Q&A: Understanding the rise of Spanish tax demands in the UK

HMRC’s intensified enforcement of Spanish tax debts in the UK has become a pressing concern for British taxpayers.

Although the UK no longer participates in the EU’s mutual assistance in the recovery of debt (MARD) arrangement for post-Brexit liabilities it still applies to debts incurred before Brexit. Under this framework the Spanish Tax Agency (AEAT) may request HMRC to collect unpaid debts. Cross-border enforcement continues under the 2013 Spain-UK double tax treaty and the OECD’s Convention on Mutual Administrative Assistance in Tax Matters (MAATM).

With more than one million UK property owners in Spain the AEAT aims to collect all pre-Brexit debts before the statute of limitations expires. In Spain tax obligations generally lapse after four years unless the authorities extend this by issuing formal notices. Once that period elapses without valid interruption the debt is unenforceable.

In past years they have issued numerous...