European freelancing question

[bonpartit]

Hello,

The situation is the following, I am a Spanish freelancer having a contract in the UK, using my own Spanish "one person company" (not limited company as in the UK). My social security is paid in Spain, and I bill monthly to my UK customer, no VAT applied, I am paid to a UK bank account number.
The fiscal year in Spain is from the 1st of Jan to the 31st of December, but in the UK it's from April to April.
My current contract in the UK started mid-January and will end in August, I will then possibly move back to Spain.
Using the 183 day rule I am not a resident of Spain in 2007, but neither the UK.
Am I liable to any UK tax? It is not clear to what country I should pay income taxes, if anyone.

Thanks and regards

[tim123]

Most countries (including the UK) operate a system for non tax-resident persons which taxes them on money earnt whilst a physically resident worker. The UK (alone) operates this on a remittance basis.

The UK also operates a 'self' assessment system which requires individuals to volunteer the required information to the tax authority, on pain of criminal charges (potentially resulting in a prison sentence) if they do not.

So, you are liable to tax in the UK on all moneys earnt during the period of residence in the UK, from whatever source, that are remitted to the UK (this includes money paid into a UK bank account). You are expected to calculate you own tax liability and pay the money to the IR voluntarily.

You may get Double Taxation relief on the money if it is also deemed to be taxable elsewhere, but you do not get the choice of which country gets 'first call', so getting this wrong could be expensive.

You are, of course, entitled to use the tax avoidance plan of forgetting to tell the revenue if you wish.

tim