# Sorry boring tax question



## DROOBY (Aug 5, 2008)

Alrighty peeps. Heading back to blighty shortly for 3 months working as a catering manager on the festival scene. I will be employed by a British company but as i am resident in Spain not sure how I will be taxed. Anyone any ideas? tried googleing but not getting very far. Just stuff like paying NI and such like.

Thank you very muchly

P.S ITS STILL RAINING


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## almendros (Aug 14, 2008)

DROOBY said:


> Alrighty peeps. Heading back to blighty shortly for 3 months working as a catering manager on the festival scene. I will be employed by a British company but as i am resident in Spain not sure how I will be taxed. Anyone any ideas? tried googleing but not getting very far. Just stuff like paying NI and such like.
> 
> Thank you very muchly
> 
> P.S ITS STILL RAINING


If you earn any money in the UK it will be taxed in the UK irrespective of your normal tax residency.

You will also have to declare the income on your Spanish tax declaration as that covers your world wide income.

You can deduct the tax paid in the UK from your Spanish tax bill.


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## DROOBY (Aug 5, 2008)

almendros said:


> If you earn any money in the UK it will be taxed in the UK irrespective of your normal tax residency.
> 
> You will also have to declare the income on your Spanish tax declaration as that covers your world wide income.
> 
> You can deduct the tax paid in the UK from your Spanish tax bill.



Cheers Almendros,

Do you know if that means i will be double taxed?

Thanks again

D


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## Stravinsky (Aug 12, 2007)

DROOBY said:


> Cheers Almendros,
> 
> Do you know if that means i will be double taxed?
> 
> ...


I appreciate what almendros is saying, but you need to take proper advice. As a Spanish resident your worldwide income is taxed in Spain, although there are the odd exceptions. There will be no double taxation as there is a treaty.

For instance I have UK income, but it is taxed here. I am zero registered in the UK


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## almendros (Aug 14, 2008)

Stravinsky said:


> For instance I have UK income, but it is taxed here. I am zero registered in the UK


Yes, but that is probably because it is pension income which can be paid free of UK tax.

Income from work in the UK will always be taxed in the UK.

The double taxation treaty does not actually apply specifically in this case but normal tax rules allow you to reclaim tax paid in the UK from tax paid in Spain on the same income.


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## nina874 (Mar 13, 2010)

DROOBY said:


> Alrighty peeps. Heading back to blighty shortly for 3 months working as a catering manager on the festival scene. I will be employed by a British company but as i am resident in Spain not sure how I will be taxed. Anyone any ideas? tried googleing but not getting very far. Just stuff like paying NI and such like.
> 
> Thank you very muchly
> 
> P.S ITS STILL RAINING


I dont know the answer to the question, but it is nowhere near as boring as some of the tax questions that I posted!


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## Stravinsky (Aug 12, 2007)

almendros said:


> Yes, but that is probably because it is pension income which can be paid free of UK tax.
> 
> Income from work in the UK will always be taxed in the UK.
> 
> The double taxation treaty does not actually apply specifically in this case but normal tax rules allow you to reclaim tax paid in the UK from tax paid in Spain on the same income.


No, its not pension income.

Income from work in the UK is definately not always taxed in the UK. Sorry, its simply not the case. Go and see the hacienda if you're not sure . As a Spanish resident & tax resident your worldwide income is taxed in your country of residence. As I said, there are the odd exceptions but in general this is always the case.

This has been discussed on so many different occasions on so many different forums and with the benefit of DWP and tax advice.


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## almendros (Aug 14, 2008)

Stravinsky said:


> No, its not pension income.
> 
> Income from work in the UK is definately not always taxed in the UK. Sorry, its simply not the case. Go and see the hacienda if you're not sure . As a Spanish resident & tax resident your worldwide income is taxed in your country of residence. As I said, there are the odd exceptions but in general this is always the case.
> 
> This has been discussed on so many different occasions on so many different forums and with the benefit of DWP and tax advice.


I am not suggesting that you have any choice in where you pay your tax (which as you point out has been discussed regularly) but it is perfectly possible to have to pay it in both countries.

It depends on the type of income but the OP is talking about working as a non resident in the UK for a UK company.

This is what HMRC say about it in their latest booklet on residency.

10.4.1 Earnings you receive from an employer
Although you are not resident in the UK you will still pay UK tax on any
employment duties which you carry out in the UK unless those UK duties
are 'incidental' to an employment abroad – see 10.6. 

As I originally said you will also pay Spanish tax on it (as it is part of your world wide income) and reclaim the UK tax.


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## Stravinsky (Aug 12, 2007)

Well .... fair comment, you suggest what you see fit 
I'll just stick with the professional advice I had from accountants, tax advisors etc in both countries


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## jojo (Sep 20, 2007)

I'm probably totally out of context here, but my husbands accountant has told him that if he spends more than 183 days in spain then that is where his tax liabilities will be !???

Jo xxx


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## almendros (Aug 14, 2008)

jojo said:


> I'm probably totally out of context here, but my husbands accountant has told him that if he spends more than 183 days in spain then that is where his tax liabilities will be !???
> 
> Jo xxx


That's right. It's actually 183 days in one calendar year. You then pay tax on your worldwide income in Spain. There are some exceptions, notably UK government pensions which are still taxed in the UK. Even then, you are still tax resident in Spain and pay tax in Spain on the rest of your income.

My point in this thread is that on top of that requirement to pay tax in Spain you may also have tax deducted from any income from employment in the UK even though you are tax resident in Spain which is the situation that the OP asked about.


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## jojo (Sep 20, 2007)

ok, I'm way out of my depth here, but surely if thats the case you declare it when you fill in your tax form in Spain and they'll deduct or reimburse it???

Jo xxx


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## almendros (Aug 14, 2008)

Exactly.

There is a box on the tax declaration for foreign tax paid. It just gets deducted from the Spanish tax due.

The snag is that if you have less tax to pay than you paid in the UK you can't claim the difference. Also as the tax in Spain is paid in June of the year following the year that you earned it, you could be out of pocket for 12 months or more.


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## Keidik (Nov 26, 2008)

So far as I am aware as you mentioned that you are resident in Spain you would be taxed in Spain even if you earn in the UK....


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## jojo (Sep 20, 2007)

Ok, so lets make myself look really stupid now, but surely if you are resident in Spain and you do a bit of work in England, then you have to produce a P60 and your NI number - now if you have neither of these things I assume they'll ask for your permanent address - Spain and therefore give you a form to give to Spain or put you on emergency tax which should me3an that it will be flagged up on the tax offices computer, so when the day of reckoning comes, it'll be paid to the worker, especially as no tax would have been paid in the UK the year before!!!

Jo xxx


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## almendros (Aug 14, 2008)

jojo said:


> Ok, so lets make myself look really stupid now, but surely if you are resident in Spain and you do a bit of work in England, then you have to produce a P60 and your NI number - now if you have neither of these things I assume they'll ask for your permanent address - Spain and therefore give you a form to give to Spain or put you on emergency tax which should me3an that it will be flagged up on the tax offices computer, so when the day of reckoning comes, it'll be paid to the worker, especially as no tax would have been paid in the UK the year before!!!
> 
> Jo xxx


Jo, it will depend a lot on the person or company who is employing you. In theory they should deduct tax from the payments to you (probably under an emergency tax code - ie no allowances) and you then do a self assessment with HMRC for that year to establish whether you are due a refund. Even though you are non UK resident, under certain circumstances, you may be allowed to claim the usual personal allowances which could reduce the tax significantly.

As for NI contributions, they may be payable in the UK but if you are paying contributions in Spain then it is possible that you may not need to pay UK NI contributions.

It's very complicated but the basic rule still applies - you are liable for UK tax but you can offset it against Spanish tax.

If you fancy some serious bedtime reading have a look at the relevant HMRC info which covers the question of residency etc.

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

All that said, I have no doubt that many UK employers of "temporary" foreign labour just pay you the money and let you sort it out!


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## jojo (Sep 20, 2007)

almendros said:


> If you fancy some serious bedtime reading have a look at the relevant HMRC info which covers the question of residency etc.
> 
> http://www.hmrc.gov.uk/cnr/hmrc6.pdf



...If its all the same to you, I'll let my husbands accountants do the bedtime reading and understanding LOLOLOL

Jo xxx


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## almendros (Aug 14, 2008)

jojo said:


> ...If its all the same to you, I'll let my husbands accountants do the bedtime reading and understanding LOLOLOL
> 
> Jo xxx


A very wise decision! That's what you pay them for.


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## Stravinsky (Aug 12, 2007)

jojo said:


> ...If its all the same to you, I'll let my husbands accountants do the bedtime reading and understanding LOLOLOL
> 
> Jo xxx


Yes it seems strange that most people who have taken legal and financial advice have a different take on the subject doesnt it


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## almendros (Aug 14, 2008)

Stravinsky said:


> Yes it seems strange that most people who have taken legal and financial advice have a different take on the subject doesnt it


It is strange that you won't seem to accept a simple premise that earnings from employment in the UK are taxed in the UK irrespective of tax residency which HMRC clearly state.

I think you may be complicating the situation by considering other types of income and different circumstances to the OP.

He asked a simple, very specific question for which the answer is pretty straightforward.

There are many other circumstances where it can be horrendously complicated but this isn't one of them.


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## jojo (Sep 20, 2007)

almendros said:


> It is strange that you won't seem to accept a simple premise that earnings from employment in the UK are taxed in the UK irrespective of tax residency which HMRC clearly state.
> 
> I think you may be complicating the situation by considering other types of income and different circumstances to the OP.
> 
> ...



It sounds to me that all Stravisnki is saying is that you should seek expert help with regards to tax. He knows all there is to know, but you cant beat a true professional

for the correct answer!

Jo xxx


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## Stravinsky (Aug 12, 2007)

almendros said:


> It is strange that you won't seem to accept a simple premise that earnings from employment in the UK are taxed in the UK irrespective of tax residency which HMRC clearly state.



No no no .... not really strange 
Just based on years of experience, years of speaking to people in similar situations, years of speaking to tax consultants, tax offices and gestors, years of understanding that Spanish tax law is Spanish tax law and English tax law is English tax law, years of earning income (not pension income) in the UK and declaring it in Spain to stop having all the added complications, experience of the Nottingham tax office system of de registering for tax in the UK ... so not strange my friend ... just experience of how things _actually_ work 

But as I say, we've talking this out, so you stick with what you think


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## almendros (Aug 14, 2008)

Stravinsky said:


> But as I say, we've talking this out, so you stick with what you think


OK we will have to agree to differ.

At least I have attempted to answer the OP's question. 

He will be the best judge of what advice to take.


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## jojo (Sep 20, 2007)

almendros said:


> OK we will have to agree to differ.
> 
> At least I have attempted to answer the OP's question.
> 
> He will be the best judge of what advice to take.


The only correct advise to the OP is to seek professional help. He could phone the tax office in the UK! Certainly the advise given here is inconclusive

Jo xxx


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## jojo (Sep 20, 2007)

Here you are Drooby..........

out of interest, I asked my husbands accountant and this was his response. I dont know if it answers the question or is conflicting with anyone elses advise cos I cant even be bothered to read it!!! But it will be accurate and factual

Here's the basic rules:

1) UK income tax is charged on worlwide income of UK residents, & on UK income of non-UK residents.

2) It's quite possible to be tax-resident in more than 1 country at once, or even none. Each country's tax system has different rules.

3) The UK/Spain double tax treaty broadly provides that where UK & Spanish income tax is charged on the same tranche of income, then the combined tax levied is limited to your maximum tax rate in either country. Say the Spanish tax rate is 10% & the UK one is 18% & the Spaniards had first bite, you would pay 10% Spanish tax & then 8% UK tax, so that a combined 18% was levied. 

4) A British citizen, even if Spanish resident (& UK non-resident) is entitled to full UK personal tax allowances.
In practice, it might work out like this. Let's say X is a British citizen, UK non-resident and Spanish resident this year for tax purposes. If the 3 months' UK earnings totalled less than about £6k *and* X has no other taxable UK income this year, then no UK income tax would arise. Whether those earnings would attract any Spanish tax, & whether there are any Spanish personal tax allowances to set aginst them, I can't say.
Hope that helps.


YAWN!!!! 

Jo xxx


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## almendros (Aug 14, 2008)

jojo said:


> Here you are Drooby..........
> 
> out of interest, I asked my husbands accountant and this was his response. I dont know if it answers the question or is conflicting with anyone elses advise cos I cant even be bothered to read it!!! But it will be accurate and factual
> 
> ...


Which is pretty much exactly what I said.

But of course, I am not a professional so please disregard my advice.


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## jojo (Sep 20, 2007)

almendros said:


> Which is pretty much exactly what I said.
> 
> But of course, I am not a professional so please disregard my advice.


will do, cos its also pretty much what Stravinski said too!! The professionals are the ones to listen to

Jo


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## Stravinsky (Aug 12, 2007)

Next time I get another skull fracture Jo, remind me that this is the place to come to make it feel a little better


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## almendros (Aug 14, 2008)

jojo said:


> will do, cos its also pretty much what Stravinski said too!! The professionals are the ones to listen to
> 
> Jo


So we don't offer advice on this forum - just tell them to pay a professional for advice?

So what is the point of a member asking a question if you disregard anything that someone who is not a professional posts?


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## jojo (Sep 20, 2007)

almendros said:


> So we don't offer advice on this forum - just tell them to pay a professional for advice?
> 
> So what is the point of a member asking a question if you disregard anything that someone who is not a professional posts?


We offer advise and help, but it is based on experience and opinion, It is not a factual information site. If it was you'd have to pay and we'd have a case to answer if we got it wrong! So with something thats important and in need of professional advise - thats where we should direct people, especially when there are several opinions

Jo xxx


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## Stravinsky (Aug 12, 2007)

almendros said:


> So we don't offer advice on this forum - just tell them to pay a professional for advice?
> 
> So what is the point of a member asking a question if you disregard anything that someone who is not a professional posts?


For christs sake man!  If you want advice on something that can be as complicated and comnplex as tax then you go to a professional. Sure you can come on here and ask for advice and people will give it based on their own experience, but please dont criticise someone for suggesting that it might be an idea if they saw a professional.

Now lets stop the bickering and get on with the business of the forum eh?


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## almendros (Aug 14, 2008)

jojo said:


> We offer advise and help, but it is based on experience and opinion, It is not a factual information site. If it was you'd have to pay and we'd have a case to answer if we got it wrong! So with something thats important and in need of professional advise - thats where we should direct people, especially when there are several opinions
> 
> Jo xxx


Yes, but everything I have said is backed up by factual information from the HMRC site - and it's free. It's not based on my opinion or necessarily my personal experience. 

If it's wrong you can sue the UK Government.

Where do you think these professionals get their information?


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## jojo (Sep 20, 2007)

I'm gonna close this thread cos its getting stupid and going round in cirlces!! I havent a clue now what on earth are you going on about

Jo xxx


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