In this area almost nobody loses money through a wrong decision: they lose it through a decision not taken in time. The deadlines are short, they are not extended and they cannot be fixed afterwards, and the result of letting them pass is not a fine but the loss of an option that was worth thousands of euros. This guide goes through the mistakes we see repeated, with the specific consequence of each one and with what can still be done afterwards.
The logic that links them is always the same: the Seguridad Social, Spain's social security system, rewards the person who asks first and punishes the person who tidies up afterwards.
Mistake 1 · Registering first and asking later
What happens. Registering under the self-employed scheme suspends the benefit under article 271.1.d) of the General Social Security Act (LGSS). From that point on, the pago único, the lump-sum payment of unemployment benefit, can no longer be requested, because the application has to be dated before the activity starts, and that start is taken to be the date shown on the registration application.
What it costs. The whole outstanding amount, turned into a frozen entitlement instead of capital you can use. Someone who had fourteen months left at €1,100 can no longer put more than fifteen thousand euros towards getting started.
What is left. If the registration is less than fifteen days old, the compatibility under article 33 of Act 20/2007 is still open. It is the first question to ask, and the clock is running.
Mistake 2 · Letting the fifteen days pass
What happens. Article 33.1 of Act 20/2007 requires compatibility to be applied for within fifteen days of the start of the activity, and adds that, once that period has passed, the worker cannot take it up. It is not an ambiguous phrase: it is a hard cut-off.
What it costs. Up to 270 days of full benefit received while invoicing. With an average benefit, the difference between receiving it and not receiving it for nine months runs to several thousand euros.
What is left. Suspension, meaning keeping the entitlement for later, with its own time limits. It is better than nothing, but it is what you would have had without doing any paperwork at all.
The period does not count from when someone tells you about it, or from when you find an adviser: it counts from the start of the activity. Someone who registers on a Friday in August and waits until September to deal with it is too late. If you are thinking of registering this month, this is the date to put in your calendar before any other.
Mistake 3 · Choosing a route without checking the exclusion that affects you
What happens. The two active routes rule each other out for twenty-four months. Someone who used compatibility cannot capitalise, under rule 4 of article 34.1 of Act 20/2007; and someone who capitalised cannot use compatibility, under article 33.2. In addition, compatibility excludes anyone whose last job was self-employed and anyone who is going to invoice their former employer or a company in its group.
What it costs. A refused application, with the time lost and, worst of all, with the other route already expired while the refused one was being processed.
What is left. Checking the exclusions beforehand, which costs nothing. This is the part of the work that most often prevents the problem and the part least often asked for.
Mistake 4 · Signing the company deed before looking at the lump sum
What happens. To capitalise by putting the amount into the capital of a commercial company, article 34.1 of Act 20/2007 requires that you will hold effective control of the company and carry on in it a professional activity that falls under the self-employed scheme. It also excludes anyone who had an employment relationship immediately before with that company or with another in its group. A share split that does not comply, or a badly designed board, gets the application refused.
What it costs. Outright refusal, plus the cost of amending a deed already executed before the notary, if there is still time.
What is left. Reviewing the split before the visit to the notary. It is a half-hour conversation that decides an entire file.
Mistake 5 · Not proving what the lump sum was used for
What happens. The lump sum is granted for a use declared in a project report, and that use has to be proved afterwards. Article 7 of Royal Decree 1044/1985 treats failure to apply the money received as an undue payment, and presumes, unless proved otherwise, that it was not applied when the start of the activity and the relevant registration were not shown within the one-month period provided.
What it costs. Repayment of what was received, which is the highest figure on this list because it was paid in one go.
What is left. Keeping, from day one, the invoices, contracts and proof of payment for every euro invested, with their dates. The paperwork is built while the money is spent, not when someone asks for it.
Mistake 6 · Carrying on drawing benefit when you should not
What happens. Invoicing while registered and still drawing the benefit without having applied for compatibility is not a grey area: the benefit should have been suspended and what was paid afterwards is undue. It leads to a claim for the amount received and can also open penalty proceedings under the rules on social security offences and penalties.
What it costs. Repayment in full of everything received since registration, and a penalty whose scope depends on how the conduct is classified. We will not quote a specific article or amount here: it depends on the file, and promising a figure would be inaccurate.
What is left. Reporting the situation on your own initiative as soon as it is spotted. It does not erase what was undue, but it changes the scenario, just as happens in tax matters with voluntary disclosure.
Mistake 7 · Believing you have five years when you have two
What happens. Articles 271.1.d) and 272.c) of the General Social Security Act set two different periods: sixty months for those who register under the self-employed scheme or the seafarers' scheme, and twenty-four months for activities registered with a social welfare mutual fund (mutualidad) that replaces the self-employed scheme. Anyone practising a regulated profession and contributing to its mutual fund has half the margin, and almost never knows it.
What it costs. Extinction of the entitlement instead of suspension. All the outstanding benefit, with no way of recovering it.
What is left. Checking which scheme or mutual fund you are registered with and noting the real deadline. It is explained in suspending the benefit and resuming it.
Mistake 8 · Not applying to resume
What happens. Resumption of a suspended entitlement has to be applied for: it is not triggered by itself when you deregister from the RETA, the self-employed social security scheme. And the article 272 period is also running, which extinguishes the entitlement once six years have passed from the date the benefit stopped being paid without it having been resumed.
What it costs. The months of benefit received late, or the whole entitlement if it is left too long.
What is left. Filing the application as soon as you stop, with the deregistration, registration as a jobseeker and the employment history report (vida laboral). And remembering that without registration as a jobseeker nothing is paid, even if resumption has been granted.
Mistake 9 · Closing before five years and not reflecting it in your tax return
What happens. The exemption for the lump sum in article 7.n) of the Spanish Income Tax Act is conditional on keeping the activity going for five years, or on keeping the share or stake if the money went into an entity's capital or into a cooperative or worker-owned company. Closing earlier is not illegal, but it means that tax benefit has to be clawed back.
What it costs. Income tax on an amount that came in whole and with nothing withheld at the time, plus whatever interest is due if the correction comes late.
What is left. Anticipating it: if closure is on the horizon, the effect is calculated before the income tax season arrives and the decision is taken with the figure in front of you.
Mistake 10 · Relying on information that cites the wrong rule
What happens. A lot of information circulates (on websites, in forums and in the odd leaflet) that places the compatibility of benefit with self-employed work in articles of the General Social Security Act that govern a different benefit, the cessation of activity benefit, and that carries over requirements from wordings that no longer apply, such as an age limit or a ban on having employees. Anyone looking for their requirements there checks conditions that do not apply to them, or assumes they are excluded when they are not.
What it costs. Giving up a route that was open, or preparing a file against the wrong list of requirements.
What is left. Checking the text in force. Compatibility is in article 33 of Act 20/2007 on the Statute of Self-Employed Work (the LETA); the lump sum, in article 296.3 of the General Social Security Act, developed by article 34 of that Act and by Royal Decree 1044/1985; and suspension and extinction, in articles 271 and 272 of the General Social Security Act. We explain it in the guide on compatibility.
The pattern
Almost every one of these mistakes is avoided with the same behaviour: asking before registering and writing two dates in the calendar. The one that opens the fifteen-day period and the one that closes the clock of sixty (or twenty-four) months. The mistake about the tax exemption is avoided by writing down a third one, the fifth anniversary of the lump sum.
If you have already made one of them, the conversation is still useful, because in almost every case there is something left to do and the order in which it is done changes the result. Tell us where you stand through the form for this service, and if you have not done anything yet, start with the three routes.