Tax Liability when operating a UK registered Ltd Co. in Spain??

Been a while since I posted, still hoping to make the move from the UK one day, hopefully to the Javea area.

If this subject has been discussed before apologies, but I can't find any reference.

I operate a mobile tyre fitting and automotive air conditioning company in the UK. No business premises required as my operation is purely mobile.Registered with Companies house as a private company limited by gaurantee. Also vat registered with HMRC.

My question is;

Would it be in my interest to operate my current business in Spain, (which is logistically possible) or to register as autonomo and do the whole process again in Spain?

Any advice appreciated, Thanks in advance. 

If you plan to live in Spain I don't know why you wouldn't just run your business as a Spanish business.  I think legally you have to do it anyway, especially if you plan to be here for more than 6 months.

Setting up as Autonomo is relatively easy.  You will need to pay around 250 Euros per month social security and budget around 30 Euros per month for someone (gestor) to do your paperwork.

These resources may be of interest:

Self employed in Spain or SL?

Setting up as self employed in Spain

Justin

Thanks very much for your quick response, much appreciated and I will check out the references you have suggested.

My question was based on an assumption arrived at having overheard  that the tax regulations in Spain are quite arduous, and foreigners setting up in Spain have to jump through more hoops than the indiginous Spanish, and pay more taxes than in the UK. 

I hope that isn't the case, just checking.

I suppose you could always "test the water" first.  Keep your UK company, try your business out in Spain and see how you get on.  In today's economic climate it's probably the way to go.  It seems you are in a position where you don't really need to risk everything to start a life in Spain.  You can try it out for a bit, working as you do now.

It's probably what I would do.

Justin

you contact hmrc direct on one of their "helplines" however if one is resident of the UK then hmrc has first dabs on your taxes known as "worldwide assets" that said you can "offset" all as normal also if you paid say 10k tax in the UK and Spain wanted x amount of tax you would not have to pay twice, I cant remember if the first batch would go tyo Spain and any resideu to the UK or vicea-versa-most decent UK accountants should be ab le to tell you-if you need the contact detials of one then pm me.

Thank you very much I will contact hmrc also. 

Be careful though because in English tax law you are two legal persons.  Your company is a legal person and you are a physical person.  You as a physical person will be tax-resident in whichever country you spend more than 183 days in the calendar year but I assume your company will always be tax-resident in the UK (not sure though so you'd need to check with hmrc).  So presumably if you billed everyone in the name of your company, you would pay no Spanish tax on your company's income. But you'd have to declare it in your company's accounts.  However, if you then pay yourself a salary or a dividend, that's you as a physical person and if you are physically stood on Spanish soil 183 days in the calendar year, you will be taxed in Spain on your worldwide income.

In addition, if you are employed (as a director) by your UK company, the company must tax you on a PAYE basis and pay national insurance for you.  So your health cover would be in the UK.  But if you are in Spain 183 days you are not technically entitled to the EHIC so your health cover in Spain is a bit iffy.

So the big decision is whether to register as autonomo or not.  If you leave it for a few months you can, as Justin suggests, test the water while still being covered by the EHIC but you would need to run the income through your UK company and pay tax and national insurance in the UK as you do now.  You'd also probably need to invoice either in English or bilingual.  And you or your accountants are going to have a real laugh when it comes to exchange rates unless you intend to bill in sterling!

It is far from a strightforward choice.  Good luck anyway. 

excellent, thanks very much. I think it needs a lot of analysis. Certainly some things to consider there.

If I can paraphrase Occam, the simplest solution is usually the best. That may very well mean going the autonomo route.

Thanks again. 

TO THROW A FURTHER "SPANNER IN THE WORKS" THERE ARE ALSO ADVANTAGES ON REGISTERING YOUR NEWCO IN GIB!

ALTHOUGH A LOT WOULD BE DEPENDENT UPON ITS TUNROVER AS COSTS THERE CAN BE HIGH.

Whilst all the suggestions are quite good the major drawback to "teasting the water " is that I assume that your vehicle is signwritten & under spanish law you cannot advertise a business on any foreign registered vehicle. ( yes, many people do , I know .) Even if you went legal in spain you still couldn't do it as it still applies & if you were then classed as a resident it's also illegal for any spanish national or foreigner who is registered as a resident ( in some regions you are classed as a resident if you have an NIe number regardless of whether you've registered on the list of foreigners. Cataluña being one )  to drive a non-spanish registered vehicle unless it is not owned by him.

guslopez - good job you said it. I was going to say CDS is full of English registered cars with Spanish business logos. On that topic I am of the opinion that all you have to worry about is insurance if you have an accident and have to deal with the claims "refusal" department. I don't believe the police or tax authorities care. the only reason I transferred my car was becuasof insurance and knowing how insurance companies try to escape when there's a claim.

ioanedi - I don't think you will be earning so much that you need a complex structure. Beyond the big tyre places this is all cash business. Also in Spain there is no VAT registration limit. So if you register for tax you are automatically registered for VAT.  Registering as self-empoyed or autonomo is fine or else don't declare anything at all.

Have you figured out where you will buy tyres etc

Can you repair aircon rads?

The Spanish do this job very well and I can buy all my tyres, car radiator work, and car servicing without paying VAT and I would rather deal with Spanish business on this basis than an expat in a van (UK reg) on a mobile.

So do your homeowrk well but otherwise good luck!