Life in Culebrón

Nearly everyone who lives in Spain has to do an IRPF, income tax, return each year; the declaración de la renta. Before Brexit, some Britons argued they paid their taxes in the UK and didn’t need to pay in Spain. While there may be rare exceptions, in general, if you live here, you pay income tax here. Many Britons living in Spain are also taxed in the UK, for example, on Government Pensions (ex-teachers, ex-military and the like). However, thanks to a bilateral tax agreement between Spain and the UK, the income that is taxed in the UK isn't taxed again in Spain. People, living in Spain, with an income below 22,000€ from just one source, and paying tax on that income, don't need to file a tax return. If the income is below 15,000€ the income can come from two sources but the second income can't be more than about 2,000€. These figures change each year, but they are roughly accurate for now. So, it’s not easy to avoid doing a declaración. It's not a particularly onerous,...

The Spanish tax year runs from 1st January to 31st December. Sometime around the end of March, or the beginning of April, the tax process begins and people have till June to either put in their claims for reimbursements or pay up what they owe. I still do a bit of part time work and I have some income from a Teacher's Pension so I have tax to pay. For years I did my own tax return by either going to the local tax office or doing it online. A few years ago it all got a bit more complicated because there were rule changes about the taxation of overseas pension income. Well that and that I'd been evading tax just a little. HM Revenue and Customs dobbed me in to the Spaniards and told them about the 300€ or so I get each year from a tiny AVC pension fund. Pedro, a nice accountant in Molina de Segura sorted it all out for me and I stuck with him the next tax year too. Last year though I went back to doing it myself and ended up with a tax bill of about 1,200€ which was a bit of ...

Today is the first day that we Spanish tax payers have been able to sort out either under or over payments in the 2016 tax year. The Spanish tax year is the calendar year. Everyone, resident in Spain, who earns over 22,000€ or has more than one source of income, has to make a tax declaration. If you earn money from more than one source you don't need to make a declaration if you earn less than 12,000€. The declaration is on worldwide income. What happens is that the tax office, Hacienda to you and me, sends out a thing called a borrador, a draft assessment. Once you are on the website you can check if the borrador looks fair enough. If you have just one job with one salary and things are pretty much as they were last year you may have to tweak a few things but, chances are, that the borrador will be close to the truth. For quite a few years all I did was to have a quick scan and press the accept button because Hacienda usually sent me back a few euros. If your situation is a ...

I don't really mind taxes. That doesn't mean that I like handing over my hard earned but I approve of the idea. I'm much keener on the model where we pay the taxes and, with them, our governments attempt to provide healthcare, education, infraestructure and all the rest than I am on the model where everyone looks out for themselves and to hell with the rest. Anyway. For the past six years or so I've been getting a pension from a final salary pension scheme that I paid into for most of my UK working life. Because that money comes from a quasi government source the agreement between Spain and the UK was that it was exempt of Spanish taxes but taxed, at source, in the UK. Normally Spanish residents have to pay tax on their worldwide income here. In reality my pension is so small that it has never exceeded the personal UK allowance so, although Customs and Revenue send me coding notices and I get P60s and what not, I don't actually pay any tax on it. I also have a p...

I got a letter from the tax people yesterday. Now letters from the tax people are not written in normal, everyday Spanish. They are Brontesque in style. With the envelope ripped open and the single page scanned it looked bad. There were lots of words I didn't understand but it was clear that the Revenue, Hacienda, were unhappy about the tax I'd paid on my pension. Tax people can be nasty. Tax people take your house and send you to prison when you're naughty. Unless of course you are very, very rich in which case they are extremely nice to you. I explained my situation last year in a post on Life in La Unión  Just a quick recap. Normally, if you are a Spanish resident, your worldwide income is taxed in Spain. However, I have a local government pension from the UK and there is an agreement between Spain and the UK that government pensions are taxed at source, in the UK. So far so good but where I turn into Al Capone is about my additional voluntary contributions. They pr...