# IT UK Contractor living in Spain



## fernan1985 (Nov 16, 2014)

Hello everybody!,

I'm currently working for an IT company based in UK and now I have the option to keep working for them remotely from my country - Spain.

I have a few questions as I have never worked as a self-employed before, added to the fact that what I want to do might be a bit unusual, or maybe not.

I've been investigating and apparently being self-employed in Spain is quite a bit expensive so it might not be a good idea.

For that reason I am considering registering my own Limited Company based in UK. As far as I've investigated this is the best option in order to keep the taxes as low as possible, please correct me if I'm wrong.

Questions:

1. Would this be even possible considering I will be living in Spain?
2. Any of you know if I would need to pay again any of the taxes in Spain after paying them in UK? I don't care about the Spanish health care as I would go for a private insurance.
3. Would my retirement pension be transferred to Spain?

Thank you for your help!


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## snikpoh (Nov 19, 2007)

As far as I understand it, once you are resident in Spain, then your tax liability is in Spain.

You may still be able to pay tax in Spain and then declare that here but I'm not sure.

Doing it that way, you would have to pay NI in UK but would not be able to have health care in UK - bit of a waste of money.


I suspect you don't really have a choice as you will actually be working in Spain all be it for a UK company.


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## Calas felices (Nov 29, 2007)

You would have UK taxes to pay on your Company earnings (corporation tax, etc) and then Spanish taxes on your earnings as a employee of that company.


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## Chopera (Apr 22, 2013)

Generally setting up and running companies is easier and cheaper in the UK. However I suspect that if you register your company in the UK but pay yourself as an employee of that company in Spain then your company will also need to be registered some way in Spain as well, because it would need to pay taxes if it employs you.

You shouldn't have to pay the same taxes twice though, due to the dual tax arrangement, but the costs of doing all this might be high.

Once you become resident in Spain I don't think you're allowed to keep paying into UK tax-efficient schemes like pension plans and ISAs because they are based around UK tax breaks whereas you'll be under the Spanish tax "jurisdiction". You can keep making voluntary contributions to the UK state pension though.

If it were me I'd stay resident in the UK and work no more than 6 months each year in Spain, and also take any additional measures to make sure I don't become a tax resident in Spain.


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## Horlics (Sep 27, 2011)

As somebody said, profits made by the company will be taxed in the UK, salary taken by you will be taxed in Spain. You will, of course, have many options as to how and when you extract company profits, but keep in mind that money coming to you will be taxed in Spain. If you pay dividends into a UK account, that will appear on your asset declaration at some time in the future and questions will be asked.

Overall, it's complex. Whilst there are many laymen who could probably run a small Ltd. company in the UK without the need for professional tax and accountancy advice, I'd venture that it's not possible for an untrained person to do so in the circumstances you'll be in. Which means, that sooner or later you're going to have to explain all this to an accountant with cross-border experience, so my suggestion is you do that now. Have a sit down with a pro before you get into this, then you won't lay awake at night wondering what those helpful people on the expat forum didn't know and didn't tell you.

Overall, I would suggest the following mindset - be prepared to live under to tax regime of the country you want to live your life in. Of course, take all legal steps to minimise taxes while doing so.


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