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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4721
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Hi, I am currently a UK citizen, any pay uk taxes. I am starting

Customer Question

Hi,
I am currently a UK citizen, any pay uk taxes.
I am starting up a company which will help british people buy property in spain.
I will spend 50% of the time in each country.
My company will have an office in Mallorca.
I will invoice estate agents in Mallorca for my work therefor i will be paid in Euros.

can you advise me on a couple of things?
1. could I be a shareholder of a spanish company but work as a UK based consultant and do a self assement tax return?
2. would it be better just to set the company up as a uk company?
Thanks in advance
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

You have not stated if you will be a director and shareholder of the Spanish company. Being a company in Spain you will have to report your trading results to the Spanish tax authorities and also your income from this source on your UK tax return. You may also have to report business with interested parties in your accounts. I am not not fully conversant with reporting requirments in Spain.

You may find opening a company in Spain and having a base there may not be a cheaper option in financial and administrative terms.

In my view you should consider having a UK based company and charge estate agents in Mallorca from this country. Your base will be the UK and any travel you do on business visiting clients in Mallorca would be a deductible expense for tax purposes.

If you find business has grown sufficiently to bear additional administrative cost burden then consider setting up a company in that country.

I hope this is helpful and answers your question.


If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

Thanks for this. I will ask one more question.


We have now decided that we will set up a UK company.


We will be UK tax payers and invoice our clients in mallorca.


My question is should I be PAYE with this UK company or should I be self employed and invoice my own company for my services?


Thanks

Expert:  taxadvisor.uk replied 2 years ago.
Tom, thank you for your reply.

My advice would be to become an employee of the your UK company as you can't be self employed and invoice your own company.

You should draw a minimum salary to cover your personal allowance and pay as little NIC as possible (both employee and employer) and supplement your salary with dividend paymets from the company profits after tax. These dividend payments can be drawn as interim dividends based on estimated profits for the year after corporation tax provision (as dividends as distribution of taxed profits).

I hope this is helpful and answers your question.


If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.



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