The new Self-Employed Workers Act will introduce changes that will affect this type of worker. Some of them will come into force with the publication of the new regulation in the BOE , before the end of the year. However, the rest of the modifications will come into force from 2018.
At Femxa we are aware that these changes will affect one of our main types of users, the self-employed. If you belong to this sector or are going to register as self-employed this year, I recommend that you consult this post to be aware of all the changes.
Following the approval of the new Self-Employed Workers Act in the Senate, these workers will be able to benefit from the “flat rate” for one year, gain flexibility in their contributions and increase hiring, among other benefits.
According to data provided by the Social Security, there are currently more than three million self-employed workers in Spain . This law that comes into force introduces numerous fiscal and labor improvements for this group. By not including any amendments, all the measures that the self-employed have been demanding for some time will begin to be implemented in different phases.
In this package of new measures , the most important ones come into force from 1 January 2018. These are the measures related to taxation, contributions as self-employed workers and the extension of the so-called “flat rate”. On the other hand, the rest of the reforms, those related to maternity or retirement of these workers, will be in force according to sources from the Association of Self-Employed Workers (ATA) before the end of this year.
Let's see what are the most notable measures introduced by this new law:
Extension of the “flat rate”: This is undoubtedly the star initiative . New self-employed workers , or those who have not been registered as such in the last two years , and who now register as self-employed, will be able to enjoy a one-off payment of 50 euros in Social Security contributions for twelve months. This represents an extension of half a year with respect to the period during which they enjoyed this reduction until now. What remains the same is the gradual increase in the contribution based on the time that passes since the entrepreneur opens the doors of his business. In addition, the new law will reduce the period necessary to enjoy the flat rate again after having interrupted the activity. That is, in order to be able to start a business paying a contribution of 50 euros, it will no longer be necessary to wait five years as was the case before, but the period is reduced to three years from the end of the activity.
Flexibility and changes in the contribution base: This new measure provides flexibility for self-employed workers to register and deregister with Social Security up to three times a year with the right to pay from the same day the procedure is carried out. Until now, if a self-employed person registered, for example, at the end of one month and deregistered at the beginning of the next, they were obliged to pay the Social Security the full contribution for both months, even if they had only worked for a few days.
Elimination of late fees: Difficulties in balancing income and expenses often result in self-employed workers not paying their Social Security contributions on time. Before the reform of the law, this delay was penalized with a fine of 20% of the amount owed, provided that the payment did not take more than a month to be made and it was the first time that a delay had occurred. Thanks to this new measure , this penalty percentage will be reduced by half, to 10% . This will mean significant financial relief, but be careful, because it must be taken into account that late payments to Social Security will also cause the loss of bonuses. That is, a self-employed person who is late during his first month of activity will not be able to enjoy the flat rate.
Tax deductions for teleworking: It is becoming more common for self-employed people, depending on the work they do, to set up their workplace at home. Although this practice can have numerous advantages, when it comes to deducting certain expenses from the Treasury, it was not entirely clear what percentage of the electricity, water or Internet bill was for personal use and what for professional use. With the new reform, new measures are introduced to help measure the deductible percentage of our bills in the event that we work from home.
Bonuses for hiring relatives: Relatives of self-employed workers (whether spouses, common-law partners or relatives of self-employed workers by blood up to the second degree inclusive) who register as self-employed workers and collaborate with them receive a 50% bonus on the minimum fee for 18 months and 25% for the following 6 months. Lastly, the possibility for self-employed workers to hire their children over 30 years of age with special difficulties as employees is extended to those with physical or sensory disabilities with a recognized degree of disability equal to or greater than 33% and less than 65%.
Family conciliation: To encourage conciliation, the age of dependent minors is extended from 7 to 12 years , which gives them the right to obtain recognition and benefits in the payment of their family conciliation fee. Thus, self-employed workers who find themselves in this situation, who accept a reduction in their working hours and are replaced by hiring another worker, can receive a 100% bonus on their Social Security contribution for 12 months.
Maternity support: As of March 1, 2018, maternity and paternity benefits will be 100% of the regulatory base resulting from dividing the sum of the contribution bases for the six immediately preceding months by 180 (or by the number of days of active employment if there are fewer).
Accident “ in itinere ”: This measure is aimed at all self-employed workers who have to travel every day to carry out their activity. This initiative aims to protect them from any incident they may suffer on the way from home to the workplace . Thus, by considering incidents of this type as an accident at work, 75% of the benefit will be applied from the day after the sick leave.
Improvement in hiring: Until now, when a self-employed person hired a worker, he or she lost most of the bonuses he or she was enjoying at that time. However, with the entry into force of the new reform, the entrepreneur will be able to hire workers while maintaining the help with contributions and the flat rate. On the other hand, self-employed people who hire their relatives (parents, siblings, spouse, children, sons-in-law and daughters-in-law) as permanent employees will be entitled to a total bonus on Social Security contributions. The only requirement to be able to access this bonus is not having dismissed anyone unfairly in the twelve months prior to hiring.
Greater institutional participation: with the entry into force of the Law on Urgent Reforms of Self-Employment, a one-year period will open for the Government to accommodate the main organisations of the sector in the Economic and Social Council. This will fulfil one of the main demands of the sector.
It is very possible that you are considering registering as a freelancer to be able to be your own boss or simply to be able to invoice your work. If so, there are a couple of aspects that you should take into account before launching into your own business:
The first steps to start and register as self-employed are the simplest and quickes telemarketing leads usa dattelephone numbera t if we decide to carry out an economic activity on our own. However, it is necessary to carry out certain administrative procedures that we must be aware of.
The first of these is to register as a self-employed worker with the Treasury. We must present the census declaration forms (forms 036 and 037) , in which apart from including our personal data, we must indicate the activity we are going to carry out, the location of the business and the taxes to be paid. Within thirty days of our visit to the Treasury, we must register with the Special Regime for Self-Employed Workers (RETA) of the Social Security. To do this, we must present form TA0521 to one of the Social Security administrations together with our photocopy of the DNI and the photocopy of the registration with the Treasury. Finally, if we wish to start a business, we must also request an opening license from the City Hall of the town where it will be established and notify the corresponding labor organization of the opening.
ESTABLISH YOUR OWN BASE
One of the main advantages that self-employed workers have is that they can establish their own tax base , equivalent to their salary, to make payments to Social Security. This causes more than 85% of self-employed workers to choose the minimum allowed , which is 849 euros for those under 49 years of age. But be careful, choosing the lowest amount can be a mistake, since, in the event of sick leave or an accident at work, the amount that we will receive will be a percentage of our base. Between the 4th and 20th day of sick leave, we will receive 60% of the amount on which contributions were being made, from the 25th day, this percentage will increase to 75%. Finally, this base established by the self-employed will serve as a reference to determine their income from maternity and retirement.
OTHER TAXES VAT AND PERSONAL INCOME TAX
Every quarter, self-employed workers must make the corresponding payments for their VAT and IRPF . In the case of IRPF , the amount that we must pay is in proportion to the income obtained , the payment system is not unified so there are important differences depending on whether we contribute to one community or another. Self-employed workers must complete a book of issued invoices that will allow them to pay the VAT . Although the general rate is 21%, there are exceptions such as 10% for sectors such as hotels, restaurants or agricultural goods or 4% for food, medicines or books.