. I guess the losses probably won´t be that bad... let´s see! Invoice day today!


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## joewbrown (Jul 15, 2021)

Heya, I'm about to be the same situation except without the Ltd company. Did you end up using it? Any updates on how this is going for you?

I also use Transferwise and was hoping to keep doing so. You said you're using a Spanish account - are you still able to take advantage of Transferwise's exchange rates? If not - what sort of fees are you paying?


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## Odoyle (Dec 17, 2020)

joewbrown said:


> Heya, I'm about to be the same situation except without the Ltd company. Did you end up using it? Any updates on how this is going for you?
> 
> I also use Transferwise and was hoping to keep doing so. You said you're using a Spanish account - are you still able to take advantage of Transferwise's exchange rates? If not - what sort of fees are you paying?


As an aside to the main question, it's worth looking at revolut too. It seems that they offer zero charge on weekday exchanges for standard currencies, up to a certain amount.

TransferWise does charge a fee, but this is less than Revolut's once the free monthly allocation is used up.

So it makes sense to have both accounts, transfer the fee-free amount that revolut allows and then the rest with TransferWise.


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## Odoyle (Dec 17, 2020)

On another note, is it necessary / advisable to have an accountant, as an autonomo? Do most autonomos use one?


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## Geothermal (Feb 9, 2021)

Odoyle said:


> On another note, is it necessary / advisable to have an accountant, as an autonomo? Do most autonomos use one?


Yeah, you almost certainly need a gestor (that´s what I use, but my father-in-law is one so that made it easier). A full blown accountant may not be necessary. You could submit everything yourself, but they make it pretty difficult to do and you´re probably likely to end up incurring fines because you didn´t know how to code certain things or changes to the rules they make over time etc. The reporting period is every quarter...


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## Geothermal (Feb 9, 2021)

joewbrown said:


> Heya, I'm about to be the same situation except without the Ltd company. Did you end up using it? Any updates on how this is going for you?
> 
> I also use Transferwise and was hoping to keep doing so. You said you're using a Spanish account - are you still able to take advantage of Transferwise's exchange rates? If not - what sort of fees are you paying?


I started and have continued for these 6 months at least using my Spanish bank, La Caixa, and getting charged 15-20 euros for each invoice paid from my UK clients. As I only have two major clients, it´s annoying, but I decided not to lose too much sleep over it. But if you were expecting to receive quite a lot of different payments from different clients that could easily add up. If anyone does use transferwise or similar without problem to receive income from foreign clients, please let us know.


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## Odoyle (Dec 17, 2020)

Geothermal said:


> Yeah, you almost certainly need a gestor (that´s what I use, but my father-in-law is one so that made it easier). A full blown accountant may not be necessary. You could submit everything yourself, but they make it pretty difficult to do and you´re probably likely to end up incurring fines because you didn´t know how to code certain things or changes to the rules they make over time etc. The reporting period is every quarter...


Thanks for the response. Do gestors tend to charge on a monthly or quarterly basis then?


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## joewbrown (Jul 15, 2021)

How about a revolut account - anyone tried them? They have local iban numbers, so can they count as a local bank account?


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## sadlybroke (Jun 19, 2012)

Geothermal said:


> If anyone does use transferwise or similar without problem to receive income from foreign clients, please let us know.


I used CurrencyFair before my UK company had EUR and USD currency accounts. Basically, you register an expected payment, raise an invoice with CF's bank account and their reference number and the payment can then be converted to whatever currency you want. This is a condition, you may not receive payment in EUR and withdraw it from CF in EUR, so it should work well if your clients pay you in GBP and you want to withdraw the funds in EUR. Also, they are a marketplace, so you may set your own exchange rate if you do not need to withdraw the funds immediately and wait until the rates change. It has worked well for me. Their fees are about £3 per withdrawal so if you can, you may withdraw funds less often to save a few extra Euros. 

My clients are mostly large international corporations. They use their banks to pay my invoices and they have never had issues with sending money to CF.

CF have a referral program so if you think my post is useful and you want to sign up, please use this link to do so.


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