Spain digital nomad visa

[jamesbrown]

The marginal rate comes out at 26.5% but the effective rate on, say £100k profits, would be 22.75% according to one source I read on the topic. £75k profits would be 21.5% effective rate. The first £50k is at 19%.

However that was published before the various reversals and changes of chancellor.

Yes, sure. There are various explanations online, here is one from a poster here (or ex poster):

https://www.whitefieldtax.co.uk/help...n-tax-changes/

[jamesbrown]

I just can't let it lie! Each passing day gets closer to the 25% CT and all I can see is that smug f***er Sunak with his hand out!

It's fecking annoying but, aside from maxing out your company pension contribution, there isn't much you can do. As I said, it's quite a bit worse than 25% for profits between £50k and £250k, it just averages out to 25% when you hit £250k in profit. It may be tempting to move overseas, but when you think about it properly, there's way too much involved to justify it for reducing tax alone. If it's your long-term goal, by all means do it, and consider the reduced tax a bonus, but your life needs to move over there.

[eek]

The marginal rate comes out at 26.5% but the effective rate on, say £100k profits, would be 22.75% according to one source I read on the topic. £75k profits would be 21.5% effective rate. The first £50k is at 19%.

However that was published before the various reversals and changes of chancellor.

It's back to where we were before Truss arrived but I think some of the allowances may have quietly disappeared at the same time (not that we would care about the allowances that have gone).

[ladymuck]

Bear in mind that the marginal tax rate between £50k and £250k is 26.5%. In other words, small businesses with profits above £50k (i.e., pretty much all professional services contractors) are hammered.

The marginal rate comes out at 26.5% but the effective rate on, say £100k profits, would be 22.75% according to one source I read on the topic. £75k profits would be 21.5% effective rate. The first £50k is at 19%.

However that was published before the various reversals and changes of chancellor.

[sadkingbilly]

I just can't let it lie! Each passing day gets closer to the 25% CT and all I can see is that smug f***er Sunak with his hand out!

Take a lower paying job then? give up contracting.

[eek]

Bear in mind that the marginal tax rate between £50k and £250k is 26.5%. In other words, small businesses with profits above £50k (i.e., pretty much all professional services contractors) are hammered.

As I said to someone earlier today - currently an inside IR35 contract paying more than the outside IR35 market rate isn't a bad position to be in.

[oliverson]

Sure you can. It's actually quite hard to lose your UK tax residency under the SRT. If you want to move to Spain, you're going to have to move to Spain properly. Very few or no UK ties at all. I thought you'd come to the same conclusion earlier? Anyway, I think you were right first time... it's not impossible, but retaining your UK company or any other major ties to the UK won't really work.

I just can't let it lie! Each passing day gets closer to the 25% CT and all I can see is that smug f***er Sunak with his hand out!

[jamesbrown]

I guess your Ltd Co has zero outgoings and so is pretty much 100% profit? Based on a 220 day working year, you're on north of £1100 a day? Nice.

Bear in mind that the marginal tax rate between £50k and £250k is 26.5%. In other words, small businesses with profits above £50k (i.e., pretty much all professional services contractors) are hammered.

[jamesbrown]

I've mailed my accountant for some advice, but the way I see it, if I'm tax resident in Spain, i.e. spend 183+ days over there, then I can't be tax resident here in the UK also.

Sure you can. It's actually quite hard to lose your UK tax residency under the SRT. If you want to move to Spain, you're going to have to move to Spain properly. Very few or no UK ties at all. I thought you'd come to the same conclusion earlier? Anyway, I think you were right first time... it's not impossible, but retaining your UK company or any other major ties to the UK won't really work.

[ladymuck]

So, back to the digital nomad visa.

I just can't stop thinking about this, already having a second home in Spain, and with the 25% Corp. Tax on the horizon.

I've mailed my accountant for some advice, but the way I see it, if I'm tax resident in Spain, i.e. spend 183+ days over there, then I can't be tax resident here in the UK also. That would mean I could spend 182 days in the UK, doing some of the work here. This flips my current 'modus operandi' of being UK resident but spending several months a year in Spain, working out of there, on it's head.

The fly in the ointment is going to be the driving licence. My understanding is that a UK licence is no longer valid 6 months from date of residency. But say I swapped my UK licence for a Spanish one, what then? According to the the Gov.uk site, the Spanish licence is valid for the UK, seeing as technically I passed the swapped licence here in the UK.

Other concerns would be the Tesla. I really don't want to cancel the lease so I'd have to try come to some agreement with the leasing company.

Plenty of obstacles to overcome then, but if I can do that, I get to enjoy NOT paying 25% Corp. Tax to a government that turned it's back on me in a pandemic, ruined my industry with IR35, ruined my country. Cherry on cake, the right to roam the EU again without the 90/180 day rule.

I guess your Ltd Co has zero outgoings and so is pretty much 100% profit? Based on a 220 day working year, you're on north of £1100 a day? Nice.