# Working for a UK company but living in Spain



## sc0tt

Hi there,

There seems to be a wealth of information on this forum but I was wondering if anyone in the same position as myself might be able to help with a question of tax. Sorry, I kow its dull!

I work as a consultant and my work tends to be overseas for a few weeks at a time and working from home the rest of the time. I'm employed by a UK company. I'm considering moving to Spain and staying in my current job. My employer is fine with this and I'd remain a UK employee. Does anyone else have a similar job.. i.e. working for a UK company, commuting abroad for work, working from home (spain) the rest of the time? I'd be interested to know of any tax implications either in the UK or Spain? I realise I'll need to talk to accountants but any pointers in what to expect / ask would be much appreciated.

Thanks

Scott


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## Pip84

*livng in Spain and working elsewhere*



sc0tt said:


> Hi there,
> 
> There seems to be a wealth of information on this forum but I was wondering if anyone in the same position as myself might be able to help with a question of tax. Sorry, I kow its dull!
> 
> I work as a consultant and my work tends to be overseas for a few weeks at a time and working from home the rest of the time. I'm employed by a UK company. I'm considering moving to Spain and staying in my current job. My employer is fine with this and I'd remain a UK employee. Does anyone else have a similar job.. i.e. working for a UK company, commuting abroad for work, working from home (spain) the rest of the time? I'd be interested to know of any tax implications either in the UK or Spain? I realise I'll need to talk to accountants but any pointers in what to expect / ask would be much appreciated.
> 
> Thanks
> 
> Scott


Hi there,

You've hit the nail squarely on the head, SEE AN ACCOUNTANT! Make sure it's a reputable one with experience in these matters too, we use Price Waterhouse Cooper (PWC) in the UK. This could be a very complicated scenario. I do not know anything about Spanish tax however I would think this scenario will all rest on where your 'formal residence' is. If you formally settle in Spain I would suggest you will need to pay Spanish tax of some description, even if you have paid UK tax first. As it's EU I doubt you will pay twice but for example if Spanish tax was 45% for high earners (no idea if it is) and UK was still 40% then you would probably be liable for a further 5% in Spain. One of my wife's colleagues lives in Spain and works in Gibraltar and I seem to recall this is a similar scenario for him.

It's really not worth guessing on stuff like this (which I know I have just done!) and also you need to get it right first time because you would not want to get embedded in Spanish bureaucracy, which is tiresome at best, but can be negotiated if you know the ropes or with proper help. Good luck and enjoy Spain when you get here.


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## jojo

I'm hazy on this whole taxation issue, but I do know that you should pay tax to the country where you spend more time in. There is a 183 day (half a year) cut off point. My OH works in the UK and pays his taxes, NI there. However he has to make sure that he spends at least 183 days a year there - sadly!

My co mod on here, Strav is very knowledgeable on the tax subject!!!???

jo xxx


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## lynn

Are you working for your own UK company? In which case, you want to be very careful about 'working from home' in Spain as they will chase you for company tax. 
As others have said, get professional advice in writing before you do anything


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## sc0tt

Thanks for the pointers - I'm employed by a UK Ltd company rather than for myself. I intend to spend more time in Spain than the UK and was hoping someone was in the same situation - I'm sure I saw a thread on it somewhere but can't find it for the life of me. Regardless, as Pip84 says I really do need to see an accountant as everyone's situation is slightly different. If I can see one recurring theme on this forum, Spanish bureaucracy isn't for the faint-hearted... I guess the bigger firms will have a better knowledge of both UK and Spanish tax and offer a one-stop-shop rather than going to Spanish accountant with a little UK knowledge and then going to a UK accountant with a little Spanish knowledge. 

Crikey... reading this back, I'm boring MYSELF now. 

I'll post an update once I've made a decision and talked to someone.

Thanks


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## xicoalc

sc0tt said:


> Thanks for the pointers - I'm employed by a UK Ltd company rather than for myself. I intend to spend more time in Spain than the UK and was hoping someone was in the same situation - I'm sure I saw a thread on it somewhere but can't find it for the life of me. Regardless, as Pip84 says I really do need to see an accountant as everyone's situation is slightly different. If I can see one recurring theme on this forum, Spanish bureaucracy isn't for the faint-hearted... I guess the bigger firms will have a better knowledge of both UK and Spanish tax and offer a one-stop-shop rather than going to Spanish accountant with a little UK knowledge and then going to a UK accountant with a little Spanish knowledge.
> 
> Crikey... reading this back, I'm boring MYSELF now.
> 
> I'll post an update once I've made a decision and talked to someone.
> 
> Thanks


Deffo get advice. If you are RESIDENT in spain, (which you have to be if you are here for 1 day more than 6 monts a year) then I believe you will still have to file a tax return in Spain. You wont be liable for dual tax BUT may have to pay the difference if it would be more in spain.

Are you a director of the Ltd company or a shareholder, or merely an employee? If you receive any kind of tax free dividends these MAY be taxable in Spain. Get a good accountant in both countries to advise on YOUR PERSONAL circumstances - no forum can be 100% accurate on these issues as they all vary depending on your circumstance etc

Oh and whatever you are told - dont be surprised if it doesn change soon after you find out all you want to know!!!

Good luck!


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## Stravinsky

sc0tt said:


> Thanks for the pointers - I'm employed by a UK Ltd company rather than for myself. I intend to spend more time in Spain than the UK and was hoping someone was in the same situation - I'm sure I saw a thread on it somewhere but can't find it for the life of me. Regardless, as Pip84 says I really do need to see an accountant as everyone's situation is slightly different. If I can see one recurring theme on this forum, Spanish bureaucracy isn't for the faint-hearted... I guess the bigger firms will have a better knowledge of both UK and Spanish tax and offer a one-stop-shop rather than going to Spanish accountant with a little UK knowledge and then going to a UK accountant with a little Spanish knowledge.
> 
> Crikey... reading this back, I'm boring MYSELF now.
> 
> I'll post an update once I've made a decision and talked to someone.
> 
> Thanks


It can be a little complicated Scott. In general though, if you are living in Spain then your tax residency will become Spain, usually after 180 days. That means you have to make a tax return.

However a UK tax accountant will probably tell you not to worry because there is a dual tax agreement between the countries.

The bottom line ios that if you carry on paying your tax in the UK, you may still be liable to tax in Spain if you are tax resident here. You wont pay tax twice, but the difference between the taxes may be payable, as Spains taxes are normally slightly higher than the UK.

Get yourself an accountant who KNOWS about Spanish tax issues, because its the Spanish tax man and his laws you will have to deal with eventually whilst your UK accountant is sitting there back in England.


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## xicoalc

Stravinsky said:


> It can be a little complicated Scott. In general though, if you are living in Spain then your tax residency will become Spain, usually after 180 days. That means you have to make a tax return.
> 
> However a UK tax accountant will probably tell you not to worry because there is a dual tax agreement between the countries.
> 
> The bottom line ios that if you carry on paying your tax in the UK, you may still be liable to tax in Spain if you are tax resident here. You wont pay tax twice, but the difference between the taxes may be payable, as Spains taxes are normally slightly higher than the UK.
> 
> Get yourself an accountant who KNOWS about Spanish tax issues, because its the Spanish tax man and his laws you will have to deal with eventually whilst your UK accountant is sitting there back in England.


Absolutely.... more to the point, get yourself a Spanish one when you are here who knows about UK taxes. When I first came out I was a director of a UK Ltd Co as well as self employed in the UK and in Spain. My Asesoria here got details of all my UK taxes paid and did the relevant calculations and if I recall I did have to pay a difference!


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## Stravinsky

steve_in_spain said:


> Absolutely.... more to the point, get yourself a Spanish one when you are here who knows about UK taxes. When I first came out I was a director of a UK Ltd Co as well as self employed in the UK and in Spain. My Asesoria here got details of all my UK taxes paid and did the relevant calculations and if I recall I did have to pay a difference!


Yep, I'm a UK company director, but I believe in constructive accounting


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## DROOBY

Alright Guys,

Been away for a while on a european tour so just catching up with the goss.
I'm in a similar boat to Scott as some of you know and its still on going. I've now contacted 6 different "specialists" and got six different answers so no further forward really. Most seem to think i'd be better listed as self-employed in the Uk and paying tax there while submiting another tax reurn here. I'm basically wanting the least paperwork option and obviously the most cost/tax saving one.
If anyone can recommend a good accountant i'm open to suggestions!

Cheers All
D


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## Brrrian

*180 / 183 day rule mainly irrelevant*

There are various guidelines the tax authorities in each country will use to help determine whether it is worthwhile them trying to classify you resident for tax. Number of days spent in a country is one of those, but it is just a guideline.

An aggressive tax inspector could try to make a case that you are tax resident, regardless of how may days you send in their country. But if you are an EU citizen then you can usually be classed tax resident in the country of your choosing so long as you maintain a home there (rented or owned) and perform work there.

If a tax inspector from another country feels he has a claim on you then he can make a case and will consider a number of factors such as where he deems the work is performed, where you hold bank accounts, where your children go to school, where you own property etc etc. spending 185 days as opposed to 175 days in a country will not make any difference apart from being counted in some minor way amongst these other factors.

So there is room for grey areas and dispute but there is a "tiebreaker". WHere two countries are trying to claim you as a tax resident, the EU countries have signed up to the same deciding factor - you will be taxed by the country which you are a subject of.

Non EU citizens are going to face a different scenario as their govt may not have signed up to a similar agreement, but in most cases you will still only pay tax to one country due to tax treaties.


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## Stravinsky

Brrrian said:


> So there is room for grey areas and dispute but there is a "tiebreaker". WHere two countries are trying to claim you as a tax resident, the EU countries have signed up to the same deciding factor - you will be taxed by the country which you are a subject of.



Please tell .... what do you consider "a subject" then? I will always be a British subject, but I dont reside in Britain. I have income in the UK ... but both countries agree that I am a tax resident in Spain.

Many expats living in Spain have income from the UK, especially of course pensioners ...... according to UK and Spanish tax authorities as they are living in Spain then they pay their tax in their country of residence .... in this case Spain


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## Brrrian

if you hold a British passport you are a British subject.


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## mrypg9

Stravinsky said:


> Yep, I'm a UK company director, but I believe in constructive accounting


Now..what does that mean??
Nothing illegal, I hope.
Otherwise you'll get put in the same category as a taxi-driving Spanish resident claiming UK Incapacity Benefit....
I was a Company Director too....but I didn't do 'constructive accounting'.
Or since I don't know what that is, I may have done.
Unless it involved dishonesty which I'm sure it doesn't.
Off-tpoic to a slight degree....if you have the bulk of your assets in the UK or offshore and are married/Civil Partnered in the UK will there be problems if you pop yer clogs whilst resident in Spain, does anyone know?


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## mrypg9

Stravinsky said:


> Please tell .... what do you consider "a subject" then? I will always be a British subject, but I dont reside in Britain. I have income in the UK ... but both countries agree that I am a tax resident in Spain.
> 
> Many expats living in Spain have income from the UK, especially of course pensioners ...... according to UK and Spanish tax authorities as they are living in Spain then they pay their tax in their country of residence .... in this case Spain


But most pensions, particularly local government or Civil Service, are subject to DTOs, aren't they?


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## Stravinsky

mrypg9 said:


> But most pensions, particularly local government or Civil Service, are subject to DTOs, aren't they?


DTO's?


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## mrypg9

Stravinsky said:


> DTO's?


Dual-or is it Double? - Taxation Agreements 
or something beginning with 'O'.. We've discussed this before, you and I.
Many national/local government pension schemes will be taxed in the UK as a result of intragovernmental taxation agreements. I believe you said your wife has such a pension....
There are some private investment/pension schemes which are also subject to these rules and a good tax lawyer will advise of these.
Now_* that's*_ what I call being constructive!


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## Stravinsky

mrypg9 said:


> Dual-or is it Double? - Taxation Agreements
> or something beginning with 'O'.. We've discussed this before, you and I.
> Many national/local government pension schemes will be taxed in the UK as a result of intragovernmental taxation agreements. I believe you said your wife has such a pension....
> There are some private investment/pension schemes which are also subject to these rules and a good tax lawyer will advise of these.
> Now_* that's*_ what I call being constructive!


Yep, I'm still too young to have a pension yet though 
You have to have your government pension taxed in the UK, yet you can transfer your state pension taxation to Spain. So you take advantage of both tax allowances and may end up paying no tax at all.

However, in general any other income we have, UK or Spanish, is deemed to be taxable in Spain


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## mrypg9

Stravinsky said:


> Yep, I'm still too young to have a pension yet though
> 
> 
> Now where's that 'envy' and 'jealousy' icon??????
> 
> You have to have your government pension taxed in the UK, yet you can transfer your state pension taxation to Spain. So you take advantage of both tax allowances and may end up paying no tax at all.However, in general any other income we have, UK or Spanish, is deemed to be taxable in Spain




That sounds interesting. How would I go about that? We don't employ an accountant for these things anymore, just advisors for such dosh as we have invested.


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## Stravinsky

mrypg9 said:


> That sounds interesting. How would I go about that? We don't employ an accountant for these things anymore, just advisors for such dosh as we have invested.



You go to the local tax office in Spain and get the necessary tax certificates and (I think) form FD9 which you can download off the internet (One Spanish, one English). Those are then sent to HMRC in Nottingham and they approve zero taxation status in the UK. Obviously your government pension stays in the UK for tax, and takes advantage of the UK allowance. In Spain, your UK state pension is then to be declared in Spain, and you take into account your Spanish tax allowance. With purely a state pension that means you pay no tax here on it.


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## mrypg9

Stravinsky said:


> You go to the local tax office in Spain and get the necessary tax certificates and (I think) form FD9 which you can download off the internet (One Spanish, one English). Those are then sent to HMRC in Nottingham and they approve zero taxation status in the UK. Obviously your government pension stays in the UK for tax, and takes advantage of the UK allowance. In Spain, your UK state pension is then to be declared in Spain, and you take into account your Spanish tax allowance. With purely a state pension that means you pay no tax here on it.


Thankyou, that sounds VERY promising. I'll do that next week.
Fortunately you live too far away for me to send you the magnum of champagne you may deserve if this works out.
Now....if you can help about the Will issue....a jeroboam might be in order????


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## Stravinsky

mrypg9 said:


> Thankyou, that sounds VERY promising. I'll do that next week.
> Fortunately you live too far away for me to send you the magnum of champagne you may deserve if this works out.
> Now....if you can help about the Will issue....a jeroboam might be in order????


The will issue?
I've done mine, but not sure what the issue is that you have?

I may not be able to get online for the next few days as venturing into deepest wales, send me a pm if I can help and I'll look when I get back


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