# Tax affairs: Best option for consultants living in Spain, but being paid in GBP



## firmo (Apr 10, 2018)

We are a family of four and have been living in Spain since July last year, but this month my wife and I have started as consultants. 

We are both making money and have different clients, all of whom are based in the UK, paying us in GBP. 

Obviously we need to pay tax in Spain, but what is the best (most tax efficient) way of doing this? 


Would it be best to set up a company and have us both as employees? 
​Would we set the company up in the UK? 
​Would we set one up in Spain? 
​Either, neither, or both? 
And are there any other options or things to consider?


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## snikpoh (Nov 19, 2007)

firmo said:


> We are a family of four and have been living in Spain since July last year, but this month my wife and I have started as consultants.
> 
> We are both making money and have different clients, all of whom are based in the UK, paying us in GBP.
> 
> ...



I suspect the ONLY route is to be consultants (self employed or autonomo) in Spain.

You then bill your UK customers just as you do now.


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## firmo (Apr 10, 2018)

snikpoh said:


> I suspect the ONLY route is to be consultants (self employed or autonomo) in Spain.
> 
> You then bill your UK customers just as you do now.


But in order to bill clients in the UK, I didn't know if it would be beneficial to create a limited company in UK and receive payments in GBP, and then use that company for transferring funds in to our Spanish account (or Spanish company, if we created one) ...OR to simply create a company here in Spain and invoice our UK clients in Euros. 

I also don't know if it would be more beneficial for both my wife to be self-employed, or to have a company with us both as employees, and pay salaries to ourselves. 

Has anyone had to make these decisions before? And if so, what route did you go down?


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## Pipeman (Apr 1, 2016)

I'm following this thread with interest. I'm in IT contractor with my own Ltd and looking to scale back to a 3 day week from August and as my project can be managed remotely I can commute from Spain for the 1 or 2 days a month I need to be in London.

I'd like to setup a Spanish company so that I can expense my travel costs and get medical cover etc but the fact that my client is the MOJ and various agency agreements means I have to be a UK registered company... so am looking at forming a Spanish subsidiary company which would "employ" me.

My accountant is going nuts....


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## ccm47 (Oct 15, 2013)

The only safe way to sort out what will be acceptable to HMRC is to talk to them in advance! The link for contacting them is here: https://www.gov.uk/government/organ...ries-for-individuals-pensioners-and-employees


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## davexf (Jan 26, 2009)

Hola 

What you need is good financial advice from a professional who deals in this type of scenario and keeps up to date. 

Back in 2002 I dealt with Blevins Franks and it was the best £500 I have ever spent! I have no connection with Blevins except as a satisfied customer. 

Davexf


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## Williams2 (Sep 15, 2013)

Pipeman said:


> I'm following this thread with interest. I'm in IT contractor with my own Ltd and looking to scale back to a 3 day week from August and as my project can be managed remotely I can commute from Spain for the 1 or 2 days a month I need to be in London.
> 
> I'd like to setup a Spanish company so that I can expense my travel costs and get medical cover etc but the fact that* my client is the MOJ* and various agency agreements means I have to be a UK registered company... so am looking at forming a Spanish subsidiary company which would "employ" me.
> 
> My accountant is going nuts....


To tell you the truth, I don't think there are any of the 'tax deductable expenses' ( I'm my own Ltd Co ) of the sort
you enjoy as a Contractor in the UK, compared to the limited or ONLY choice you will find in Spain.

As snikpoh said the ONLY choice is self employed or what Spain call Autonomo.
As there's nothing like the - I'll set myself up as a Limited company in the UK and start doing the tax deductable
expenses of Contracting as a Ltd Company and have myself, the wife and the children as sole shareholders
of the company, etc, etc, etc.

You have to remember that Spain is mean, mean, mean, so there's no ISA's, SIPPS and other tax advantages
to residing in Spain, like you enjoy in the UK.
The only saving grace maybe - is that the Spanish State Pension is far better than the UK's State Pension
which according to the latest State Pension world rankings, puts the UK on a par with Columbia in
South America.

I believe other IT contractors who have posted here in the past seemed unphased by the 'well I'm lumbered
with Autonomo or nothing' when moving to Spain.

Maybe they found some perks with the Autonomo status, although their forte was designing eye catching
web pages for their clients in the UK and overseas, so they could work from home.

Finally your bit about 'my client is the MOJ' - which I assume is the UK's Ministry of Justice. 
In which case I strongly advise that you seek advice concerning your future employability with the MOJ 
as the MOJ, is part of UK government and UK government will require you to remain a resident of the
UK. In order to safeguard your SC or DV level of Security clearence; which could be in jeopardy once you
move to Spain and become non UK resident.


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## Williams2 (Sep 15, 2013)

Pipeman said:


> I'm following this thread with interest. I'm in IT contractor with my own Ltd and looking to scale back to a 3 day week from August and as my project can be managed remotely I can commute from Spain for the 1 or 2 days a month I need to be in London.
> 
> I'd like to setup a Spanish company so that I can expense my travel costs and get medical cover etc but the fact that my client is the MOJ and various agency agreements means I have to be a UK registered company... so am looking at forming a Spanish subsidiary company which would "employ" me.
> 
> My accountant is going nuts....


Further to my post above, yes maybe it will work, if you commute from Spain but no doubt you will need to
keep a permanent address in the UK to maintain your UK resident status; although setting up a Spanish 
subsidiary linked to you, might raise eyebrows with the MOJ and doing all your future MOJ work from 
your 2nd home in Spain, might raise their eyebrows even further.

:shocked:


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## Pipeman (Apr 1, 2016)

Thanks for the feedback.

I'm talking with my accountant who is engaging a European tax specialist regarding the best structure should I go ahead. 

My relationship with MoJ is B2B so there are no conditions contractually that worry me. I'll still be keeping my UK Ltd up and running and for all intents and purposes any difference in physical location is mute as I'll be VPN connected to the secure network (as I've done before when I've been in Spain on holiday and had to got something done urgently).


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## Williams2 (Sep 15, 2013)

Pipeman said:


> Thanks for the feedback.
> 
> I'm talking with my accountant who is engaging a European tax specialist regarding the best structure should I go ahead.
> 
> My relationship with MoJ is B2B so there are no conditions contractually that worry me. I'll still be keeping my UK Ltd up and running and for all intents and purposes any difference in physical location is mute as I'll be VPN connected to the secure network (as I've done before when I've been in Spain on holiday and had to got something done urgently).


Yes best tread carefully and stick fastidiously to whatever legal obligations you might encounter along
the way.


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