UK Employer while living in Australia, will I pay double tax?

Hi I was hoping someone could help me.

I have been working freelance in London for the past 10 years.

I have my own Limited company and have an accountant who works out my tax.

I am moving to Brisbane in October and my plan was to close down my UK business and start one in Australia.

However, I have just had an offer from my current contract,

they want to keep me on in Australia working remotely!!

BUT he would like to employ me full-time on a Salary.

Looking into it I am a little worried I will have to pay Tax in UK and Australia if I am on salary.

Has anyone had similar experiences?

Thanks

You will have to fill out both a British and an Australian tax return, and you'll have to declare your entire income on both - BUT you won't be taxed twice.

Someone will drop in to remind me which one you have to submit first - but whichever it is, you'll show the tax you've already paid on the second one and it will be taken into account.

I'm going to be in a very similar situation, working for a UK company remotely from Australia, so very interested in the response, but I do have a supplemental question: I'm emigrating on a 489 visa, so to apply for a PR visa (887 ?) a couple of years down the line I will need to show employment for at least 12 months in Australia. Will the UK company employment count for this or does it need to be an Australian company employing me?

I believe that as you are working in Australia you will be subject to Australian payroll rules, which basically means the UK company has to run an Australian payroll for you. Some companies have experience in having employees working overseas and will be prepared for the regulations and requirements so you need to check the company that has offered this is aware of what the requirements are. It would probably be easier for them and you if you worked as a contractor and sent in invoices but they may already have an Australian payroll they can add you to.

I believe that as you are working in Australia you will be subject to Australian payroll rules, which basically means the UK company has to run an Australian payroll for you.

Goodness, I missed that bit of the original post.

I would be surprised if the UK employer is aware they'll need to do that, but there is an easy solution - the OP can simply continue to run his own business and invoice the UK client for the work.

Goodness, I missed that bit of the original post.

 

I would be surprised if the UK employer is aware they'll need to do that, but there is an easy solution - the OP can simply continue to run his own business and invoice the UK client for the work.

Perhaps not a viable long term option. OP would need to research the laws, rules and regs etc of being a contractor on a long term basis to one client and see if the self employment rules re if working for longer than X amount of time for one client should then be considered employed and all that. May not be an issue but it could be. Things like getting a mortgage can also prove tricky as generally the 2 year self employed rule is applied. Also paid holiday, public holidays and so on would be better if employed.

I'd think it was easier for the OP to be paid as an employee by the company if they are happy to do so, on a salary that will convert into a decent Aus amount.

Perhaps not a viable long term option. OP would need to research the laws, rules and regs etc of being a contractor on a long term basis to one client and see if the self employment rules re if working for longer than X amount of time for one client should then be considered employed and all that. May not be an issue but it could be. Things like getting a mortgage can also prove tricky as generally the 2 year self employed rule is applied. Also paid holiday, public holidays and so on would be better if employed.

 

I'd think it was easier for the OP to be paid as an employee by the company if they are happy to do so, on a salary that will convert into a decent Aus amount.

The OP won't be able to be paid in pounds from a UK payroll though. They will have to be paid as an Australian employee with Australian income and payroll taxes paid. Unless the company they are to work for have an Australian office or already have people working them overseas they may not be aware of the requirements.

Hi I was hoping someone could help me.

I have been working freelance in London for the past 10 years.

I have my own Limited company and have an accountant who works out my tax.

 

I am moving to Brisbane in October and my plan was to close down my UK business and start one in Australia.

However, I have just had an offer from my current contract,

they want to keep me on in Australia working remotely!!

BUT he would like to employ me full-time on a Salary.

Looking into it I am a little worried I will have to pay Tax in UK and Australia if I am on salary.

 

Has anyone had similar experiences?

Thanks

Would you mind sharing how this worked out for you in the end?

Thanks

This is still ongoing for me, but the long and the short of it is this:

- There is a tax agreement between Australia and UK so if you have paid tax in one country that is deductible from the other country, so you only pay one amount of tax.

- Ultimately you should be paying tax in the country that you reside. There are lots of rules to determine residency for tax purposes, but if you are going to be living permanently in Australia then that's where you should pay tax.

- What should happen, although it takes some sorting out, is that you should notify HMRC that you reside in Australia and they should then issue a NO_TAX tax code to you for your UK employment and you won't pay any tax on your UK income (you do still pay NIC though!).

- Then after June each year you should submit an Australian tax return, declaring the income from the UK, and pay the tax due for the whole year.

Of course this is quite complicated so I would advise using an accountant that has experience of both UK & Australian tax systems to submit your tax returns in both countries.

I hope that helps.

This doesn't address the payrol issue though. They should be paying you visa Australian payrol with Aus tax codes and super.

Yep, there is a double taxation agreement so any tax tax deducted in the UK, you will put as a credit into your Australian tax return.

A couple of relevant queries raised above re Australian payroll tax etc.

The easiest way is for you to continue your own business (either in the UK or Australia) and invoice the client as a vendor. You are then responsible for your being tax compliant in Australia. Much easier and cleaner for your client.

This doesn't address the payrol issue though. They should be paying you visa Australian payrol with Aus tax codes and super.

Sorry but I disagree. The company is a UK company, governed by UK regulations and law. They are employing someone who happens to live outside the UK, but really where the employee chooses to reside is not their concern. The UK company should meet their obligations of paying UK PAYE and pensions (super) and it is up to the employee to deal with the tax matters between the two countries via their tax returns.

If the UK company had an Australian subsidiary then they could pay the employee through that entity with PAYG and super, but that in itself creates a bit of an accounting nightmare.

But those are the rules if you want to do it properly.