Contracting as a Ltd Company in the UK - how do I contract best in Oz?

[Lampong74]

Hi All

 

We have just received our PRs (clapping) and move to Melbourne August 2015.

 

I set up a limited company in the UK to contract as a digital IT Project Manager.

I will work as this in Melbourne as well but don't know what I need to do in advance.

If anyone can tell me what I need to do to work as the Australian equivalent of a small ltd company, I'll get on it immediately!

 

Thanks!

 

Lou

[Guest]

There isn't really the equivalent way of working in Australia - you could set up a Pty. Ltd. company but it just doesn't have the same tax benefits as in the UK. I do know people who set themselves up that way but several of them formed a 'consultancy' together which is how they overcame the PSI rules - essentially the equivalent of IR35.

 

https://www.ato.gov.au/Business/Starting-and-running-your-small-business/Income,-deductions-and-concessions/Contractors-and-personal-services-income/

 

You can register for an ABN (Australian Business Number) and you would essentially be self-employed but again there are IR35-like implications

 

https://www.ato.gov.au/Individuals/Working/While-you-are-working/Considering-becoming-a-contractor/

 

I just took the easy option and was engaged by an agency under a Labour Hire agreement and paid PAYE. There probably was better ways but I was already planning on returning to the UK. Under PAYE it is still straightforward to claim a lot of allowances e.g. training courses, books, professional memberships etc.

 

There are umbrella companies similar to those in the UK, here's one example https://www.lester.com.au/index.php?id=74 - I'm not recommending them - I have no experience but they were recommended by Contractor UK.

 

Personally if you are a standard IT contractor - i.e. expect to go daily to an office, use equipment provided and get paid a daily rate I would tread carefully and get familiar with Australian tax law before trying to claim you are exempt from PSI because it would be very hard to argue that you are.

[NickyNook]

Yes. Most IT contractors these days don't bother with setting themselves up as a private company any more.

 

I had one for a few years but the benefits were eventually reduced to so few that it wasn't worth all the paperwork, time and money involved in keeping it going. I wound it up eventually and let an umbrella company take care of my tax and insurances.

 

There are plenty of umbrella companies to choose from.