Is it Legal to have a Company in the UK?
This is a question I am often asked, and 9 times out of 10 the answer is not liked.
Hey I am just a messenger not the person who makes the rules.
The problem I have with trying to explain this, is simply because since Brexit the UK is not longer in the EU, technically it can be argued that is has legally always been in place but not adhered to as strictly as it is now and will be in the future.
As most of you now know, I do not beat around the bush, I will not tell you what you want to hear but I will tell you the truth and as an accountant, I am bound by an oath to be honest and fair, I will absolutely not help anyone do anything illegal, I also will not be happy to just take money without a client knowing what the facts are, the decision is then theirs if they wish to continue but they will now know the truth and have a choice.
I have to mention that it does not matter what your nationality is, the UK is now Non Eu and has to be treated as such.
I am here to help and save you Tax where I can and offer the best advice I can give to the best of my knowledge-
The first question that I ask is " is it a company that as a building, staff, stock and is well established?"
If this is the case then its perfectly feasible to keep this business running in the UK, it wouldn't make sense to disturb the reputation.
However you will still need to make changes if you intend to be a resident in Spain.
As would be the norm, usually a shareholder/director will take a salary and receive most of the income in dividends, any good accountant would do this to be the most efficient in the UK, it works a little different here and it would make better sense to register as Autonomo and issue the company invoices for services rendered overseas.
We now come to Self employed who have a business without any physical entity, this is where i cannot seem to make people understand that as fiscal resident in Spain all your world wide income has to be declared here not in the UK.
The problems this can bring is under Spanish corporation tax rules, if you are taking care of your business in Spain then this can be liable for Spanish Corporation tax , and unfortunately the UK and Spanish Double Tax Treaty agrees with it!
If as is usual with a sole owner its just your name on the title as both Director/shareholder and don´t forget it can include your spouse if they are living with you in Spain and it doesn't have a physical building apart from you working from home, then this can inadvertently cause the said company to become subject to the corporation Tax, this tax not only needs to be declared and paid at the first €1 it is also a higher tax rate at 25% minimum, if you are aware and doing this and the Spanish Tax office becomes aware of it, you will be audited, and have a tax assessment of the company and because both UK and Spain are in agreement on this then there will no offset tax, you will need to pay what they may find you owe, you can try to get the UK Corporation tax repaid but this will take time and cost money to get it sorted.
Don´t forget they can go back 4 to 5 years too!
Now if your set on having a business and want it for trade then you can register the business over in Spain and do everything from here and not in the UK, it can be set up just as easily, albeit cost more with registration and permits if needed, and may be needed if you need the liability of a business or other reasons, it can be done.
The majority though do just apply for autonomo, although not as cheap as the UK, and it really is not as generous with the allowable expenses, it is getting better and hopeful to changes, the good thing about Automomo is having the healthcare for all the immediate family, this alone could cost you the autonomo fee, especially once it does rise to the full amount.
The fee is also tax deductible and after the first 2 years*3 in remote areas or under 35 women/30 men, you can always go baja and take a break in your quiet months.
I do have a whole article on this underneath.
I have wrote the article due to quite a few recent discussions in which I felt the rules I did mention above where not applicable to them or that I was wrong.
All new enquires for the above will be directed to this page before I attempt to engage in future or further conversations.
Thank you for reading.
All my information is direct from the Staff or the website on the