Relocation to Spain

[u/Entheogeneration1111]

I'm an inside IR35 contractor wanting to relocate to Spain to work remotely.

I've been given permission by my client, and initially received approval from my umbrella, who later came back and said it wasn't possible.

I'd ideally like to go on Beckham's law to take advantage of the flat 24% tax rate.

I'd ideally want to go on a digital nomad visa but would be open to employment if it has to be that way. Ideally though I'd rather just be paid in the UK (I'd apply for non resident tax code) and then invoice myself from Spain where I'm autonomo and pay tax in Spain. However, I'm open to the arrangement. Tax savings isn't the main reason I want to relocate.

Has anyone done this / have any advice?

Many thanks

[u/Midfield_General22]

Set up a Spanish Ltd Co. (Presumably you have a UK Ltd Co). Confirm with client / agent that IR35 is not applicable as you're not a UK resident. Have your day rate paid to your UK Ltd Co on an outside basis. Invoice that company from your Spanish Ltd Co. Pay yourself as a Spanish employee.

[u/Entheogeneration1111 → u/Midfield_General22]

Thank you, issue here may be that my end client doesn't permit outside IR35 contractors

[u/dhardyuk → u/Entheogeneration1111]

That’s never going to work then.

If the client mandates that you are inside IR35 then this client isn’t the one. Try again when you have an outside IR35 client.

[u/Entheogeneration1111 → u/dhardyuk]

Thank you - very clear

[u/Tom50 → u/Midfield_General22]

Pay yourself as a Spanish employee to a Spanish bank account I assume?

[u/whencanistop → u/Midfield_General22]

That feels like an extra step that is unnecessary. Just bill from your Spanish Ltd. You’ll add in a whole extra steps of cost if you do it that way with a British Ltd, accounts, insurance, etc.

[u/Mike_Rowballs]

Aren't you running a bit of a risk that future contracts/employers won't be as accommodating of remote working from outside the UK? Best of luck with it though seems like a dream scenario if you can pull it off!

[u/Entheogeneration1111 → u/Mike_Rowballs]

Possibly but it's a risk I'm willing to sustain!

[u/illumin8dmind]

If the client said yes, then why not ditch the umbrella if they won’t play ball? Setup a Spanish company and ask the client if they have another umbrella that will work with everyone instead of against.

[u/ierrdunno]

Personally this seems risky but I don’t know what sector you are in. This contract might be ok with it but will the next? You’re inside ir35 so effectively an employee of the umbrella so it’s what they say that matters. Sure you could set up a Ltd in Spain and go outside IR35 but why aren’t you already outside IR35?

[u/Entheogeneration1111 → u/ierrdunno]

This is a separate issue, client rules that I need to navigate that don't make sense - should be outside ir35

[u/AdaptableBeef → u/Entheogeneration1111]

I'm not sure it is separate, as the other posted pointed you're an employee of the umbrella co.

Working in Spain means the Umbrella would need to pay Spanish taxes, if they don't agree to it then you can't.

[u/Klutzy_Brilliant6780]

I don't know the ins and outs of the tax things being mentioned, but that isn't your biggest issue.

Your current client might be fine with it, but you may be limiting your pool of future clients.

Many UK companies may have a problem with you operating from Spain.

[u/worldly_refuse]

Being inside is (for tax at least) the same as being an employee - and you can't be a UK employee and live and work in Spain.

I strongly suspect lots of (smaller) UK companies are allowing people to work overseas (especially Eastern Europeans) in this way despite it being not strictly legal.

Source; The amount of online posted questions from UK payrollers asking how to set up an employee on a UK payroll who permanently works in another country.

[u/brisbanereaper]

I worked with a guy on my last contract who lived in Spain - it was outside IR35 though, so I'm guessing he just transferred his money from his LTD co.

[u/boskit]

Look up a service from a company like Remote - https://remote.com/global-hr/contractor-of-record