Working for UK from Spain - Tax Advice Needed!

[anonymouse]

Hi All,

I've spent hours looking around online and can't seem to find a straight answer to my situation.

Here is my situation:

1. I work as an employee for my family business which is based in the UK and I'm on PAYE in UK and pay tax in UK.
2. I run an online retail business as a sole trader in the UK.
3. I own a Limited company in the UK which is currently inactive/not trading
4. I have started living in Spain (working for family business from home) and will soon need to declare myself as a resident
5. I will need to carry out business activity for online retail business from Spain (storing and sending out goods from home, and working online)
6. I want to maintain payments from my main job (working for family business) into my UK bank account, because I have loan, overdraft and credit card payments which need to be paid monthly.

Here is the conclusion that I've come to:

1. I will need to set up as an Autonomo in Spain and invoice my online retail (sole trader) business in the UK for storage and postage costs.
2. I will need to pay UK income tax on my employment and online business, then declare it in Spain, pay tax again in Spain, then reclaim it from the UK under the dual tax agreement

This obviously isn't ideal though as it will be very bad for cash flow (paying tax twice, then waiting for a refund) and from what I've seen from online tax calculators, I will have to pay a higher rate of income tax in Spain + the Autonomo social security fees.

I had thought about invoicing my family businesses for my work through an Autonomo company - which would make things a lot simpler, but then I wouldn't be able to maintain cash payments into my UK bank for the repayment services.

Would I be able to do this? :

1. Get salary paid to UK bank, pay debts, send remainder to Spanish bank, then pay tax in Spain and reclaim UK tax
2. Instead of registering as autonomo, just use business bank card of sole trader company for postage costs/business expenses in spain and declare income from the sole trader company through UK self-assesment as usual, then declare the tax in Spain and reclaim from UK?

If I could do this then I wouldn't need to register as Autonomo, but I have doubts as to whether its compliant with UK law to carry out commercial activity for the business from abroad?

As you can see, I'm quite confused. This forum is my last hope before I give in and hire a specialist tax adviser, so any advice would be much appreciated!

Kind regards

Anon

[GlobalTaxAdviser]

Hi

I would either run your business from Spain and just pay tax in one place if you are non resident and intend to stay in Spain Long term.

If you have a limited company then you arrange your affairs so you end up paying tax in Spain only

If you manage the UK business form Spain then the UK profits may end up being taxed in both UK and Spain less double tax relief as per the treaty

Yes, I would take professional advice.

Kind Regards

GTA