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Tim Project2011
25th July 2011, 13:45
Hello,

If any of you could offer advice in the following scenario it would be much appreciated.

I have been approached with a job opportunity in Spain as a freelancer on a 6th month contract. I have absolutely no idea where to start. Concerns centre around tax, N.I.E issues and spainish residency issues. Also I am unaware what expenses I could claim.

THE BIG QUESTION: Should I use an umbrella company status or go for Limited status? Has anyone got any advice? I have an inclination that the limited route is financially more beneficial, but alot of paper work.

What I know, or at least I think I know: -

If the contract is less than 6 months my umbrella/limited company can be based in the UK and directly invoice the client. If less than 6 months I do not have to contribute towards the Spainish tax/National insurance system because I am paying it in the uk.

Would you go for the limited company option? or umbrella?

I would have to relocate to spain and consequently pay rent over there + living expenses out of my own pocket.

Many Thanks

Tim

LisaContractorUmbrella
26th July 2011, 06:43
Hello,

If any of you could offer advice in the following scenario it would be much appreciated.

I have been approached with a job opportunity in Spain as a freelancer on a 6th month contract. I have absolutely no idea where to start. Concerns centre around tax, N.I.E issues and spainish residency issues. Also I am unaware what expenses I could claim.

THE BIG QUESTION: Should I use an umbrella company status or go for Limited status? Has anyone got any advice? I have an inclination that the limited route is financially more beneficial, but alot of paper work.

What I know, or at least I think I know: -

If the contract is less than 6 months my umbrella/limited company can be based in the UK and directly invoice the client. If less than 6 months I do not have to contribute towards the Spainish tax/National insurance system because I am paying it in the uk.

Would you go for the limited company option? or umbrella?

I would have to relocate to spain and consequently pay rent over there + living expenses out of my own pocket.

Many Thanks

Tim

Hi Tim

If your contract is less than 183 days then you can continue to pay income tax and NI without liability in Spain and you can use a UK umbrella company. If this is your first contract then, depending on your rate and IR35 status, an umbrella company would probably be best for you.

Whether or not you could claim living allowances in Spain will depend on whether or not you will be maintaining a residence in England whilst you are over there.

Tim Project2011
27th July 2011, 11:30
Hello Lisa,

thank you for your advice,

The proposed rate is €200 per day and for the last 6 months I have been working as a contractor under umbrella status. That was my first contract.

I know nothing about the IR code you quoted!

this is pretty new to me!!!

I will not be paying rent in the UK whilst abroad. Under what circumstances would Limted be a better option that umbrella in my case?

LisaContractorUmbrella
27th July 2011, 13:40
Hello Lisa,

thank you for your advice,

The proposed rate is €200 per day and for the last 6 months I have been working as a contractor under umbrella status. That was my first contract.

I know nothing about the IR code you quoted!

this is pretty new to me!!!

I will not be paying rent in the UK whilst abroad. Under what circumstances would Limted be a better option that umbrella in my case?

Hi Tim

Unless your contract falls outside IR35 you will not really be any better off working through a Limited Company in this situation. IR35 determines the way that you receive payment through a Limited Company; if you are what is termed a 'deemed employee' then you fall inside and your income must be processed through PAYE, if you are in business on your own account and are not under the supervision, direction or control of the person you are contracted to you will fall outside and can draw dividends from your Limited Company.

yasockie
27th July 2011, 13:47
If it's really for 6 months, I would encourage you to stay with the UK tax system - it's much more simple.
The rule normally is your tax residency changes after 180 days in a given tax year so you would not fall under that for a while.
In Spain you would probably want to trade as 'autonomo' which might be slightly more efficient financially, but bureaucracy in Spain is a huge pain so I don't recommend it.

Tim Project2011
28th July 2011, 09:36
a big thank you to both of your comments.