About Sabrina L. Williams

Although I was born in the UK, I moved to the Canary Islands, Spain at a young age and I haven't looked back. The Canaries is a fantastic place to live, I mean you can do all types of outdoor activities practically all year round because of the great weather. Horses are my poison but the islands are also a superb spot for water sports so they do attract a lot of attention from people around the world. Anyway, enough about that. Back in 2011, I made one of the biggest, scariest yet best decisions I'd ever made and set-up my own business in the middle of a recession. I love what I do as no two days are the same, plus Spanish law keeps me on my toes as it is constantly changing (often without warning!) so there is always something new to learn. As I've branched out in the world of Administrative Consultancy, I decided to create a blog to discuss topics of interest to others in my industry and my clients, share tips and experiences, to see what new ideas people have for improving their businesses and the like so I hope you'll find the time to join me on this venture...

Since my last post, we have experienced a rollercoaster both personally and professionally as every aspect of our lives is affected by the lockdown in effect. Spain’s lockdown is so far the strictest and our Government has alerted us that it will be extended once again until 26th March, but that it will more than likely be prolonged even further.

The latest decree that affects sole traders and small to medium businesses, Royal Decree-Law 11/2020, 31st March which was published on 1st April contains a series of measures to provide much needed aid.

DEFERRED PAYMENT OF SOCIAL SECURITY CONTRIBUTIONS: The Social Security Treasury will grant upon request a six-month interest free extension on monthly contributions, which for sole traders will be those due between May and July 2020 and between April and June 2020 in the case of small to medium businesses. The irony here is that this was decided on the same day the Treasury charged March’s contribution to our bank accounts!

The specifics to apply for this aid is to be confirmed, but what we do know is that it applies to those businesses whose activity was not prohibited under Royal Decree 463/2020, 14th March. This measure does not apply to businesses that have suspended employee contracts under the ERTE system. We also know that the applications must be submitted 10 days before the fee is due to be charged which is always the last working day of the month. Although applications will be considered approved, the Treasury has three months to officially respond in case the applicant is not eligible to defer payment.

Deferred payment of any type will only be approved if the applicant does not have prior debts with the Treasury, and as always, penalties apply if they detect false information or fraud. This measure is detailed under Article 34 of this decree.

As mentioned, the contribution for March has already been charged, which means that many sole traders and small to medium businesses who applied for Sole Trader Unemployment will be due a refund.

DEFERRED PAYMENT OF SOCIAL SECURITY DEBTS: Article 35 of the Decree outlines that if any sole trader or small to medium business owner accrues debt with the Treasury for payments due between April and June, they may request delayed payment, but 0,5% interest on the amount would apply. This will only be approved if the applicant does not have prior debts with the Treasury and does not currently have an existing deferment in place. The application must be submitted in the same time-frame as described previously.

UTILITIES: Many businesses had to close their doors from day one of the state of emergency, and the Government has agreed that utility contracts (water and electricity) can be suspended without penalty and that payment of bills that coincide with dates within the state if emergency can be suspended also. However, be advised that should you suspend payment, you may not switch company until payments are brought up to date.

DEFERMENT OF MORTGAGES ON BUSINESS PREMISES: Delayed mortgages was first mentioned in Royal Decree-Law 8/2020, 17th March but only for the applicant’s primary residence, however, this latest decree is extending this financial aid to business owners for premises linked to their business activity as well as landlords (natural persons not companies) who are no longer receiving rental income as a result of measures that apply to tenants. This aid applies to those business owners who are considered financially vulnerable due to suspended activities and loss of income. Conditions obviously apply.

FINANCIAL AID FOR PAYMENT OF RENT OF PRIMARY RESIDENCE: Article 10 of this decree refers to special aid that has been put into place for those who forsee difficulties making rent. If the applicant does not meet the criteria for automatic derferment of rent, this line of credit is for up to 900 euros per month or in some cases 100% of the rental amount if the business owner can demonstrate they are in a vulnerable situation.

The Decree is 88 pages long so this is a very brief summary, but their are other provisions for different circumstances, such as receiving payment from an existing pension plan or signing on for benefits to pay electricity bills in the home if you meet the criteria. There are changes on a near daily basis as the Government navigates the minefield that is COVID-19 and the imposed quarantine.

Stay safe!

Following on from yesterday’s email, Royal Decree-Law 8/2020 was published yesterday to complement Royal Decree 463/2020, 14th March.

The chain reaction the outbreak of COVID-19 as caused throughout the world that initially concentrated in China, interrupting much of the world’s production and manufacturing output has now filtered down to other dependent sectors, affecting export and supply.

We have also seen the direct impact it is having on domestic finances, the closure of schools, the cancellation of public events, flight and other transport bans that have primarily shaken the tourist industry, not to mention the effect on the global stock market. The limitations imposed on us since last Saturday have meant restrictions on freedom of movement, quarantine which have generated incredible issues within the family unit and businesses alike, especially for those families whose income derives from the type of activities that have been temporarily banned by the government.

The government’s priority right now is to minimize as much as possible the impact of this lockdown and facilitate measures to ensure we can all bounce back as soon as the situation improves.

Some of you emailed me yesterday about the new situation and as mentioned in my previous email, I spent the day reading through and clarifying certain points of the decree that were not  so I can summarize its key points to you. If after reading this email, you still have queries or concerns about your situation, please do not hesitate to contact me again. Since there has been no official has been published about Holiday Lets, the only thing I will say at this time is that there is a difference between the types of accommodation being mentioned (hotels, camping and caravan sites…) and self-contained units such as private apartments and villas. Hotels and similar call for groups of people to be attended to in the dining area for example as the rooms are not self-sufficient, so this closure may only refer to these types of accommodation. This is not official as mentioned, only my own deductions, however, if your property is currently occupied, remember, the government is encouraging people to return to their countries of residence until this crisis is resolved mainly because airspace is due to be closed down or greatly reduced.

According to this Royal Decree-Law, the following measures have been approved:

1.- Extraordinary Social Security benefits for closure of business activity for those affected by the declared State of Emergency in order to regulate the health crisis produced by COVID-19:

a) Exceptionally and limited to one month1 from the date in which Royal Decree 463/2020, 14th March came into effect when the State of Emergency was officially announced, those sole traders whose business activities were shut down have the right to these “unemployment” benefits as long as the following criteria is met:

  • To be affiliated and currently registered as a sole trader (Régimen Especial de la Seguridad Social de los Trabajadores Autónomos) or at least on the date the State of Emergency was announced (14th March 2020)
  • In the event, your business activity was not directly shut down by virtue of the above-mentioned Decree, you must provide evidence that your billing during the month prior to applying for unemployment benefits has been greatly reduced by at least 75% in comparison to the average billed over the six previous months
  • To be up to date in payment of all Social Security contributions. If this is not the case, they allow a maximum of 30 days in which to make these payments and access unemployment benefits

1 Unemployment benefits would be extended to the last day of the month in which the State of Emergency concludes, should this situation last more than one month

b) The benefit amount is calculated by applying 70% of the average base rate you have paid over the last twelve months, which is to say, twelve consecutive months and immediately prior to applying. If the applicant has not been registered as self-employed for twelve months, therefore not meeting the normal criteria, the benefit amount applicable would be the equivalent of 70% of the minimum base rate

c) As stated, the duration of this extraordinary benefit is one month, which could be extended to the end date of the State of Emergency, however, this time would be recorded as if you had continued paying into the system as normal, i.e., it does not interrupt your registry as self-employed and it does not reduce the time you may receive this same benefit if you have to apply again in future (for a situation unrelated to COVID-19

d) Receipt of unemployment benefits mean you would not be liable to pay Social Security contributions. For those who continue their business activity, you must pay the monthly contribution as normal

e) Receipt of unemployment benefits is incompatible with any other Social Security benefits

f) Working partners linked to co-operatives will be granted the same rights to access these benefits as long as they meet the requirements established above

IMPORTANT NOTE: The Decree does not mention if this applies to Sole Traders registered as Family Collaborators. I am trying to find out whether they would have the right to unemployment after the principal Sole Trader applies.


2.- Measures to regulate employee contracts to avoid dismissals:

a) There is a system in place for those businesses that have suffered the most severe losses due to forces beyond their control such as this health crisis called ERTE (Expediente de Regulación Temporal de Empleo). What is the definition of forces beyond control in this situation?:

  • Suspension or cancellation of business activities
  • Temporary closure of premises open to the public
  • Restrictions on public transport
  • General restrictions and freedom of movement of people and/or merchandise
  • Loss of provisions that hinder the normal development of the business
  • Contagion within the company
  • When extraordinary measures of preventative self-isolation have been enforced in the company

b) In the case of those businesses that on 29th February had less than 50 employees, Social Security will absorb the business owner’s obligatory payments 100%. In the case of those businesses that on 29th February had more than 29th February had 50 employees or more, Social Security will absorb 75% of the business owner’s obligatory payments. These obligatory payments referred to here DO NOT include the business owner’s own monthly Social Security contribution

c) Employees affected by the ERTE system have the right to receive unemployment even if they have not been registered employees for a full year as normally required by law

d) Businesses that choose the ERTE system are obligated to maintain all employees in the company for at least SIX MONTHS after business activities return to normal

e) Social Security must respond to the application within 5 days

f) Employees who have dependents (minors or elderly) should be permitted to take leave to see to their family in the best way possible, however, employees who are absent from their place of work for unjustified reasons may be dismissed (the proper procedure must be followed)


3.- Business Line of Credit:

The Ministry of Economic Affairs will grant a line of credit to ensure cash flow in affected companies (payment of invoices, financial or tax obligations or other cash flow issues). The maximum amount is 100.000 euros and conditions are being drafted


4.- Extensions for Mortgage Loans:

a) For those who have especially difficult circumstances due to the COVID-19 crisis and are unable to make mortgage repayments on their mortgages, special measures apply for their primary residence only

b) Those debtors that fall under the category of “economic vulnerability” as established in Article 9 of the Decree-Law (or point c of this document) and whose contracts are currently in effect. These same measures apply to guarantors of the debtors

c) Definition of economic vulnerability:

  • The debtor has been made unemployed or in the case of sole traders, has suffered a substantial loss of income or a substantial fall in sales
  • That the total income of the family unit does not exceed the income received in the month prior to applying for the extension
        • In general terms, the limit of three times the monthly Indicador Público de Renta de Efectos Múltiples (IPREM)
        • The above limit will increase by 0,1 the IPREM for each dependent child or 0,15 for each child in a single-parent household
        • The general limit will increase by 0,1 for each family member over the age of 65
        • If any family member has a declared disability higher than 33%, dependent situation or illness that does not permit them to work, the general limit will be four times the stipulate IPREM, regardless of any increases

There is still a little bit of uncertainty about some of these measures as procedures have not been clearly outlined etc., and the Administrations themselves are not entirely sure what the logistics would be, but if you would like to proceed with any of these options, please contact me to discuss how best to move forward. If not, it is business as usual until we all come out fighting the other side.

As always, take care

Spain is on a preventative lockdown to help stop the rapid spread of the Coronavirus throughout the country. As the Canaries are part of Spain, all approved legislation applies to us too. I haven’t posted anything publically since we were officially put on lockdown at midnight on Saturday 14th March 2020 because my primary concern has been for my amazing clients and their businesses, so references to yesterday’s email etc is because of the information they were sent as matters were unfolding. Apologies by the way to my registered monthly clients because you may receive this information automatically again as suscribers to this blog (I will try to stop that from happening), but at the same time, I want to say how in awe I am of all of you because you are handling this extreme situation like troopers even though many of your businesses were the first to be affected by the lockdown. I am really proud to count you as clients and I wish you the very best as you navigate daily uncertainties about the future of your businesses while at the same time many of you are also looking after small children, elderly parents, siblings and dependents. It gives me a glimmer of hope…

Social Security procedures tend to be a hot topic of conversation among business owners, and one that is high up on the list is whether it is better to take out a private pension to complement obligatory monthly payments or to simply increase Social Security payments. As I looked into this matter further, I was taken back to the Law of Urgent Measures for Sole Traders which was approved in 2017.

It’s February and I’m only getting around to uploading my first post of the year. January just does not exist at this office for anything else that doesn’t have to do with quarterly and year end taxes; it’s all a blur to be honest. Besides the obvious tax deadlines, there are always major changes at the start of any year. So far, 2020 has started with a bang. We are still reeling from yet another change in IGIC tax from 1st January (yes, it went from 7% in 2018 down to 6,5% in 2019 and well, why not put it back up to 7% in 2020?!), quarterly and year end taxes, and of course BREXIT and everything that will bring with it.

Anyway, moving on with the topic at hand, we are living in a technological age and Public Administrations are using these aids as a means to check up on our personal situations and whether or not we are complying with our legal obligations as either citizens or business owners. How are they doing this?

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