# Salary paid in the UK but wanting to live in Spain



## Vlad88 (10 mo ago)

Dear community, I have received conflicting information so would appreciate advice from experience or backed up by official policies/law. 
The circumstances are:

My company supports me in moving to Spain but they don't have an office there. As long as I work with them on the existing UK contract, they have no problem.
My only source of income is my salary.
I'm a Romanian EU citizen.
I've got a permanent settled status in the UK.
There's a double tax agreement between UK and ES that prevents paying taxes twice for the same benefit or profits.
*ASK*: What is the correct process from a legal standpoint to report/balance all taxes between Spain and UK? 

Thank you,
Vlad


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## Overandout (Nov 10, 2012)

I can't provide you with the links to the laws and plicies as you request but when my wife looked into this the issues were quite simple:

1. As a tax resident of Spain you can have a "0" tax code in the UK so no PAYE would be deducted.
2. You would declare your income in Spain "manually" in the annual "declaración de la renta" and therefore pay it in one go in arrears.
3. Your NI contributions would still have to be made by your UK employer and your part deducted from your salary.
4. You will not be contributing to the Spanish Social Security.
5. Your employer may be deemed to have a Permanent Establishment in Spain by the Spanish tax authorities and could be liable for Corporation Tax unless they follow very strict rules.

As far as other issues go, I know very little about UK immigration, but under your permanent settled status, if you cease to be a UK resident, will you still be entitled to work for a UK company?


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## Vlad88 (10 mo ago)

Overandout said:


> I can't provide you with the links to the laws and plicies as you request but when my wife looked into this the issues were quite simple:
> 
> 1. As a tax resident of Spain you can have a "0" tax code in the UK so no PAYE would be deducted.
> 2. You would declare your income in Spain "manually" in the annual "declaración de la renta" and therefore pay it in one go in arrears.
> ...


Thank you so much for all these details! 

Found out that the company does have a Spanish entity and they won't relocate UK contracts but they pay all their dues in Spain and UK.
You retain your uk permanent status unless you are out of the UK for 5 consecutive years which gives me plenty of time to do this trial run.
(Invented numbers for the sake of me understanding) If we take 1000 gbp as the gross salary, my company will retain the UK NI contribution, 250 gbp and the rest of the income I'll report it to Spanish government and pay the additional NI in Spain?
Thank you!


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## snikpoh (Nov 19, 2007)

Vlad88 said:


> Thank you so much for all these details!
> 
> Found out that the company does have a Spanish entity and they won't relocate UK contracts but they pay all their dues in Spain and UK.
> You retain your uk permanent status unless you are out of the UK for 5 consecutive years which gives me plenty of time to do this trial run.
> ...


Never heard of this 5 year rule - are you sure?

How would you make Spanish SS (NI) payments - I live here and tried to make SS payments and couldn't


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## xabiaxica (Jun 23, 2009)

Vlad88 said:


> Thank you so much for all these details!
> 
> Found out that the company does have a Spanish entity and they won't relocate UK contracts but they pay all their dues in Spain and UK.
> You retain your uk permanent status unless you are out of the UK for 5 consecutive years which gives me plenty of time to do this trial run.
> ...


I would definitely check this again. According to the UK govt, if someone with ILR (same as PR) status leaves for more than 2 years they can apply for a Returning Resident visa. Success isn't guaranteed.








Return to the UK if you had indefinite leave to remain


How to come back to the UK to live if you were previously settled (given indefinite leave to remain) - find out if you need a Returning Resident visa




www.gov.uk




.


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## Overandout (Nov 10, 2012)

snikpoh said:


> Never heard of this 5 year rule - are you sure?
> 
> How would you make Spanish SS (NI) payments - I live here and tried to make SS payments and couldn't


 Yes, in another similar thread I made a comment that it may be possible to make voluntary SS payments in Spain, but I believe that this is not the case unless you are resident elsewhere. Whilst resident here you cannot.

My wife did make voluntary contributions to the Spanish SS but whilst living abroad.

The OP would have to arrange for pension and health cover privately.


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## Overandout (Nov 10, 2012)

xabiaxica said:


> I would definitely check this again. According to the UK govt, if someone with ILR (same as PR) status leaves for more than 2 years they can apply for a Returning Resident visa. Success isn't guaranteed.
> 
> 
> 
> ...


But the more pressing issue for the OP may not be the right to return, it would be the right to continue being employed under a UK contract of employment surely? 

Effectively there is s need for a "work permit" or equivalent in both places. UK and Spain.


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## xabiaxica (Jun 23, 2009)

Overandout said:


> But the more pressing issue for the OP may not be the right to return, it would be the right to continue being employed under a UK contract of employment surely?
> 
> Effectively there is s need for a "work permit" or equivalent in both places. UK and Spain.


Yes, there's definitely a need for a work visa in Spain if the OP is not an EU citizen, regardless of the geographical situation of the employer. 

I hadn't thought about the the continuing requirement of right to work for a UK based company if no longer living there, & thereby effectively giving up the visa status. Good point!


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## Overandout (Nov 10, 2012)

Vlad88 said:


> Found out that the company does have a Spanish entity and they won't relocate UK contracts but they pay all their dues in Spain and UK


I obviously don't know the corporate structure of your employer, but I am assuming that you are an employee of the UK legal entity. The existence of a Spanish entity in the same group is irrelevant if your presence in Spain creates a PE of the UK entity. That would simply make them liable to corporate taxation in two entities in the same country.

For that reason it is strange that the company wouldn't use the Spanish entity to take on your employment contract, but well, they probably know more about this than I do!


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## kaipa (Aug 3, 2013)

As UK nationals with EU residency acquired prior to Brexit have a 5 year period of absence I assume the OP has the same if the the settled residence was acquired before Brexit. So they can be absent from UK for up to 5 years and on return retain all rights.


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## Joppa (Sep 7, 2009)

xabiaxica said:


> I would definitely check this again. According to the UK govt, if someone with ILR (same as PR) status leaves for more than 2 years they can apply for a Returning Resident visa. Success isn't guaranteed.
> 
> 
> 
> ...


2 years' absence from UK can cancel your ILR status, unless you apply under compassionate or exceptional grounds. But those who get settled status under the EU Settlement Scheme can stay away up to 5 years, as it's the case for UK nationals in EU with permanent residency under the WA. Those EU and Swiss citizens who have already qualified for ILR under the UK immigration law can apply for settled status under the EU Settlement Scheme which gives them up to 5 years' absence (4 years for Swiss citizens).
Apply to the EU Settlement Scheme (settled and pre-settled status): If you have permanent residence or indefinite leave to remain - GOV.UK (www.gov.uk)


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## MataMata (Nov 30, 2008)

kaipa said:


> As UK nationals with EU residency acquired prior to Brexit have a 5 year period of absence


But would that work if you only had a tatty old residencia as opposed to a WA TIE?

That's where the 5 year absence rule comes from, prior to that it was 2 years.


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## kaipa (Aug 3, 2013)

MataMata said:


> But would that work if you only had a tatty old residencia as opposed to a WA TIE?
> 
> That's where the 5 year absence rule comes from, prior to that it was 2 years.


Technically that shouldnt matter as it would be checked on the data base if it was needed. Unless you actually deregistered I dont think anyone would notice as Hacienda is not linked with immigration. If you were absent for say 3 years then Hacienda would question your lack of tax returns and you would simply provide evidence of residence in uk
If you did deregister then when you returned and registered again that is where you would use the 5 year rule and not need a visa. 
Having said that I have recently changed my first TIE for one that is now permanent and there was no problem and it is probably worth doing as the Spanish seem to be more inclined to accept that for so many things- especially official stuff and passport control.


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## Vlad88 (10 mo ago)

Dear all, thank you for all the advice. It seems that the only way to do it is to work with the UK company as an autonomo/self employed in Spain and get an accountant to help with the taxes once a quarter.

The other option is to commute back and forth to Spain from the UK but not go over for more than 183 days so you're not considered a tax resident in Spain. This carries considerable costs, paying 2 rents and the flights, airport transport, car insurance and road tax in both.

The 3rd option is to get a contract with the Spanish entity or find another company in Spain.

In any case, it's a big impact decision. I wish that Brexit didn't happened and that in the future there'd be a way to pay taxes in one place and just live anywhere in the EU without needing tax attorneys and these country specific bureaucracy. 

Wishing everyone sunny days!


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