# Income Tax Question - UK Moving To Spain



## Davina (Mar 23, 2011)

I've searched the forum for an answer and drawn a blank. I hope someone here can help!

I'm a web design student in London and I'm planning to move to Spain after I get my diploma in June. I've never been employed but have some savings and supportive parents.

I plan to set up a web design business in Spain.

I've been researched taxes and have met conflicting info, so I figured you guys could set me straight.

On the one hand, I've read that if I go to live and work in Spain as self-employed, then I have to let the UK gov know by sending off a form to Nottingham, letting them know I want to pay income taxes in Spain.

On the other hand, I've read that I don't do that. All I do is basically live and work in Spain and, after 183 days, I immediately become a tax resident and, thus, am obliged to pay Spanish taxes.

Can you tell me the right answer? Assuming either one is lol

Also the way I understand income tax in Spain (complicated!) is that you pay between May and June for the previous year. So, do I have to pay on the money I earn in those 183 days or do I pay after those 183 days? And, if I have to pay after, do I then pay the UK inland revenue the money I earned in those 183 days. And once I've done that I begin paying Spain on the 184th day and onwards.

Hope someone can help. I'm no good at this lol


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## JoCatalunya (Mar 16, 2011)

Whilst I am not too sure about when and where you pay taxes, I do know what our bank manager told us. If you are not resident you pay a higher tax bracket than one who is resident. 
As far as the 183 day thing, my hubby worked outside Spain and because he was here for only 182 days out of the year he didnt have to pay tax. 
Hope some of the other guys on here can tell you more.
Good luck.


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## Davina (Mar 23, 2011)

JoCatalunya said:


> Whilst I am not too sure about when and where you pay taxes, I do know what our bank manager told us. If you are not resident you pay a higher tax bracket than one who is resident.
> As far as the 183 day thing, my hubby worked outside Spain and because he was here for only 182 days out of the year he didnt have to pay tax.
> Hope some of the other guys on here can tell you more.
> Good luck.


Thanks for the reply!  I didn't know that about the higher taxes, so I appreciate the info (even if I don't like it lol)


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## jojo (Sep 20, 2007)

To be self employed in Spain, you have to pay autonomo, which is around 250€ a monthish??? As for income tax, I dont know. I'm paying it at an "emergency" rate at the moment because I havent filled out a tax form (apparently that should arrive may/june??) and then I may get a rebate. But I am employed, not self employed. There are one or two clever folk on here who I'm sure will help you out. But ultimately you'll probably need to employ the services of a Gestoria who will guide you through the maze of spanish taxation and rules!?

Jo xxx


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## JoCatalunya (Mar 16, 2011)

It might not be the same down south, things seem to be very different down there, but here in Catalunya it is the case. 
We also have to pay 30 euros a year to have a bank account, its the same for credit cards. Generally Spain is 30 years in the past to the rest of the world I have found, but saying that there are a few good points.


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## Davina (Mar 23, 2011)

jojo said:


> To be self employed in Spain, you have to pay autonomo, which is around 250€ a monthish??? As for income tax, I dont know. I'm paying it at an "emergency" rate at the moment because I havent filled out a tax form (apparently that should arrive may/june??) and then I may get a rebate. But I am employed, not self employed. There are one or two clever folk on here who I'm sure will help you out. But ultimately you'll probably need to employ the services of a Gestoria who will guide you through the maze of spanish taxation and rules!?
> 
> Jo xxx


Hi Jo and thanks - I had no idea about autonomo, so I'll count you as one of the clever ones too lol


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## Davina (Mar 23, 2011)

JoCatalunya said:


> It might not be the same down south, things seem to be very different down there, but here in Catalunya it is the case.
> We also have to pay 30 euros a year to have a bank account, its the same for credit cards. Generally Spain is 30 years in the past to the rest of the world I have found, but saying that there are a few good points.


The dark side of the moon would be better than London lol The tax situation in spain is pretty confusing and seems really expensive. Even so, I love Spain. Have been visiting every other year since I was 6. Thanks again for the info


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## JoCatalunya (Mar 16, 2011)

Davina said:


> The dark side of the moon would be better than London lol The tax situation in spain is pretty confusing and seems really expensive. Even so, I love Spain. Have been visiting every other year since I was 6. Thanks again for the info


Catalunya is the dark side of the moon.


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## jojo (Sep 20, 2007)

JoCatalunya said:


> Catalunya is the dark side of the moon.


You're not happy are you !!! 

You must start a new thread and tell us your story, pour it all out and maybe someone can - well at least sympathise, if not help?????

Jo xxx


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## dinnow (Feb 14, 2011)

Davina, 
If you have never worked then presumably you have never paid income tax and never filled in a self-assessment tax form in the UK. So you don't need to tell the UK authorities if you move to Spain at the end of your course.
When you arrive in Spain you will need to register as self-employed (_autonomo_). You will then be tax resident and pay taxes in Spain. You cannot do that without first obtaining your NIE (_numero de identification de extranjero _- your unique tax reference number). You should also apply for residency.
Once you are registered as _autonomo_, you are then obliged to register with the _Seguridad Social_ and to pay by direct debit social security payments each month. The minimum was just over €250 a month for the calendar year 2010 but I imagine that the 2011 rate will be a few euros higher. That payment entitles you to cover under the Spanish health service system. It also entitles you to unemployment (after working at least a year) and a state pension (once you reach 65).
As an autonomo, you are required to submit a quarterly VAT return (there are no small trader exemptions in Spain - you charge VAT at 18% on all your invoices) and bank the VAT due; and a tax return and bank the tax due. You are taxed at 20% of your invoiced income for the quarter net of any allowable expenses. You then complete an annual tax return for the calendar year which is due by June of the year following.
When you invoice another autonomo or a limited company, they will retain 15% of the invoice and pay it into the Tax Office on your behalf at the end of the year. You deduct these retentions from your quarterly tax returns.
Sound complicated?? It is. That's why everyone, at least initially, employs the services of an English speaking gestor or asesor. They do it for you. And their bill is tax-deductible! Simples!


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## Pesky Wesky (May 10, 2009)

JoCatalunya said:


> Catalunya is the dark side of the moon.


I agree with Jo. Out of your to date 30 posts, I bet 25 have said something negative about Spain, Catalonia or the Spanish way of doing things. From the stuff you put down to kill bugs, to the people at the town hall, including chips and the mosos.

Please tell us what has made you so unhappy with Spain, or what we can do to help you 'cos you sound sooooooooo unhappy. Otherwise your posts are going to give people an unfair, IMO, image of Spain


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## Davina (Mar 23, 2011)

dinnow said:


> Davina,
> If you have never worked then presumably you have never paid income tax and never filled in a self-assessment tax form in the UK. So you don't need to tell the UK authorities if you move to Spain at the end of your course.
> When you arrive in Spain you will need to register as self-employed (_autonomo_). You will then be tax resident and pay taxes in Spain. You cannot do that without first obtaining your NIE (_numero de identification de extranjero _- your unique tax reference number). You should also apply for residency.
> Once you are registered as _autonomo_, you are then obliged to register with the _Seguridad Social_ and to pay by direct debit social security payments each month. The minimum was just over €250 a month for the calendar year 2010 but I imagine that the 2011 rate will be a few euros higher. That payment entitles you to cover under the Spanish health service system. It also entitles you to unemployment (after working at least a year) and a state pension (once you reach 65).
> ...


Utterly fantastic reply - thank you so much! That's exactly what I was looking for - the ins and outs explained. I'll definitely be hiring a gestor, but at least now I have a better understanding and some form of gameplan for my accounts. Can't thank you enough!


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## baldilocks (Mar 7, 2010)

Pesky Wesky said:


> I agree with Jo. Out of your to date 30 posts, I bet 25 have said something negative about Spain, Catalonia or the Spanish way of doing things. From the stuff you put down to kill bugs, to the people at the town hall, including chips and the mosos.
> 
> Please tell us what has made you so unhappy with Spain, or what we can do to help you 'cos you sound sooooooooo unhappy. Otherwise your posts are going to give people an unfair, IMO, image of Spain


We recently went to Barcelona for a few days, visiting relatives. Can't say that I was impressed. Much prefer Andalucia and in fact when the relatives we visited were here (they have lived in and around Barca all their lives) they commented that they had been spoken to/greeted by more people here in three days than they had where they live in 20 years.

I though that it was a standard requirement to criticise the Ayuntamiento (or, in our case, the alcalde) in order to live like the Spanish!


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## Alcalaina (Aug 6, 2010)

Well Davina, I wish you the best of luck trying to start a web design business from scratch in a foreign country. Hope you've got some customers lined up! What market are you aiming at?


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## dinnow (Feb 14, 2011)

baldilocks said:


> We recently went to Barcelona for a few days, visiting relatives. Can't say that I was impressed. Much prefer Andalucia and in fact when the relatives we visited were here (they have lived in and around Barca all their lives) they commented that they had been spoken to/greeted by more people here in three days than they had where they live in 20 years.
> 
> I though that it was a standard requirement to criticise the Ayuntamiento (or, in our case, the alcalde) in order to live like the Spanish!


:focus::focus:

I'm still fairly new here but have been struck by the fact that there seem to be as many moderators as there are other posters. So is there any chance that one of them could move all this stuff about moaning about catalunya off to a thread called something like "moaning about catalunya"?
:focus::focus:


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