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"At this point, it all seems quite straightforward – recruit the non-UK individual, provide them with a UK employment contract and pay them on a gross basis via the UK payroll.
However, if an employee is performing duties in another country it is likely that they will be subject to tax in that country."
So, if I'm doing everything for UK, nothing to do with Spain, then my current HMRC/UK contract stuff should be fine? But then I have to think about the Spain side - do they care if someone lives there but doesn't pay income tax? I mean, that's similar to being unemployed - it's not like I will be claiming benefits but I guess there's services. Is there a way to contribute, like council tax, to the normal societal things?
hippy-
my current HMRC/UK contract stuff should be fine?
I think your HMRC status changes when you move abroad. The SRT rules are at https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3 which will determine your UK status which probably matters when looking at any DTA.
If you were doing it the other way round and were resident in the UK for tax purposes (lived here for more than 183 days) but employed in Spain by a Spanish company then you would have to do things like an HRMC tax return. That doesn't mean there is any extra tax to pay (although there might be) but there would be a chunk of extra paperwork. I think you need to find yourself an accountant that specialises in these things.
jellybaby
This is the kind of thing that needs considering
https://www.hrzone.com/perform/people/employing-people-overseas-tax-and-social-security-considerations
It's doable but does require the employer to be on board with it.