Is it possible to invoice in Ireland or UK if I'm not based there?
Thread poster: Desmond Graal

Desmond Graal
Local time: 12:17
Spanish to English
+ ...
May 31

Hi everyone,

My situation is a little bit complicated and Kafkaesque. :-S

I’m an Irish citizen. I’ve lived and worked in Spain for over 25 years, but I did work briefly in the UK before that (never in Ireland) and still have a British P45 number. I currently have a permanent intermittent employment contract in Spain, which means I am employed for six months and then go on the dole for six months. I occasionally take on freelance translation work during these periods (it never exceeds 10,000 euros income per year) and invoice through a cooperative because registering as self-employed and working full-time and/or receiving dole are not compatible in Spain. Recently, however, the legislation has changed and I am no longer able to invoice any freelance work through a cooperative for one year after receiving dole. I can register with Hacienda (Spanish Tax Authorities), but I also run the risk of falling foul of the Social Security system, which doesn't allow employees to issue invoices for freelance work. Go figure.

So, what I would be interested in knowing is if it is possible to register in the UK and invoice my freelance work there? I seem to remember that you had to have spent at least 180 days living in the UK to be eligible for this, but maybe I’m wrong. I wonder if anybody else has been in a similar situation and found a workaround? It would be great if you guys could give me some pointers. I’m totally lost at the moment.

Best wishes, and thanks in advance.

Dez


 

Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
+ ...
UK limited company Jun 1

According to https://www.rapidformations.co.uk/blog/can-a-non-uk-resident-form-a-uk-limited-company/ , a non-resident can set up a limited company in the UK.

Then your company could pay you a salary, so that you're not self-employed. You still need to be sure it's compatible with Spanish unemployment benefit regulations, of course.

But if you do so, be sure to understand where such a company is taxed. You can find out in the so-called double tax treaty between the UK and Spain. If work is carried out in Spain, it could be taxable in Spain. Not just your salary, but also any company profits.

And you also need to understand the EU's regulations about coordination of social security, under which social security contributions would be payable in the country where the work takes place in a situation like yours. So your UK company would most likely need to register would Spanish social security administrations.

This could end up being very complicated.


 

RobinB  Identity Verified
United States
Local time: 05:17
German to English
Permanent residence Jun 1

As another respondent has already said, you could - at least in theory - form a company in the UK. However, in your case the company's place of business would be in Spain, not the UK, and it would be subject to Spanish tax and social security law (and things like employment law). But the company itself would also be subject to UK company law, meaning that you would have to file your accounts with Companies House every year (or risk a quite painful penalty). You would need an accountant in the UK and an accountant in Spain. You could certainly issue invoices from your UK company, but the invoices would have to show two addresses: the registered office in the UK, and the place of business in Spain. For information, several thousand German small businesses tried this same route back in the 2000s, and it almost always ended in tears one way or another.

Is it really worth the candle?

For information, the "180 day rule" applies to tax residence in a particular year, not to residence in past years. As you say you've been living in Spain for over 25 years, you are solely resident in Spain for tax purposes.

I think you're going to have to try an even more creative solution.


 

Anne Bohy  Identity Verified
France
Local time: 12:17
English to French
the problem is not self-employment, the problem is the dole Jun 3

When you get unemployment benefits, you're supposed to live on it, and look for a job. If the non-cumulation rules have changed in Spain, it's probably because many people were relying on such a situation rather than looking for a full-time job. As the economic situation is improving, you can expect the rules to become stricter.
Working 6 months and translating 6 months is not a satisfactory situation anyway : how could you keep customers if unavailable half of the year?
I would not encourage to try to find solutions abroad, except if abiding very carefully to all laws, as financial information is more and more shared between countries. It might look nice now, but turn into a nightmare in a few years. And the burden of filing tax returns in two different countries is probably not worth it...


 

Tom in London
United Kingdom
Local time: 11:17
Member (2008)
Italian to English
Simplify Jun 3

Desmond Graal wrote:

My situation is a little bit complicated and Kafkaesque


Desmond, from one Irishman to another:

Let's stop trying to invent our own personal fiscal system. What you envisage is Mission Impossible.

Make a big decision in your life:

Decide where you want to live and work, and live and work there.

There will be plusses and minusses. You won't be able to have your cake and eat it.

(Now where have I heard that before?)

[Edited at 2018-06-03 13:12 GMT]


 

Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
+ ...
Agree Jun 3

Tom in London wrote:

Let's stop trying to invent our own personal fiscal system. What you envisage is Mission Impossible.

Make a big decision in your life:

Decide where you want to live and work, and live and work there.

There will be plusses and minusses.


Sounds like good advice, and from someone who knows what he is talking about in this context.

Many British expats in southern Europe seem to think all they have to do to avoid local taxes, social charges and administrative complications is to set up a UK limited company and receive payment in the UK, but if they are caught out, they could face ruin by having to pay years of local taxes and social charges plus penalties and, in the worst cases, criminal prosecution for evasion of tax and social charges (I am not implying that you want to do anything illegal).

It's possible to set up and operate such a company legally, but everything has to be operated and declared in conformity with both countries' laws and EU law and any bilateral or multilateral conventions.

My solution was to quit southern Europe and move to a country where it's simpler to be self-employed, and as far as I know, so was Tom's.

The sun and many other things in southern Europe are alluring, but they can come with heavy price tag.

Tom in London wrote:
You won't be able to have your cake and eat it.


Perhaps Desmond could eat a Spanish cake, and then import another one from the UK.icon_smile.gif


 

Tom in London
United Kingdom
Local time: 11:17
Member (2008)
Italian to English
OOps! Jun 3

Thomas T. Frost wrote:

Many British expats in southern Europe seem to think


We're talking about Irish expats here.


 

Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
+ ...
Indeed Jun 3

Tom in London wrote:

Thomas T. Frost wrote:

Many British expats in southern Europe seem to think


We're talking about Irish expats here.


I know. I referred to British expats because that's the ones who did all the tax dodging in France. I didn't say or imply that Desmond was British. And I'm not implying that the British in general are tax dodgers.


 

Desmond Graal
Local time: 12:17
Spanish to English
+ ...
TOPIC STARTER
Is it possible to invoice in Ireland or UK if I'm not based there? Jun 3

Thank you all for your invaluable input.

I think maybe I should have given a little bit more background information to avoid any misunderstandings:

1. Up until three years ago I was permanent staff at the company in question (full-time for the past 15 years). When they "offered" me a permanent intermittent employment contract because of downsizing, I had very little say in the matter. However, what I do now is actually an ideal scenario: I work in-house in a profession I'm passionate about, and then I get to freelance for six months (stopping my dole payments every time I invoice).

2. This enquiry was not about "tax dodging" or inventing "new fiscal systems"; it was about trying to invoice freelance work in a 100% legal manner since the new legislation in Spain has made this option complicated for those of us in my situation.

3. Leaving southern Europe is not an option: I have a family and a life here. And quite frankly, this is my home.

I'd really appreciate it if you wouldn't post any more replies. Reading between the lines I can see that invoicing in other countries is not going to be an option for me.

Go raibh maith agat!


 

Nikki Scott-Despaigne  Identity Verified
Local time: 12:17
French to English
Yes, if you have the right legal set-up to do so Jun 3

In answer to your question, then as my header points out, of course you can. However, you cannot have your cake and eat it.icon_wink.gif In most jurisdictions, if you are registered as unemployed following the end of a job, if you are fortunate enough to be entitled to some kind of social support (dole, or other benefits), then you cannot have income from some form of work and continue to collect benefits. Some (most?) states do have a system where you remain registered as unemployed, but whenever you work, you declare what you have earned and your benefit entitlement will be reduced to account for the work you did.

Being self-employed is incompatible with being signed on as unemployed. In some countries, it is possible to have certain forms of supplementary income to top up periods when your income from being employed falls below a certain limit. That is not the same as bing "signed on" and working. Such systems are generally created to encourage enterprise. If you do not make enough money from being self-employed, then you can either shut up shop or get a part-time job.

The long and short of it is that you cannot expect to receive unemployment benefit if you are working.


 


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