Business and self-employment

Spanish business life is very different from UK business life. It's almost certain that things are easier and more freewheeling in the UK than in Spain. Our aim was for me to set myself up as self-employed and offer web-design and market research services to local businesses (www.notanant.com and www.dobney.com if you're interested).

For this reason I needed to have an economic status in Spain, and not only that I would like to contribute economically to the country I live in. Having been self-employed and started businesses in the UK, I wanted to go light to start with - keep everything really simple while learning the ropes and formalities, then as work grows you develop into something more structured and complex. This was the way I'd started in the UK.

As ever, we're trying to work our way through the system bit-by-bit (the best way to learn) and since this is light and small scale we're not using a lawyer - this is a perfectly feasible way of operating in the UK when starting out self-employed. In the UK all you need to do is to register with the tax office - you don't even need to register for VAT to start.

In Spain, bureaucracy means life is not as easy for small businesses or the self-employed. There doesn't seem to be a concept of making things easy for the tax payer, or of 'plain spanish' in official documentation (in the UK there's a well established Plain English Campaign which means official forms tend to be very well written).

Whilst it is straightforward to register as an Autonomo, albeit the form is very long, once registered you will be swept along with their social security, VAT and tax systems and will find that that business has more paperwork and more contact with the tax offices than in the UK. Many people end up using a Gestor because the forms are written in jargon, the queues in the offices are long and you can end up being fined for any oversight - there is a sense that everyone is a potential wrong-doer in the system and the system is designed to spot failings, rather than to encourage fair tax-paying by honest folk.

Secondly, making successful contact with Spanish businesses can be difficult (and the prices they pay will be a lot lower than those in Northern Europe or the US). The difficulty with dealing with the bureaucracy means things do happen on the side and for favours - bad bureaucracy encourages bad habits. Hence the need to work with people you know. We're avoiding any deliberate bad practice simply because it's enough hassle to get it right. I hate to think what happens when you start to get it wrong.

This section goes through how we got through the processes of registering to become Autonomo (Modulo 039), what this means for social security and issues such as VAT declarations. For instance for VAT (L'IVA - pronounced liva - you need to know what to listen for at the tax office when talking to people) is due at fixed quarterly dates - January, March, July and October - up to the 20th of the month. VAT has be to sent in via registered post or presented at the tax office, or dealt with online (though you need an eDNI or a certified electronic certificate which is a bit of a pain to get and use). This applies to all businesses so as you can imagine there are queues of business people and their representatives at the tax office every three months.

If you are working by post/face-to-face, unlike the UK you don't get sent any forms - you have to buy them at the tax office - Modelo 039 to register, Modelo 303 for IVA, Modelo 390 for annual return etc etc.

One warning lesson. I actually received no notification that I had been accepted as Autonomo and while twiddling my thumbs waiting for a letter to confirm my status, tax numbers etc was sent a letter informing me that my IVA forms were late. I immediate completed the forms 'sin actividad' because I didn't know it had started.

But the result was that the tax office has sent a further letter saying they are looking to apply a fine for the infraction of missing the IVA date, from which, I ended up being fined for not returning a zero declaration IVA form - not once but twice because it took them 8 months to notify me the forms should have been submitted by which time two had been missed.

Like I said the system is not really set to help honest business people - for instance the information on the Agency Tributaria website is overly complex and legalistic and it's difficult to find the answer to straight-forward questions (like what is a valid VAT expense). The telephone and email helplines are more helpful if a bit narrow in their answers.