How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Sam Your Own Question
Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13863
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
16196420
Type Your Tax Question Here...
Sam is online now

I am spanish resident who is a self employed consultant to

Resolved Question:

I am spanish resident who is a self employed consultant to a uk company. I currently work 25-30 days a year in the uk, the rest of the time I work abroad remotely, but if I exceed the 90 day ruling, I understand that I have to pay my tax then in the UK. Would I qualify for Personal tax allowance or would I be taxed on whole income? How is this done? I have a UK postal address, but I do not have a residence there. I would be happy to declare the UK income every year, as a self employed person, if I qualify for the tax allowance.. Can you help please.
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
Hi

Thanks for your question

Any duties performed in the UK will be subject to UK tax, and whilst you advise you are self employed, if you provide your services to just this one business, then HMRC may well argue this is employment and not self employment. And as these main duties are performed in the UK, then the 90 day rule has no bearing. (this applies to those carrying out ALL main duties abroad (of course if you are just in the UK for meetings/incidental duties - then please do advise)

But as already advised either way you will be subject to UK tax, so once you have established whether you should be employed or self employed, then as a self employed individual
1)You should register as self employed with HMRC
2) Complete a self assessment tax return to declare the UK earned income

If an employee then
1) The UK business should operate PAYE on the money they pay for your the UK duties
2) You still would need to complete a self assessment tax return

Either way you are awarded UK personal allowances which allows the first £9440 of income to be paid free of tax, but if self employed there is Class 4 National Insurance to consider and as an employee Class 1 National Insurance - these rates are
1) Employee first £7696 free than at 12% (deducted through your pay as an employee if due)
2) Self Employed first £7755 free then at 9% (paid once your tax return is submitted and the amount established)

Thanks

Sam
Customer: replied 3 years ago.
I am a freelance consultant. Majority of clients in Spain, where I am resident and declare my tax returns. At present I do consultancy for 1 client in the uk. The main duties are not performed in the uk, I work remotely from Spain. My time in the uk is for meetings with this company. How does hmrc view this situation?
Expert:  Sam replied 3 years ago.
Hi

Thanks for your response

And if you just in the UK to attend meetings and the actual work takes place in Spain, then you have no UK tax considerations and as under the 90 day rule, just declare this income as you do - to the Spanish tax authorities. And if you wish to treat this all under the guise of self employment - then it would seem that Spain tax has no problems with this.

The difficulty (which your question asks) is if you exceed the 90 day rule, in that instance you will be liable to tax, even if your duties performed in the UK are just for meetings. And in that instance you would need to register as self employed with the UK tax authorities to declare the UK earnings, and would qualify for UK personal allowances as advised above.

Thanks

Sam
Customer: replied 3 years ago.
If I am going to be taxed some years ie over 90 days, can I register as self employed and pay the uk tax and ni stamp, as it is more complicated with 90 days as this may vary in the future.
Expert:  Sam replied 3 years ago.
Hi Lee

You can - as HMRC will not object to this - but I will advise if this is the case then
1) If you then are under the 90 day rule HMRC will NOT charge you tax and you may claim back National Insurance after the end of each tax year and
2) If you do suffer UK tax, then you can claim this as a tax credit against your total income declared to the Spanish tax authorities.

I have added a link here for you to register as self employed,
https://online.hmrc.gov.uk/registration/newbusiness/introduction

this will allow the issue of the 10 digit unique taxpayer reference (but you will, if you have no already have to apply for a National Insurance number - you will need to telephone Jobcentre Plus on telephone: 0845(NNN) NNN-NNNN to arrange to get one. Lines are open Monday to Friday 8am to 6pm and are normally less busy before 9am. They may require you to attend an 'Evidence of identity' interview -


And you will pay Class 2 National Insurance - £2.70 a week which is deducted each month or quarter (monthly if you have this taken by your bank account, quarterly in you wait for the bill and then pay it)

Then after each 5th April HMRC will issue you with a self assessment tax return with a self employment page and a residency page. Complete this and get it back to them by 31st Oct (same year) and then anything you might out (tax and Class 4 National Insurance is paid no later than the following 31st Jan)


Thanks

Sam
Sam and other Tax Specialists are ready to help you

Related Tax Questions