Moving to Spain - keeping UK limited company - where and how do I pay taxes?

[dwei]

I have read loads of threads on this and other forums, but am still not clear on how to handle the following situation:

• I'll be moving to Spain in January 2022 and won't be needing a visa as I hold a European passport (but have been living in the UK for the past 30 years)
• I will continue to work for a client in London through an agency in London, using my UK limited company
• currently, my limited company invoices the agency, which pays the invoice and charges the end client
• I then do the usual - minimal salary and dividends
• I know the recommended thing to do is to set myself up as an autonomo in Spain and to invoice the agency or end client
• unfortunately, I can't do that - they will only pay me through my UK limited company, and only into a UK bank account, if that is not possible I will lose the client and the contract
• I have seen a few different approaches people take, the most recommended one seems to be to pay corporation tax in the UK and to pay myself dividends in Spain, where I'd set myself up as an autonomo without income, but still pay the social security over there to get health insurance
• I would then declare my dividend income when the time comes, and pay taxes on this in Spain
• I have also read that this may be illegal as the limited company may be considered by Spain to be situated/managed in Spain, so I would have to pay corporation tax over there
• I am not trying to avoid taxes, I just want to find out a legal way of keeping the client in the UK, have them pay me via my UK limited company, pay all the right taxes in all the right places and be set up in Spain in a way that gives me health insurance over there (can't go private, so need the state-provided social security)

Has anyone done something similar and knows with some degree of certainty what the legal way of doing this is?

[Lance]

will you be working in the UK or Spain? That is the crucial question I believe. Your information doesn't say.

[jamesbrown]

General rule is that you’ll pay tax on the work where the work is done (from day 1) and on your worldwide income where you’re resident and mitigate double taxation on the latter with a tax treaty (assuming one exists, and it does for Spain). Continuing to work through a UK company is probably not the best approach as you’ll most likely create a Permanent Establishment in Spain. Anyway, talk to Sue Abel-Beswick at optimum (formerly of I-Paye).

[dwei]

I will be living in working from Spain, but for a company in the UK.

[dwei]

General rule is that you’ll pay tax on the work where the work is done (from day 1) and on your worldwide income where you’re resident and mitigate double taxation on the latter with a tax treaty (assuming one exists, and it does for Spain). Continuing to work through a UK company is probably not the best approach as you’ll most likely create a Permanent Establishment in Spain. Anyway, talk to Sue Abel-Beswick at optimum (formerly of I-Paye).

I just googled her, Optimum seems to be a global payroll provider? Do they also give advice?

[dwei]

will you be working in the UK or Spain? That is the crucial question I believe. Your information doesn't say.

I will be living in and working from Spain, but for a UK company, with all other team members in the UK.

[northernladuk]

I just googled her, Optimum seems to be a global payroll provider? Do they also give advice?

Sue has been posting on here for years and gives invaluable advice in this area. Possibly the only person that has on here thinking about it.

She is called Sue B on here now so maybe try dropping her a private message?
https://forums.contractoruk.com/acco...umstances.html

[eek]

I will be living in and working from Spain, but for a UK company, with all other team members in the UK.

No you will be working for a UK company via a separate UK company while living in Spain.

This is going to be a world of pain for you as HMRC will be expecting your company to pay tax on the work they believe you are doing in the UK (remember you are invoicing a UK company via you UK company for time and material based work) while Spain is going to be expecting to receive tax for the work you are doing in Spain (which is the work your UK company is invoicing for).

You need specialist advice as this gets very, very complex, very very quickly and it may well be that an international payroll option is a better bet.

[jamesbrown]

I just googled her, Optimum seems to be a global payroll provider? Do they also give advice?

Yes, and she’s a member here.

[Sue B]

Thank you for the recommendations!

I would be happy to have a chat Dwei, drop me a DM and we can set something up.