# Living in U.K. but earning as Autonomo in Spain. Where to pay tax?



## ZoF22 (Apr 2, 2021)

I wonder if anyone can help, so many forums in relation to the opposite of what I’d like to know.

I currently live in the U.K. (U.K. resident) and that won’t change but as my job is selling property in Spain I want to register as autonomo and pay my taxes in spain instead of the U.K. (fee reasons for this being I eventually want to invest in spain and already paying my taxes here makes it more straight forward)

I suppose my question is, is this possible since I’m not living in spain, and would I end up having to also pay tax in the U.K. too?
Any help would be great,

thank you,


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## NickZ (Jun 26, 2009)

If you're working in Spain you'd pay Spanish tax on that work income. 

Are you allowed to work in Spain?

You'd still pay UK taxes on any other income.


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## ZoF22 (Apr 2, 2021)

Yes, or so my Spanish lawyer said it’s fine so long as I’m paying the social security.
I’ve since posting this checked with HMRC and it actually seems quite simple, if I’m paying tax on the Spanish income I can list this as foreign income on my U.K. self assessment and because there’s a double taxation treaty in place I shouldn’t be taxed by the U.K. for the income I’ve already paid tax on in Spain. Only time will tell whether it works out. I’ll pay tax on U.K. income as normal.

thanks for your reply


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## Bevdeforges (Nov 16, 2007)

The general rule of thumb on this stuff is sometimes referred to as the "butt rule." Basically, you pay your taxes to the country in which you are resident while doing whatever it is you do to earn your income. (I.e. wherever your butt is while you're working). If you are still resident in the UK and selling Spanish property from the UK, then you are "tax resident" in the UK and should be paying taxes there.

You will need to move to Spain to set up an autonomo and establish yourself as "tax resident" in Spain. Since Brexit has happened, chances are you will need a visa to move to Spain and allow you to work there - no matter what HMRC thinks about it. (And at that time, you need to notify HMRC that you are no longer resident in the UK so you'll be taken off the British tax rolls.)


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## ZoF22 (Apr 2, 2021)

You don’t have to live in Spain to be a tax resident, you can chose to be if you prefer. I used to live in spain for many years which is why I have the tie here. My accountant can set up autonomo etc by power of attorney via my lawyer. I already have nie etc from before. 

I just wanted to chose to pay taxes in spain as when I do decide to buy it will benefit be being a tax resident (better mortgage rates, lower down payment etc) I’m not planning on physically living there. It would be an investment. I also earn from the U.K. to which will continue so I’m thinking I’ll pay my iva and income taxes / autonomo (social security) fees in spain from Spanish income, delair this on my self assessment and hopefully not be double taxed by the U.K for what I’ve paid in spain. 

It’s probably quite complicated but I think would benefit in the long run.
Thanks again for your advice.


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## Bevdeforges (Nov 16, 2007)

Normally you don't get to choose which country you pay your taxes to. But perhaps your attorney is offering to set up a business entity that is "resident" in Spain, which might be workable. We've had a few folks through here in recent years who were "assured" by HRMC that various cross border tax situations were perfectly OK (usually when paying UK taxes on it all) only to find out that the local government's tax authority had a very different take on the situation. Be careful.


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## ZoF22 (Apr 2, 2021)

Yes this is my worry, I’m going to do more looking into it, if I end up paying double the tax I can’t imagine the headaches it’s going to cause to reclaim it back.

I might weigh it all up as thinking about it, it could work out 6 & 2 3s and less hassle to leave it as it is and pay all in U.K., as what I could gain in benefit from paying the income tax when I come to purchase, I’ll have probably paid the same amount if not more in social security anyway, plus tax rate bands are lower in spain too.
Thank you


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## xabiaxica (Jun 23, 2009)

ZoF22 said:


> Yes this is my worry, I’m going to do more looking into it, if I end up paying double the tax I can’t imagine the headaches it’s going to cause to reclaim it back.
> 
> I might weigh it all up as thinking about it, it could work out 6 & 2 3s and less hassle to leave it as it is and pay all in U.K., as what I could gain in benefit from paying the income tax when I come to purchase, I’ll have probably paid the same amount if not more in social security anyway, plus tax rate bands are lower in spain too.
> Thank you


What benefits have you heard of regarding being tax resident in Spain now, with regard to investing here later?


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## ZoF22 (Apr 2, 2021)

The main benefit is paying my taxes in spain as a tax resident would allow me to pay a 20% down payment rather than 40%, plus an interest rate of 1% instead of 2.8%.


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## NickZ (Jun 26, 2009)

1) You don't get to pick your tax residency. Your residency is determined by the tie breakers in the tax treaty. IF you're living in the UK you're VERY likely to be an UK tax resident

2) Employment income is almost always taxed in the country the work is performed. Tax residency doesn't come into play.

Tax residency applies to all the things covered under global income. 

Things like employment income or capital gains on real property are usually taxed not according to tax residence.


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## ZoF22 (Apr 2, 2021)

I understand that is almost always the case, but, in this case as my income work is from spain, I work remotely and can be physically based anywhere. Obviously I live in the U.K. I am a U.K. resident, I was born here and live here permanently and have always paid the tax in the U.K. with no problems at all. But since looking into which way is best for my future plans I’ve been advised that I can in fact choose to pay my taxes in spain and register as autonomo without actually living in spain which has lead me on this whole venture to find out if it’s the best way or not. Now I’m questioning whether I’ve been told incorrect advice or not but both my lawyer and financier have told me the exact same thing that it is possible. 

All advice appreciated, I think I’m more confused than I was at the start though 😂


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## ZoF22 (Apr 2, 2021)

Apparently if the “centre of your economic interest” is in spain whether or not you’re physically based in spain you seen as a tax resident and should be paying tax in spain as here









Understanding tax residence in Spain | Blevins Franks Advisers


Establishing where you are resident for tax purposes can be more complex than you think, and could prove very costly if you get it wrong.




www.blevinsfranks.com





The Spanish tax residence rules 

You are resident for tax purposes in Spain if any of the following apply:

1) You spend more than 183 days in Spain cumulatively in a calendar year, whether or not you are formally registered. Temporary or sporadic absences are ignored for the purpose of this rule unless you can prove you are habitually resident in another country for over 183 days.

2) Your “centre of economic interests” is in Spain– i.e. the base for your economic or professional activities is in Spain. If you earn more income or have more assets here than in any other single country, Spain will be deemed the centre of economic activity, 

3) Your “centre of vital interests” is in Spain – i.e. your spouse lives here and/or your dependent minor children. In this case you are presumed Spanish resident, even if you spend less than 183 days here, unless you can prove otherwise.


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