Living in Spain and working remotely for UK based company

Hi, Where and how would I need to pay the tax when living in Spain (under Digital Nomad) and work remotely for UK based employer? Will I not loose my UK residency status (I do not have UK passport, I'm the EU citizen). Thank you! 

Hi L. Czekala,
You would be considered not a UK resident for tax purposes and your UK employment income will be taxed in Spain, as you will be a tax resident in Spain.
To advise HMRC that you are leaving or have left the UK and remain employed by a UK employer, you will need to submit an online P85 here:
Get your Income Tax right if you're leaving the UK (P85)
Your ability to become a UK resident in the future is a Home Office matter and not something that we can comment on.
Home Office
Thank you. 

Thank you for your response! There's one more thing I need to clarify: while living in Spain, but being employed by a UK based company which does not operate in Spain (is not a tax entity), will I become liable for my own tax only or would I need to cover other deductions from my salary before tax? Where will social security/National Insurance be paid? Lastly, can you advise on the tax level in Spain? Thank you for your help!

Name removed admin  .

Hi L. Czekala,
As you are resident in Spain, while employed by a UK employer, you will be taxed in Spain on that employment income (to Spain, your UK employment income is foreing income).  
You should complete a P85 to advise HMRC that you have left the UK, but still have a live UK employment.
This will ensure that no UK tax is deducted from your employment, so that you can declare it in Spain and pay tax there.
Get your Income Tax right if you're leaving the UK (P85).
Thank you.

Hello, I understand my obligations as an employee. My employer wants to know if they continue to pay me as normal in the UK to a UK bank account. All the information I can find it for employees, I can't find any for UK employers.

Thank you! However this didn't really answer my question. I'll rephrase: My employer and I pay for my employment. Whereas I understand I'd be liable for tax in Spain in not sure whether this will be also applicable to my employer? Or will I receive more than a before tax including my employers portion (contribution to the employment) of the employment costs (to pay them in Spain)? Lastly what with national insurance/social security? Will this be paid in the UK from my employment or on Spain? What are the deduction from my before tax in such circumstances? Thanks! KR Lukasz

Hi Chris,

Your UK employer should keep you on their books and keep your PAYE record live. You should complete the online P85, to advise HMRC that you are not UK resident but have live UK employment, so that the correct tax code can be issued. 

Get your Income Tax right if you're leaving the UK (P85)

You should declare this employment income in Spain.

Thank you.

Hi L. Czekala,

Your employer is not liable to pay tax in Spain. You are. Your gross employment income should be declared in Spain, so that it can be taxed appropriately in that country. As you are not UK resident, your employment income will not have national insurance deducted.  

If you want to pay NIC towards your state pension, then you will need to contact the NIC helpline for advice (+44 19 1225 4811 from outside the UK).  

You will need to complete form P85 (if you have not already done so) to declare that you are no longer resident in the UK and that you still have live UK employment. 

Get your Income Tax right if you're leaving the UK (P85)

This will allow your employer to receive a tax code advising that they do not need to deduct UK tax from your income.

Thank you.

Ok, thank you for your response. Lastly, I would like to understand more about the timing: assuming I want to move to Spain in September, and then become liable for tax from September, when (what month) do I need to provide you with the P85 from to ensure I will not be taxed in the UK and that in September I'll receive my before tax salary? After a period of time (say one year), when I decide to return to the UK, within the same employment, what is the process? Thank you! Kind regards Lukasz

Hi L. Czekala,
You will complete form P85 giving your exact date of departure from the UK.
When you return to the UK you should advise contact us to let us know so that we can ensure the correct code number is operated for you.
Please see:
Income Tax: general enquiries
Thank you. 

Dear team, I have a similar query. My circumstances are different, though. I am a UK citizen with a remote job. I am considering moving to Spain under the Digital Nomad Visa. I have two properties in the UK. Kindly advise on the tax rules I will have to follow. Thank you

Hi Mandy_123,
Please refer to guidance at:
Tax on your UK income if you live abroad Skip to contents of guide Contents
Thank you. 
 

Hi Lukasz, I hope your situation has cleared out well and you are ready for your move to Spain. I'm facing a similar situation with my UK-based employer agreeing for me to move to Spain permanently. The company is quite small so we lack legal department that can do all the work so I'm trying to do some due diligence on my side to help. I'm wondering what is your employment status for the move - are you a full-time employee in UK or do you have to become a contractor in Spain who will offer services to UK client? Thanks, 

Name removed admin .

Hi jkosecki,
Please refer to:
Travel to Spain for work
Thank you. 
 

Hi there, I have similar queries to those already here. I am also looking to move to Spain this year under the Digital Nomad Visa. I understand I need to complete and send a P85 form to HMRC. Do I exclude parts 2 & 3 from the P45 form as I would still be working for my current employer, I would not have an updated P45. Also - my employer is also small and doesn't have a supporting legal team. What are the key steps they need to do eg liaise with Spanish Tax Office or Spanish Social Security Office? Thanks

Hi team, My question pertains more to the potential charges and complications for my employer. I hold a European passport and currently work remotely for a UK-based company. I am considering relocating to Spain while continuing to work remotely. However, my employer does not have a tax residence in Spain. Are there any obstacles to me moving to another country? Would my employer incur any additional expenses or obligations due to this relocation?

Hi Olivia,

You can see guidance here:

Travel to Spain for work

Your employer would need to contact the Spanish authorities themselves to see what is required.

Thank you.

Hi
This forum is for personal queries only and your employer would need to contact HMRC themselves to discuss any concerns.

Good afternoon, I moved to Spain September 2021. I have dual citizenship (UK/non EU country) and I currently hold Spanish residency (with non EU passport) and have been submitting tax return in Spain since FY2023. I have been working for a UK company since 2019 remotely. I have recently sent P85 form 16th June 2024. As I am still working for the same employer I did not include details of P45. Will I be able to receive tax refund for the previous years or the new tax code will be amended for the current and future tax years? What is the expected timeframe to receive an answer to P85? Many thanks

Hi Hulya,
For the earlier years it will depend on the information that you have given on the P85. If you gave a leaving date from Spetember 2021, all years will be looked at for any refund.
Thank you.