Non-Resident Self-Employed ??

[lazza]

Dear Forum

I have an issue that seems to baffle the people at HMRC and at the tax office. Basically I am currently resident in both Spain and UK- not sure where I will be spending most time over the next 3 years.

The thing is, that to be self-employed in Spain is a complete bureaucratic nightmare and costs a fortune (well done for encouraging employment, spain)

Therefore for the work I do in the UK (or for UK organisations), I would like to continue being self-employed in the UK and declare my earnings there. I also have just got some employed part-time work in Spain too, paying taxes and NIC here on that income already.

I would like to be Resident in Spain, but Non-Resident Self-Employed in the UK, paying all the taxes and NIC for my UK income in the UK.

The big question is, is this possible? Or do I have to be Resident in the UK, to be a self-employed UK person?

thanks
Larry

[maths]

It is perfectly possible to be non-UK resident yet still carry out self employment activities in the UK.

You indicate you are UK and Spanish resident. The UK/Spain treaty will resolve this dual status. If it resolves it in favour of Spain you will only be subject to UK tax on your self employment duites carried on in the UK through some fixed base (eg a UK office); otherwise no UK tax will be due. Spanish tax will be due as a Spanish resident.

If it resolves in favour of the UK both UK and non-UK income will be subject to UK tax (subject to remittance basis if you are not UK domiciled). Spanish tax will be due on Spanish work carried out there if through a fixed base.

[lazza]

Thanks very much for the reply Maths.

One thing that still isnt quite clear for me. If, as a Non-Resident in the UK, I carry out work in the UK from my "fixed base"- can I actually do it as a UK self-employed person ?? in other words, I continue to pay NIC Class 2 and Class 4 in the UK.

Thanks
Larry

[HOTTAX]

Hi Lazza - Maths.

Lazza, your situation mirrors my own position: resident in Spain (5yrs +) working for a UK company but based in Spain (and being taxed via the UK payroll) and wanting to be self-employed in the UK system rather than one here (which is, as you say, a complete nightmare, both from paperwork and financial standpoints, especially as a start-up).

Anyway, my ever-so-slight deviation from what you've asked is on the question of VAT. I am planning to put VAT on my invoices (though I will not reach the threshold at which I am obliged to add VAT) and wondered whether anyone could advise (in fact confirm, if possible) whether in fact I need to be UK resident under these circumstances. Or can I in fact be self-employed, non-resident in the UK system, and applying VAT on invoices from there.

Any feedback welcome. Thank you.

Hottax

[IanW(fr)]

Hey,

I hate to complicate 'Maths' superb answer.

But..... while DTC (Double Tax Conventions aka treaties) often cover taxes, including income tax and corporation tax, they seldom include 'social payments' (National Insurance Contributions in UK speak). A notable exception is the new UK-France Treaty which does refer to French social payments, but not UK NI.....sorry haven't read the UK-Spain DTC.

For self-employed individuals or small businesses in France, the 'cotisations' (social charges) are excruciating and inescapable, they eclipse income tax for most people. Not sure what the position is in Spain... I only have French perspective, it comes with the camembert.

I.

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Dear Forum

I have an issue that seems to baffle the people at HMRC and at the tax office. Basically I am currently resident in both Spain and UK- not sure where I will be spending most time over the next 3 years.

The thing is, that to be self-employed in Spain is a complete bureaucratic nightmare and costs a fortune (well done for encouraging employment, spain)

Therefore for the work I do in the UK (or for UK organisations), I would like to continue being self-employed in the UK and declare my earnings there. I also have just got some employed part-time work in Spain too, paying taxes and NIC here on that income already.

I would like to be Resident in Spain, but Non-Resident Self-Employed in the UK, paying all the taxes and NIC for my UK income in the UK.

The big question is, is this possible? Or do I have to be Resident in the UK, to be a self-employed UK person?

thanks
Larry