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Lately, we have received many “complaints” from the self-employed community, and, indeed, it is not the best moment, not only professional but also personal for many. 

However, our team strives to emphasize that there is still always a good part. In today’s article, we want to remind you of the 12 improvements for freelancers you shouldn’t forget. If you can take advantage of one, you didn’t know about, even better.

1. Refund of excess contributions in cases of multiple activities.

When a self-employed simultaneously develops a job as an employee, and the employer’s contributions to Social Security plus those of the worker, together with the contributions to RETA, exceed an amount that is published each year in the Budget Law (for 2020 it had been € 12.917,37), the independent worker has the right to be reimbursed for 50% of the excess, with the limit of 50% of the fees paid to RETA.

Before that, the independent worker had to request the reimbursement of this excess, but with the new regulation, Social Security is the one that must pay the refund for each case before May 1st of the following year.

2. Bonuses for balancing professional and family life linked to recruitment.

Suppose a self-employed decides to hire someone because they need help in their professional activity and thus devote more time to their family. In that case, the freelancer will be entitled to a bonus of 100% of the Social Security payments for a period of up to 12 months (if the contract is part-time, the bonus will be 50%).

The assumptions that entitle you to take advantage of this measure are the following:

1. Taking care of children under twelve years old.

2. Having a relative by blood or kinship up to the second degree, in a situation of dependence, duly certified.

3. Being in charge of a relative, by blood or kinship up to the second degree, with cerebral palsy, mental illness or intellectual disability with a recognized disability level equal to or higher than 33 per cent, or a physical or sensory disability with a recognized disability level equal to or higher than 65 per cent, when this disability is duly certified, provided that this relative does not perform a paid activity.

3. Quota bonuses during maternity leave.

During resting periods for maternity, paternity, adoption, custody for adoption, fostering, risk during pregnancy, or breastfeeding, provided that this period lasts for at least one month, you will be rewarded with 100% of the Social Security payments.

4. Flat rate for self-employed women who rejoin after maternity.

Suppose you have been a mother and you are self-employed. You decide to cease your activity due to motherhood. This measure helps you resume your activity because, in the period of 2 years after the termination, you will benefit from the flat rate, paying 60 € during the first 12 months (in month 13, you will pay the minimum fee again).

Is it mandatory to stop working as a self-employed, that is, to present the Treasury and Social Security deregistration to take advantage of the 12 months at € 60? The answer is NO. 

When talking about “cessation of activity” (and since the regulations do not specify this aspect), we should understand it as the stoppage in activity linked to maternity leave itself, with or without withdrawal from the RETA.

5. Including the in itinere accident as a work accident.

With the current normative regulation, a work accident is the one suffered when going to or when returning from the place of the provision of the economic or professional activity. 

For these purposes, the place of provision shall be the premises in which the self-employed worker usually carries out their activity, provided it does not correspond to their residence and corresponds to the premises, warehouse, or office declared as linked to the economic activity for tax purposes.

In the case of an on-the-road accident (in itinere), the self-employed worker will benefit from incapacity for work equivalent to 75% of the contribution base from the day after the leave.

6. Retired self-employed with hired personnel may charge 100% of their pension.

What is active self-employment retirement?

Active retirement is reconciling the collection of your retirement pension and working simultaneously in an activity on your own.

With the current regulation, if the self-employed retired hires at least one worker, he will collect his retirement pension at 100%.

7. You can hire your common-law partner as a freelance collaborator.

Since the publication of the Law on Urgent Self-Employment Reforms in 2017, self-employed workers can hire a common-law partner as a self-employed partner. 

And what is considered a common-law partnership for these purposes?

The tax rule establishes the following: 

A common-law partner will be considered to be the one constituted, with an analogous relationship of affection to the conjugal one, by those who, not being prevented from entering into marriage, do not have a marriage relationship with another person and prove, through the corresponding registration certificate, a stable and notorious coexistence and with an uninterrupted duration of no less than five years. The existence of a common-law partner will be accredited by certifying the registration in one of the specific registries in the autonomous communities or town halls of the place of residence or by means of a public document stating the constitution of said couple.

As a reminder, the bonus represents a 50% reduction in the Social Security fee during the first 18 months. Then a 25% reduction over the next six months. 

That is applicable as long as they had not been registered in RETA in the immediately previous 5 years and collaborate with the self-employed person by carrying out work in the activity in question.

8. 10% Surcharge for late payment.

Since 2018 the surcharge for entering the self-employment fee after the deadline has been reduced from 20% to 10%. In this way, the surcharge will be 10% as long as you pay the instalment due within the first calendar month following the expiration of the term for your deposit. If you domicile the January instalment on January 31st and do not have sufficient liquidity, if you pay it during the month of February, they will only recharge you 10%.

In 2021 the minimum self-employed fee is € 286.15. Thus, if you are paying it and you are late in the payment, Social Security will charge you € 314.77, as long as you pay it in the following month.

If you are entitled to a bonus (such as the flat rate), you will lose it that month.

9. Deductibility of 30% of supplies if you work at home.

In the cases where the taxpayer partially designates his residence to the performance of the economic activity, the cost of supplies for such residence, such as water, gas, electricity, phone and Internet, shall be regarded as deductible expenses in the percentage resulting from applying 30 per cent to the current ratio between the square metres of the house assigned to the activity in relation to the total surface, except when a higher or lower percentage is proven.

That was one of the claims of the collective of self-employed, to clarify which expenses were or not deductible if you assign a part of your residence to the performance of the activity. Although we now know what we can deduct, the result of applying 30% to the proportional part of the residence assigned to the activity can be minimal. We can see this with an example.

Suppose a computer scientist works from home and has an 18 m2 room set up to exercise his activity. Let’s say his house has an area of 90 m2. Therefore, the percentage of the surface that it allocates to its activity is 20%. What operation will you have to carry out to find out what you can deduct from a telephone and internet bill that amounts to € 145.00 (tax base)?

€ 145,00 x 20% (percentage of m2) = € 29,00 x 30% (percentage established by the regulation)

= € 8,70

To make the correct calculation and deduction, you must consider only the taxable base that appears on the invoice. You can only deduct part of the personal income tax expense, and VAT is not deductible.

You should also know that to apply this deduction, although small is an additional expense and monthly, you must be the supplies owner. Therefore, if you want to take advantage of this measure and you are not the owner, you must modify it.

10. Living expenses of the taxpayer himself.

Suppose you are self-employed and due to the development of your activity you have to eat or spend the night away from home. In that case, you should know the requirements that these expenses must meet to be considered deductible.

1. They must occur in business days.

2. They must be produced in catering and hotel establishments.

3. You have to pay them by any electronic means of payment (card or transfer).

4. You should keep the invoice indicating the day, establishment and amount.

5. You cannot exceed the quantitative limits established by regulation.

– WITHOUT OVERNIGHT: € 26.67 / day (Spain); € 48.08 / day (abroad)

– WITH OVERNIGHT: € 53.34 / day (Spain); € 91.35 / day (abroad)

11. Payment of Social Security fees from the effective day of registration or cancellation (3 times a year)

Since January 2018, the self-employed who registers or deregisters at the end of the month will only pay a self-employed fee proportional to the number of days in the registration situation.

You can apply this measure to the first 3 registrations and the first 3 cancellations within each calendar year. If you need to make a fourth registration during the calendar year, you will have to pay the freelance fee for the entire month, regardless of registration day during the month.

12. Four changes in the contribution base per year

The self-employed can change the basis for which they are obliged to contribute up to four times a year, choosing another within the minimum and maximum limits applicable to them each year. The periods to request these base changes are the following:

1. From January 1st to March 31st. The effective date of the change: April 1st

2. From April 1st to June 30th. The effective date of change: July 1st

3. From July 1st to September 30th. The effective date of the change: October 1st

4. From October 1st to December 31st. The effective date of the change: January 1st of the following year.

There are still many improvements to be implemented in the Self-Employed Regime, such as:

1. Determination of the concept of habituality for inclusion in the RETA.

2. Implementation of a part-time contribution system for freelancers.

3. Establish a progressive fee or a contribution adjusted to income.

Although it seems that the last three measures will make you wait, don’t be discouraged! The previous twelve didn’t appear out of anywhere from one day to the next. 

Let’s remember that in 2010 when we started our journey with e-autonomos.es (our Spanish tax platform), the self-employed didn’t enjoy any of these aids.

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