# Self employed in UK living in Spain



## mrdjp73 (Jan 18, 2015)

Hi,

I was wondering if anyone has any knowledge on whether it would be better to be self employed working in the UK and living in Spain than being PAYE? I'm just looking to try and make my tax a bit easier to sort out.

Regards

Danny


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## Chopera (Apr 22, 2013)

mrdjp73 said:


> Hi,
> 
> I was wondering if anyone has any knowledge on whether it would be better to be self employed working in the UK and living in Spain than being PAYE? I'm just looking to try and make my tax a bit easier to sort out.
> 
> ...


Others know more about this than me, but I suspect that if you are "self employed working in the UK and living in Spain" then Hacienda will consider you to be " self employed working in *Spain* and living in Spain"


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## Horlics (Sep 27, 2011)

Whatever you earn in the UK will have to be declared in the UK and Spain. You will probably be taxed to some extent in the UK but will not have to pay again in Spain.

Choose whichever is best for your circumstances without regard for where you'll be living and that will most likely be the best answer.




mrdjp73 said:


> Hi,
> 
> I was wondering if anyone has any knowledge on whether it would be better to be self employed working in the UK and living in Spain than being PAYE? I'm just looking to try and make my tax a bit easier to sort out.
> 
> ...


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## Horlics (Sep 27, 2011)

Depends. If he is working in Spain remotely for a UK company then they will view that as living in Spain working in Spain. But if he gets on a plane on a Sunday evening, works all week in the UK and arrives back on a plane on a Friday evening, then they won't consider him to be working in Spain.




Chopera said:


> Others know more about this than me, but I suspect that if you are "self employed working in the UK and living in Spain" then Hacienda will consider you to be " self employed working in *Spain* and living in Spain"


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## mrdjp73 (Jan 18, 2015)

Horlics said:


> Depends. If he is working in Spain remotely for a UK company then they will view that as living in Spain working in Spain. But if he gets on a plane on a Sunday evening, works all week in the UK and arrives back on a plane on a Friday evening, then they won't consider him to be working in Spain.


Hi,

I work offshore in the north sea in the UK sector on a 2 on 2 off rotation. Although taking into account crew change days, I'll be in the UK more than Spain. My wife and 3 kids will be based in Spain and I will commute to and from.
I just wondered if being self employed was easier to deal with than PAYE.

Regards

Danny


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## Chopera (Apr 22, 2013)

mrdjp73 said:


> Hi,
> 
> I work offshore in the north sea in the UK sector on a 2 on 2 off rotation. Although taking into account crew change days, I'll be in the UK more than Spain. My wife and 3 kids will be based in Spain and I will commute to and from.
> I just wondered if being self employed was easier to deal with than PAYE.
> ...


Do you mean being registered self employed in the UK or in Spain? 

(not that I'll be able to help you much but I'm interested in finding out as well)


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## Horlics (Sep 27, 2011)

In my experience PAYE is always easier to deal with than self employed.

However, being self employed does introduce flexibility. If you are in a position to do some work for more than one employer then you can lower you tax bill overall. If, however, all income will be from one employer, then PAYE is the way to go if it's ease you're after.




mrdjp73 said:


> Hi,
> 
> I work offshore in the north sea in the UK sector on a 2 on 2 off rotation. Although taking into account crew change days, I'll be in the UK more than Spain. My wife and 3 kids will be based in Spain and I will commute to and from.
> I just wondered if being self employed was easier to deal with than PAYE.
> ...


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## Horlics (Sep 27, 2011)

But you don't 'register' self employed. You do a tax return in which you can declare income from self employment, but on the very same form you can also declare income from fully employed PAYE sources.



Chopera said:


> Do you mean being registered self employed in the UK or in Spain?
> 
> (not that I'll be able to help you much but I'm interested in finding out as well)


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## alborino (Dec 13, 2014)

Horlics said:


> But you don't 'register' self employed. You do a tax return in which you can declare income from self employment, but on the very same form you can also declare income from fully employed PAYE sources.


There is the issue of where you are accumulating state pension (are you going to pay NI in the UK). And if you can be UK tax based you can use various tax efficient vehicles.


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## Chopera (Apr 22, 2013)

Horlics said:


> But you don't 'register' self employed. You do a tax return in which you can declare income from self employment, but on the very same form you can also declare income from fully employed PAYE sources.


If he is to come off PAYE then doesn't he need to let the tax authorities know? (as well as his employer)


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## alborino (Dec 13, 2014)

mrdjp73 said:


> Hi,
> 
> I was wondering if anyone has any knowledge on whether it would be better to be self employed working in the UK and living in Spain than being PAYE? I'm just looking to try and make my tax a bit easier to sort out.
> 
> ...


Just a thought and a long shot. 

Suppose you have a UK limited company. Could you charge your employers via that? Then you and your wife could be Spanish Autonomo in Spain and get paid by the company. And/or receive dividends.

There are overheads, and you'd need to cover VAT admin, but that can be made simple. Obviously your company would have no value and could be non profit making so no tax issue there.

Depends if your employers would accept that although it may even be attractive to them.


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## snikpoh (Nov 19, 2007)

Actually, I think you've all missed the basic fact that his wife and family live here in Spain.

Because of this, his centre of interest is Spain, so he MUST be fiscally resident here and therefore be required to complete a tax return in Spain.



Or have I misread the situation?


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## mrdjp73 (Jan 18, 2015)

alborino said:


> Just a thought and a long shot.
> 
> Suppose you have a UK limited company. Could you charge your employers via that? Then you and your wife could be Spanish Autonomo in Spain and get paid by the company. And/or receive dividends.
> 
> ...


Working offshore, if you are not employed then you have a limited company and this is how a lot of people avoid paying 40% tax. They charge the company full amount of money and pat themselves minimum wage and the rest comes out of dividends.
This could be the way forward and could be a better way of working the tax and not getting screwed for.
Thank you, this will be the next avenue to look down.
My current employer wouldn't be very keen on paying me this way but I'm sure something could be sorted out.
Thanks again 

Danny


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## mrdjp73 (Jan 18, 2015)

Thank you everyone for your comments, there is certainy food for thought here. 
I really would like to move to Spain with my family as I believe my kids would have a better way of life but just not keen on over complicating my tax.


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## mrdjp73 (Jan 18, 2015)

Chopera said:


> Do you mean being registered self employed in the UK or in Spain?
> 
> (not that I'll be able to help you much but I'm interested in finding out as well)


In the UK


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## mrdjp73 (Jan 18, 2015)

snikpoh said:


> Actually, I think you've all missed the basic fact that his wife and family live here in Spain.
> 
> Because of this, his centre of interest is Spain, so he MUST be fiscally resident here and therefore be required to complete a tax return in Spain.
> 
> Or have I misread the situation?


My family would be in Spain full time but I will be working in the UK.
If I was in the UK and owned a limited company I could pay myself a minimum wage so as to avoid paying 40% tax. Anything else comes out as expenses or dividends.
Could I not do the same in Spain, I would earn in UK but pay myself a low wage in Spain?


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## snikpoh (Nov 19, 2007)

mrdjp73 said:


> My family would be in Spain full time but I will be working in the UK.
> If I was in the UK and owned a limited company I could pay myself a minimum wage so as to avoid paying 40% tax. Anything else comes out as expenses or dividends.
> Could I not do the same in Spain, I would earn in UK but pay myself a low wage in Spain?


You really need to talk to an accountant about this (one who understands offshore working and the Spanish tax system) as I seem to recall that it's more complicated than that. 

Remember that Spain taxes you on all world-wide income and I suspect divis and expenses come into that category.


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## Chopera (Apr 22, 2013)

snikpoh said:


> Actually, I think you've all missed the basic fact that his wife and family live here in Spain.
> 
> Because of this, his centre of interest is Spain, so he MUST be fiscally resident here and therefore be required to complete a tax return in Spain.
> 
> ...


This was one reason why I was asking where he intended to "register" as self employed. It's a grey area I think because he'll be spending over 6 months in the UK but his centre of interest will indeed be Spain, so I'm not sure how they'll decide on which country he is resident in. If they decide it is Spain then he might be better off becoming an autonomo (which would give his family access to Spanish social security, etc).


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## alborino (Dec 13, 2014)

snikpoh said:


> You really need to talk to an accountant about this (one who understands offshore working and the Spanish tax system)


Which is where we started. Spain has almost no one who understands anything related to this. And that is understandably as the authorities cannot answer simple questions, or interpret there own laws.

I have tried to talk to three accountant/lawyer organisations in Spain. One can't even acknowledge my communications, one suggested I looked in another area of Spain as there are expats there (even though I have no connection with that place and am subject to local tax laws in his location), and one is one week late in replying based on the date they offered despite me paying for the service. Of course I could try my Spanish lawyer who on first meeting with her suggested I break the law 

So it is in the hands of us individuals to protect ourselves. So we really need to discuss the options, come up with a plan, and then get a lawyer to validate it. 

But for sure it is all very frustrating. Welcome to Spain as they say


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## mrdjp73 (Jan 18, 2015)

alborino said:


> Which is where we started. Spain has almost no one who understands anything related to this. And that is understandably as the authorities cannot answer simple questions, or interpret there own laws.
> 
> I have tried to talk to three accountant/lawyer organisations in Spain. One can't even acknowledge my communications, one suggested I looked in another area of Spain as there are expats there (even though I have no connection with that place and am subject to local tax laws in his location), and one is one week late in replying based on the date they offered despite me paying for the service. Of course I could try my Spanish lawyer who on first meeting with her suggested I break the law
> 
> ...


What fun it will be living in Spain trying to pay tax. To be honest the HMRC are a nightmare as well


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## director1 (Dec 28, 2013)

alborino said:


> Which is where we started. Spain has almost no one who understands anything related to this. And that is understandably as the authorities cannot answer simple questions, or interpret there own laws.
> 
> I have tried to talk to three accountant/lawyer organisations in Spain. One can't even acknowledge my communications, one suggested I looked in another area of Spain as there are expats there (even though I have no connection with that place and am subject to local tax laws in his location), and one is one week late in replying based on the date they offered despite me paying for the service. Of course I could try my Spanish lawyer who on first meeting with her suggested I break the law
> 
> ...


Really interesting to read your case, but really sorry to hear about your frustration and problems. Though our situations are very different, there are some interesting similarities regarding what they say about how slow the Spanish seem to be to cotton on to new forms of labour and work arrangements: http://www.expatforum.com/expats/sp...cia-non-traditional-employment-situation.html.

Please do let me know if you find anything out –*and especially if you find a good accountant in Spain. I'd want to speak to them as well I think about my financial situation (once I am finally allowed to be legally resident).

Cheers,
Dir


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