# National Insurance payments - Spain



## paddyh (Feb 28, 2011)

Hi,

Was wondering if someone could help (sorry if something similar has been posted before).

I am a director for a UK limited company and am considering moving to Spain permanently. I would continue to be employed/paid by the UK company, but would work from home in Spain.

Does anyone know if I would need to pay National Insurance in Spain, and, if so, how much?

Many thanks.


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## jojo (Sep 20, 2007)

paddyh said:


> Hi,
> 
> Was wondering if someone could help (sorry if something similar has been posted before).
> 
> ...



The rules are far from clear, but the "rule of thumb" is that you pay your taxes and NI in the country in which you live more than 183 days a year

Jo xxx


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## 90199 (Mar 21, 2010)

You have to inform the Inland revenue in U.K. and also the Dept. of Works and Pensions in Newcastle, of your intention to move to Spain. They will advise you of your commitments regarding, income tax and N.I. payments. It may well be in your own interest to continue to pay contributions in the U.K. You should also seek advice from a gestor when you arrive in Spain.

My income is paid in the U.K. and I am taxed at source, I have no other choice, however I believe I am better off paying U.K. taxes. Because I am an old git, I do not have to pay N.I. any more.

Good luck with your move!

Hepa


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## espanian (Mar 2, 2011)

I am in exactly the same situation as you and it is very hard find precise information about this, partly because EU legislation is coming in constantly. However, I believe that if you are living in Spain but employed by a UK company and *paid in the UK*, then you pay your NI in the UK. In order to get health cover, you need to tell the UK government/HMRC/DWP by filling in 2 forms (one for the company and one for the employee) saying that your company is sending employees abroad but they will be employed and paid in UK. This is all so they can waive your NI contributions in Spain, and the UK can provide you with a form called an 'A1' (although don't Google for this because you'll find another form called an A1 that is completely irrelevant!), which entitles you to health care under a reciprocal agreement.

This is my current understanding, and only applies to people relocating (essentially being sent by their employer) to Spain who are still *employed* in UK.

I'll let you know if I find out anything different over the next few weeks!


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## espanian (Mar 2, 2011)

The forms you need are CA3821 and CA3822


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## Stravinsky (Aug 12, 2007)

espanian said:


> I am in exactly the same situation as you and it is very hard find precise information about this, partly because EU legislation is coming in constantly. However, I believe that if you are living in Spain but employed by a UK company and *paid in the UK*, then you pay your NI in the UK. In order to get health cover, you need to tell the UK government/HMRC/DWP by filling in 2 forms (one for the company and one for the employee) saying that your company is sending employees abroad but they will be employed and paid in UK. This is all so they can waive your NI contributions in Spain, and the UK can provide you with a form called an 'A1' (although don't Google for this because you'll find another form called an A1 that is completely irrelevant!), which entitles you to health care under a reciprocal agreement.
> 
> This is my current understanding, and only applies to people relocating (essentially being sent by their employer) to Spain who are still *employed* in UK.
> 
> I'll let you know if I find out anything different over the next few weeks!


How do you deal with the fact then that you _have_ to become a Spanish resident in the required period, and are therefore no longer a UK resident?


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## espanian (Mar 2, 2011)

Stravinsky said:


> How do you deal with the fact then that you _have_ to become a Spanish resident in the required period, and are therefore no longer a UK resident?


Well, as I understand it, I can be resident in Spain, although covered by the UK National Insurance (i.e. as I am employed in the UK), through a reciprocal agreement. Obviously, this is not intended as a permanent thing as it only works for 24 months, i.e. assuming the 'employee' is temporarily placed abroad and not emigrating.

I am not sure what would happen after the 24 months. I guess the HMRC would deem you permanently resident in Spain at that point and different rules would kick in.


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## espanian (Mar 2, 2011)

If you have the stamina, you can read about it here: HM Revenue & Customs: National Insurance contributions: new rules for workers moving around the EU on or after 1 May 2010 and their employers


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## gus-lopez (Jan 4, 2010)

The Op said he was intending to move to spain & work from home ,which is not the same as being sent by an employer to work abroad. Yes you could try to use these rules but I think in the end that you would fall foul ofboth the HMRC & the Hacienda. In reality if you are proposing to remain working for & paid by a UK employer whilst living in Spain you would have to make a tax declaration here in Spain as well.


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## espanian (Mar 2, 2011)

Perhaps, but I am only going by what the hmrc have told me. His situation is slightly different in that he plans to relocate permanently. However, if he deems it a temporary placement (e.g. is not selling up in the UK) then the legislation applies. I work from home in the UK but am still employed, so I can't see that the building he is sitting in to work is relevant. This is (recent) EU legislation by the way, so applies in Spain too.

Saying all that, I'm happy to submit a null tax return in Spain if I have to.

I'll let you know how it goes!


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## Stravinsky (Aug 12, 2007)

espanian said:


> Perhaps, but I am only going by what the hmrc have told me. His situation is slightly different in that he plans to relocate permanently. However, if he deems it a temporary placement (e.g. is not selling up in the UK) then the legislation applies. I work from home in the UK but am still employed, so I can't see that the building he is sitting in to work is relevant. This is (recent) EU legislation by the way, so applies in Spain too.
> 
> Saying all that, I'm happy to submit a null tax return in Spain if I have to.
> 
> I'll let you know how it goes!


Yes ... but you are going on what HMRC say. They are not Spanish Tax experts. When you are resident in Spain you are in most circumstances subject to Spanish tax, and Hacienda work by what they say ..... not by what HMRC say 

And yes ..... I do run a UK Ltd Company from Spain.


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