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bigduckontax, Accountant
Category: Tax
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I am moving from UK to Spain but I want to keep my UK job.

Customer Question

I am moving from UK to Spain but I want to keep my UK job. What's the best way of doing it to make sure I don't pay too much tax and I still benefit from medical care, pensions etc.

My current employer is flexible. I don't know if I can stay as PAYE employee because I don't know if it will be accepted in Spain; living there without paying taxes? Also will I be able to get medical care etc then? I could resign from being PAYE employee and become self employed in Spain and pay taxes in Spain while invoicing my UK employer monthly? I'm not sure which option is best for both me and my employer.

Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.
If you wish to keep your card stamped, to use an old expression, it would be better to be paid in the UK under PAYE arrangements thus maintaining your contribution record. There is a new Double Taxation Treaty between the UK and Spain, but like most of these treaties it is designed to ensure that the same income stream is not taxed in both jurisdictions. This is achieved by means of tax credits, the tax deducted in one state being allowed as a tax credit against the liability in another state. The effect Is merely confined to maybe having to cover differences caused by variable rates of tax between the two countries. Medical care becomes a bit of a problem though (see below).
If you spend more than 182 days in any one year in Spain, cumulative, not consecutive, you are liable to Spanish Income Tax, just like a Spaniard would be in England viz a viz UK tax. Here is a link to the Telegraph's advice for ex pats in Spain:
Be vary careful about medical care though. If you are not paying social security contributions, then you can choose to take out private health insurance or pay the full amount of any medical costs. There is a huge gap between free care if you are over a certain age and that which you have to pay for in Spain. You should research this as it is really beyond the scope of an UK taxation advice site. Here is a link for information on the subject:
I do hope I have given you some guidance for your time in Spain. I think that you will have to do a great deal of research before taking the plunge.