# Help required moving down to Malaga to live from UK December



## jojohn34 (Aug 19, 2013)

Hello could someone who as already moved from the UK, and is also a self employed person, who earns his or hers income from the UK, but lives in Spain please get back to me with regards with my questions.

I would like to know for sure about the following

I have built up a drop- ship business working from home in the UK, I make £3000 a month from it, I simply advertise the products on my website, then when I get a customer I take my part of the money and send the rest to the drop - shipper who sends the item to my customer.

I wish to move to Spain to be close to my daughter and grandson who also live their in Malaga, my question is about taxes and health insurance.

So I would like to carry on paying my UK tax on my UK earnings, so will be moving to Spain as a non tax resident.

I do not earn enough here in the UK to pay VAT, nor would wish to have to pay VAT in Spain, I feel that I earn all my money in the UK, and need to know if I can come and live in Spain, and carry on paying my Taxes on my UK earnings in the UK.

I wish to pay for my own private health insurance because I prefer to.

Can I do this with out any long complicated procedures, I will not be earning any money in Spain, I will be driving a Spanish reged car, that I will buy in Spain.

What would I need do on entry to Spain, what forms do I need to fill in and why, I would really like to hear from people who have done the same as me, so please anyone who is Actually self employed on there own with no staff no factories nothing just a UK self employed earnings, please could you tell me the right way to go about it, it would be a great help, thanks all for reading this.


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## DunWorkin (Sep 2, 2010)

I did exactly as you are planning when I first came out here in 2004.

I ran an internet based company in the UK for many years prior to the move (not a limited company but a partnership with my husband). All our customers were UK based and paid us in GBP into a bank in UK.

When we came to Spain we continued to pay tax in the UK as before. DH was over 65 at the time of the move so we were eligible for Spanish state healthcare.

We finally retired and ceased trading in 2011.

We had Spanish NIE numbers and residencia but never had to pay Spanish tax.

From what other people have posted recently I think things have changed since we came out but that was how it was in 2004. 

I think you now have to show income into a Spanish bank to qualify for residency.


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## olivefarmer (Oct 16, 2012)

A whole host of folk will be along shortly to explain that if you are resident here for 183 days or more then your all your worldwide earnings are taxable here. There are a very few exceptions like some special government pensions.


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## zenkarma (Feb 15, 2013)

olivefarmer said:


> A whole host of folk will be along shortly to explain that if you are resident here for 183 days or more then your all your worldwide earnings are taxable here.


Yep, that's pretty much it.

If you live in Spain for more than 183 cumulative days per year (in total, they don't need to be consecutive) you automatically become a Spanish fiscal tax resident. This means that not only do you have to pay Spanish taxes on your worldwide income, but you also have to declare all your worldwide assets worth more than €50,000 euro's. That includes property, shares, bank accounts, pension funds and so on.

The UK and Spain have a reciprocal tax agreement. What that means in practice is that you won't pay the same tax twice, but it doesn't mean you won't be liable for Spanish taxes. Let's say for arguments sake your UK tax is calculated at €12,000 and your Spanish tax on the same earnings as €15,000. You pay €12,000 to HMRC and 12,000 - 15,000 = €3,000 to the Spanish Hacienda. 

It's quite likely given the lower personal allowance limits and higher basic rate of tax in Spain that there will be a difference to pay.


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## DunWorkin (Sep 2, 2010)

zenkarma said:


> Yep, that's pretty much it.
> 
> If you live in Spain for more than 183 cumulative days per year (in total, they don't need to be consecutive) you automatically become a Spanish fiscal tax resident. This means that not only do you have to pay Spanish taxes on your worldwide income, but you also have to declare all your worldwide assets worth more than €50,000 euro's. That includes property, shares, bank accounts, pension funds and so on.
> 
> ...



As I said in my post above that was not the case in 2004. We had a choice of being taxed in UK or Spain. When did this change?


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## jojohn34 (Aug 19, 2013)

*re my last post*

Hi guys thanks for the help..

If I actually made £12,000 say just to work out tax in Spain in the UK after my allowance I would only have £2000 taxable in the UK

So on that scenario what would the tax if any be in Spain... also I have been trying to move down to Spain off and on for two years, but get put off by all the stuff I read about tax.

If like I said I moved over and after 183 days I was now a resident, and my income came from the UK only, I'm aware of the Spanish tax bit.

What I want to get my head around Is this, do I still have to do VAT in Spain, because I don't pay any in the UK, so cant see why I should have to in Spain seeing my earnings will be coming from the UK.

I have no problem telling the Spanish tax man my worldwide income, but need to know for sure, even though I would be paying my taxes in the UK, will I have to fill in paper work every 12 weeks regarding that income, and also do VAT on money I don't even earn every 12 weeks, because I don't see how that can be right.

So could someone tell me please the following, lets say I've been in Spain for over 183 days, Ive made say £300 a week in the UK, The tax man in UK wont want my paperwork until end of year like always, and I will file online like always.

I would have kept my wife and my own nat insurance up in the UK

So then what, is there a 12 week account to do in Spain, is there really VAT to be filed even though I get my income from the UK, I just need to know how much mucking about with forms I will have to do, and how often.

Its daunting enough the move, but we been coming down for years, and really want to live there, we don't have a house to sell, and we will be renting reasonable accommodation already sourced by my daughter who lives there.

Im not worried about eating out , nor smoke nor drink, and will be using public transport, its just the form filling I need to know about in my own situation already stated, I thank you all for your help.


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## lockwood (Aug 20, 2013)

Some good advice in here.


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## jojohn34 (Aug 19, 2013)

*Re good advice here*



lockwood said:


> Some good advice in here.


Good advice where ?? all I see is the words good advice here and a advert for something

regards and best wishes


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## xabiaxica (Jun 23, 2009)

jojohn34 said:


> Good advice where ?? all I see is the words good advice here and a advert for something
> 
> regards and best wishes


advert??

I can't see an advert??


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## jojohn34 (Aug 19, 2013)

*re last*

in your last there was just what you wrote and a box advert, I am just saying what were you telling me because there was nothing else, I really wish to get replies to my questions very best regards


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## Pesky Wesky (May 10, 2009)

jojohn34 said:


> Good advice where ?? all I see is the words good advice here and a advert for something
> 
> regards and best wishes


I _think_ when lockwood says "good advice here," s/he means in the thread.
If you are logged in you shouldn't be getting ads in posts.
You have quite a few answers to your questions.

PS more info about being self employed (autonomo) and tax issues can be found on this site, 
http://www.advoco.es/advice.html
by contacting FCO living abroad, or the tax authorites in the UK


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## thrax (Nov 13, 2008)

Many people in Spain, including the Spanish, get confused by the tax situation. Many people turn to accountants to sort it out and they get it wrong too. This is partly because the laws re tax keep changing particularly when there is a change of government. If you become a tax resident in Spain then you should inform the Inland Revenue of the situation and they will no longer expect you to pay taxes in UK. Any taxes you do pay on income in UK cannot be taxed again, in full, in Spain. If taxes are higher here (or lower) depending on your circumstances, you may be required to pay a bit more or even get a refund (unlikely these days). Best advice would be to find a reliable accountant for the best and most up to date advice. Not easy to find though.


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## zenkarma (Feb 15, 2013)

jojohn34 said:


> So on that scenario what would the tax if any be in Spain...


If you earnt £12,000 in the UK you would take away your personal allowance (say £10,000) and pay tax on the remaining £2,000 at whatever the current basic rate of tax is. Let's assume basic rate of tax is 20%. So, £2,000 at 20% would be £400. That's what you would pay to HMRC.

In Spain your personal allowance would be €5,000. So £12,000 x 1.16 (or whatever the current rate of exchange is) = €13,920. You take away your personal allowance of €5,000 = €8,920 and you would be taxed at the Spanish basic rate of tax which is currently 24.75%. So €8,920 x 24.75% = €2,207.

However, HMRC and the Spanish Hacienda have a tax treaty, which means you won't pay the same tax twice. So you minus what you've paid to HMRC which was £400 (€464) from the Spanish tax liability of €2,207 which = €1,743 payable to the Spanish Hacienda as your tax liability.

All the usual caveats apply. I've used assumed figures which may or may not be correct in your personal circumstances. You may be entitled to other allowances you can offset against your Spanish tax liabilities, you'd need to look up what they might be.

You have the basic formula for working out what your Spanish tax liabilities might be, you just have to find out and plug in the correct figures.

If you're not paying VAT in the UK, you won't be liable for IVA in Spain as far as I'm aware.


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## zenkarma (Feb 15, 2013)

I just wanted to add to the above post that this is why it's so important for people to understand the implications of becoming a fiscal tax resident in Spain. As you can see from the above example, even on a modest income of £12,000, the tax liability in Spain is just under 4 times the tax liability that it is in the UK. This is caused principally by the lower personal allowance and the higher amount of euros compared to GBP.

Becoming a Spanish fiscal tax resident is not something that should be entered into lightly without fully understanding all the financial implications.

By far the best bet for most people in my opinion is stay out of reach of the Spanish Hacienda by simply not becoming a resident by not residing there longer than 183 days in any year.

Short term rentals are in good supply and reasonably priced. It makes far more sense in my opinion to simply rent for up to 6 months at a time, or 2 three month blocks is even better meaning you wouldn't even have to register at the town hall as a temporary resident.

The less Spanish bureaucracy you get involved in, the better, simpler, less stressful and more peaceful it will be for you.


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