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SELF-EMPLOYED

Self-employed in Spain: Is it worth applying for the Digital Kit?

Spain's Digital Kit programme gives grants to autónomos and small companies to use for digital improvements. It sounds too good to be true, and there are indications the scheme has its problems. So is it actually worth applying for it?

Self-employed in Spain: Is it worth applying for the Digital Kit?
Is it worth applying for Spain's digital kit? Photo: Photo by Teona Swift / Pexels

Digital kit grants can range from up to €3,000 for sole traders and autónomos with 1 – 3 employees or up to €29,000 for companies with between 100 and 250 employees.

The amount you are given also depends on what type of digital services your business needs.

In theory, this sounds like a great idea, a way to help out struggling autónomos who need to improve their businesses and a way to boost the profits of design and other digital agencies.

In reality, however, the scheme has already faced lots of problems even though it was only introduced in 2022, and many self-employed workers and small business owners are less than impressed.

But is this true for everyone who has been granted the digital kit and is it still worth applying for in 2024?

READ ALSO – Kit digital: How Spain’s self-employed can get money for digital improvements

So what are the problems?

Long waiting times

According to several different articles written by companies and self-employed workers who have applied for the kits, the processing times for the applications are long and in many situations the digital solutions are urgent. This means that companies can’t plan and prepare properly if they don’t know when the aid will arrive. 

Application issues

In addition to waiting times, many people have complained of issues with the applications including applications that have been denied for no specific reasons, applications sent back due to errors (without saying what the errors are), and applications sent back stating missing documentation, even when all paperwork was sent in correctly. Like with any administration process in Spain, it can be frustrating.

More waiting for ‘digitising agent’ to process your needs

Once the digital kits have been granted, there is yet more waiting time for your digitising agent to process your voucher and the requirements you have, so there will be an even greater delay in actually getting the work done.

Large companies taking on the role of digital agents

While some of the problems above are to be expected, one of the worst problems that we’ve come across is that larger businesses such as banks, telephone companies, dentists and even driving schools have been taking on the role of these so-called ‘digitising agents’. They have then been subcontracting the work out to smaller design and IT agencies for a much lower fee, meaning the work is often below standard and you are not being provided with the best services.

Destroying the businesses of small design agencies

In reality, it seems that the programme has had the opposite effect, instead of helping small design, IT and cyber security agencies, it is actually harming them due to the reasons above. They are now having to compete against much larger companies and are being paid a very low rate for the same work. It also means that payment to the actual people doing the work is severely delayed.

What are the positives?

Lots of beneficiaries

According to Red.es, the Public Business Entity attached to the Ministry of Digital Transformation, so far more than 310,000 kits have been granted, which represents an investment of 1.4 billion of the Recovery Plan fund.

This means that already thousands of businesses and autónomos have benefitted from the scheme. All these companies can’t have had a bad experience, because why would people still be applying if they had?

Positive stories

There has already been positive feedback posted online via interviews and videos about various small businesses that have been greatly helped by the digital kit scheme.

One example is Väcka, a vegan cheese company based in Barcelona with between 8 – 12 employees.

They said they used to do all their accounting on Excel sheets and the digital kit allowed them to be able to do everything more efficiently and automatically. They also said that they now have a new website which makes it easier for their customers to make purchases and have a better user experience.

Rentkayaksup is a small watersport business organising excursions along the Costa Blanca. It specialises in renting kayaks, SUPs and pedal boats and has between 25-30 employees.

With the help of the digital kit, they managed to implement a digital reservation management system and improve customer satisfaction. They now also plan on increasing their social media presence through social media management, which the kit can also help fund.

So is it worthwhile?

The truth is that the application process can’t really harm you or your business, it may be frustrating and take a long time, but if it’s granted then it has the chance to be beneficial. If you need urgent solutions, howerver, you many want to look elsewhere. 

Whether the quality of the work and the service is poor or not remains to be seen as different companies have reported different outcomes. If you hardly have any online presence at all, even just a basic website may be able to help you, but if you need something more sophisticated, then you run into more issues.

Again, not much harm can be caused. If you don’t like the website the professionals create for you, or you don’t think the social media is being managed efficiently then you can always choose not to use them and pay for these services yourself.

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For members

WORKING IN SPAIN

What’s the law on having two jobs in Spain?

With the current cost of living crisis, working more than one job is becoming more and more common, but what are the rules on working multiple contracted jobs in Spain and the tax implications of this?

What's the law on having two jobs in Spain?

Often it’s necessary to have more than one job at a time, particularly if they don’t pay well and you’re struggling to make ends meet.

In fact, historically that is part of the reason why establishments stay open so late and why siestas were so common – because people would have one job in the morning and then go home for a rest before starting their second.

This is still commonplace today and is in fact becoming more and more popular, with the rise in the cost of living, driving an increasing number of people to take up a second job.

Whatever your reasons for having two jobs or more – to save up more money or gain extra experience and work your way up, there are some financial implications you should be aware of.

What does the law say?

Currently in Spain, there is no restriction that prevents a person from having a second job, with two contracts in two different companies, for 80 hours a week.

According to data from the first quarter of this year from the Active Population Survey (EPA) prepared by the National Institute of Statistics (INE), the number of people with a second job in Spain stands at 591,300, although according to affiliation data of Social Security, some 800,000 people have more than one position.

This trend has been seen in each quarter of the EPA since 2022 and, right now, is close to a historic number.

Categories you should be aware of

There are two types of categories when you work in multiple jobs in Spain – these are pluriempleo and pluriactividad. Pluriempleo literally means multiple employment. This is understood as a person who works as an employee in two or more companies under the same Social Security regime.

In this way, it differs from pluriactividad or multiple activities, which is when people work for others and have their own business at the same time or their second job is under a different social security regime.

For example, if you work as a hotel receptionist in the morning and then in a restaurant at night, these positions are considered to be part of the same regime, but if you work in a hotel in the morning and then as a nurse in a hospital at night, these are two different careers and therefore social security regimes.

If you’re self-employed as well as having a contract job, this is a slightly different situation. To find out more, read our guide below. 

READ ALSO – Self-employed in Spain: What are the tax rules if you do two or more jobs?

What are the tax and social security implications?

If you have two separate jobs, you are required by law to report your situation to Social Security, and to each of the companies you’re employed by.

When it comes to the Tax Agency, it’s important to note that you are obliged to submit your yearly Income Tax return (Renta), when you are paid by more than one employer and your income exceeds €22,000 per year.

READ ALSO – EXPLAINED: The key changes to Spain’s 2023/2024 annual tax return

In 2024, the maximum social security contribution base for employees has been set at €4,720.50 per month. This means, that regardless of whether your income from two positions exceeds this amount, the social security base will not be more than this.

The amount of IRPF (Personal Income Tax) must also be taken into account. If you are combining two contracts, it’s important to calculate the withholding tax.

This is because companies calculate personal income tax based on your annual compensation expectations. They do not take into account the existence of another job, so they apply the discount depending on what they are paying you only.

This means that they will keep less than what they should and when you’re filling out your Renta yearly income tax return, you will most likely have to pay the extra to make up the difference. 

In this case, you should request that both companies calculate personal income tax according to your earnings, so that you can get a good idea of the amount you have to pay working two positions.

You may also consider hiring a gestor or accountant to file your yearly tax return for you if you have a particularly complicated situation and work three or more jobs for example. 

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