Rickie Posted December 8, 2016 Share Posted December 8, 2016 Hi there, I was just looking for some advice, I think I have a complex issue, I have moved to Australia last month, I married an Australian Citizen and am here on a provisional Partner Visa, which should turn into a Partner (Permanent) Visa in June 2017. Although I have moved to Australia I have managed to keep my UK job as I can do my work remotely via the Internet, As it stands I am still getting paid into my UK bank account and I am a PAYE employee with the TAX and National Insurance being deducted automatically by the UK tax authorities, I've only been paid once since being here but when I did I just transferred my wages (after Tax, NI & Pension were deducted in the UK) to my Australian bank account which I set up with the Commonwealth Bank. My job now want to re negotiate my contract and have offered to pay me into my Australian Bank account, they want me to negotiate my wage with them, My contract will also end with them and they want me to continue working for them as a contractor, this will mean the company I work for will no longer have to pay National Insurance or Pension contributions, I'm assuming they do end up paying me direct into my Australian Bank this then by-passes HMRC altogether and I would have to be registered as self employed here and be responsible for declaring that income coming into my Australian account to the Australian Tax authorities. My question is am I considered a resident on the Visa I have, I checked my VISA status and it says length of my visa is indefinite. I want to know if I'm going to be taxed as a foreign resident or a normal resident, This makes it hard for me to negotiate my wage with my company if I don't know what rate of tax I will have to pay here. What ever figure I negotiate on I will have to take Tax out of here in Aus but there is other things like "super" my UK company will no longer be paying me a pension and I will be a contractor, there for I'm guessing they do not have to pay any super for me and I wouldn't even know how that would work, Do i Negotiate slightly more saying I don't have a pension anymore and I'm going to have to pay into a Super fund out of what ever salary is agreed apon too? I used the simple tax calculator on the ATO website to get a rough Idea how much tax ill be paying but for the first year I would of only been here 6 months of the tax year and for the first 2 months of that my income was being taxed in the UK, so is the tax rate higher? and I still don't know if ill have to pay the higher foreign rate of tax? Any advice would be greatly appreciated, I have applied for a TFN number but that will take 28days to arrive and what do I do after it does, plus my company want to negotiate with me in the next couple of days, basically I need to come up with a figure that takes all these things into consideration and put it to them and see if they accept it, they will already be saving money as they will no longer be paying NI or pension contributions, I just don't know what to do yet. Many Many thanks Regards Rickie Link to comment Share on other sites More sharing options...
Diane Posted December 8, 2016 Share Posted December 8, 2016 I can't help a lot, but I think if you are working as a contractor (subcontractor?) you may need an ABN instead of a TFN. A TFN is what you give to an Australian employer, but if your employer is not Australian, you will need to get an ABN for your tax reporting and stuff...I think! Link to comment Share on other sites More sharing options...
Rickie Posted December 8, 2016 Author Share Posted December 8, 2016 OK thanks Diane, Ill look into ABN numbers too, thanks for the heads up Regards Rickie Link to comment Share on other sites More sharing options...
rammygirl Posted December 8, 2016 Share Posted December 8, 2016 Tax residency is independent of visa status. If you are living in Australia and intend to stay you need to pay tax on your worldwide income to the ATO. You need to let HMRC you are no longer resident, you could be due a tax refund. I am not sure but the UK employers need to comply with ATO rules. I think you need to consult an accountant. Link to comment Share on other sites More sharing options...
Guest Posted December 8, 2016 Share Posted December 8, 2016 If you are contracting then won't you be self employed and therefore billing them for the hours you work etc? And paying your own pension, tax etc on the Aus side? IIRC you'll need an ABN. You'll probably need to be be working out how to invoice them each month for them to pay you. I think you can have pounds paid into a UK bank account and then transfer it over or see how an Aus $ invoice works and they pay it to your Aus bank account. You will be taxed as an Australian resident then. Its pretty straightforward from what I seem to remember. My husband worked as a self employed contracter to a UK company for a year or two when we moved here. Just get yourself a decent accountant for your year end, research the home office stuff and what you can claim for working from home etc if self employed. Link to comment Share on other sites More sharing options...
Bungo Posted December 8, 2016 Share Posted December 8, 2016 Hi there, I was just looking for some advice, I think I have a complex issue, I have moved to Australia last month, I married an Australian Citizen and am here on a provisional Partner Visa, which should turn into a Partner (Permanent) Visa in June 2017. Although I have moved to Australia I have managed to keep my UK job as I can do my work remotely via the Internet, As it stands I am still getting paid into my UK bank account and I am a PAYE employee with the TAX and National Insurance being deducted automatically by the UK tax authorities, I've only been paid once since being here but when I did I just transferred my wages (after Tax, NI & Pension were deducted in the UK) to my Australian bank account which I set up with the Commonwealth Bank. My job now want to re negotiate my contract and have offered to pay me into my Australian Bank account, they want me to negotiate my wage with them, My contract will also end with them and they want me to continue working for them as a contractor, this will mean the company I work for will no longer have to pay National Insurance or Pension contributions, I'm assuming they do end up paying me direct into my Australian Bank this then by-passes HMRC altogether and I would have to be registered as self employed here and be responsible for declaring that income coming into my Australian account to the Australian Tax authorities. My question is am I considered a resident on the Visa I have, I checked my VISA status and it says length of my visa is indefinite. I want to know if I'm going to be taxed as a foreign resident or a normal resident, This makes it hard for me to negotiate my wage with my company if I don't know what rate of tax I will have to pay here. What ever figure I negotiate on I will have to take Tax out of here in Aus but there is other things like "super" my UK company will no longer be paying me a pension and I will be a contractor, there for I'm guessing they do not have to pay any super for me and I wouldn't even know how that would work, Do i Negotiate slightly more saying I don't have a pension anymore and I'm going to have to pay into a Super fund out of what ever salary is agreed apon too? I used the simple tax calculator on the ATO website to get a rough Idea how much tax ill be paying but for the first year I would of only been here 6 months of the tax year and for the first 2 months of that my income was being taxed in the UK, so is the tax rate higher? and I still don't know if ill have to pay the higher foreign rate of tax? Any advice would be greatly appreciated, I have applied for a TFN number but that will take 28days to arrive and what do I do after it does, plus my company want to negotiate with me in the next couple of days, basically I need to come up with a figure that takes all these things into consideration and put it to them and see if they accept it, they will already be saving money as they will no longer be paying NI or pension contributions, I just don't know what to do yet. Many Many thanks Regards Rickie Do not confuse visa status with tax status, they are not the same thing. You are tax resident in Australia. Your company are correct to want to renegotiate the terms of your contract, they are incurring employer NI that they do not need to pay as you are not a UK based employee any longer. Ideally you and they would have looked into his before you moved as you also have incurred NI that you didn't need to pay and probably will not manage to get back. That at is because all of your employment income is taxable in Australia, from the day you arrived. That you have paid UK tax on it is irrelevant to ATO as they have first dibs on the tax from your employment. You should look to get tax back from HMRC. I would suggest the easiest way to do that would be through adjusting the employment income reported on your tax return to HMRC at the end of the year. When you prepare your Australian tax return you need to included these first two months of income gross and pay Australian tax. In terms of negotiating, well yes it would be sensible to factor in pension and the loss of any other benefits you had previously. I would also research the job market and provide evidence of salaries for similar jobs. My main advice is not to put any emphasis on the current exchange rate because it does not reflect respective purchasing power, that is £1 in UK will go further than $1.69 in Australia. On average you would need at least $2 for every £ you think your would need to make up for current salary and lost benefits. I would focus on those types of things and not get too hung up on tax rates. Although Australia has different bands and personal allowances, on the whole, most people end up with a very similar effective rate of tax whether in Australia or UK. Certainly it doesn't differ so much as to be something you need the spend a lot of time on. ETA: Sorry just realised you are probably negotiating a rate based in £? In which case my comments on $ are irrelevant, although personally, I would prefer to negotiate in $ so that I know exactly what I am getting. Link to comment Share on other sites More sharing options...
Rickie Posted December 8, 2016 Author Share Posted December 8, 2016 Thank you so much for taking your time out to give me such a detailed response, I really appreciate it, You make a lot of good points and have given me a lot to think about and look into, I did not realize that Australia had first dibs on the tax and this could mean I end up being double taxed if I didn't claim back the tax from HMRC, Thanks again, I certainly come to the conclusion there is a lot I don't know about the Tax systems in both countries and for my own piece of mind and so I don't fall fowl I will get some extra advice from an accountant, once again thank you for the info you provided. Link to comment Share on other sites More sharing options...
Rickie Posted December 8, 2016 Author Share Posted December 8, 2016 Thank you, "Just get yourself a decent accountant for your year end, research the home office stuff and what you can claim for working from home etc if self employed" I will certainly be meeting with an accountant, thank you for your response. Link to comment Share on other sites More sharing options...
Guest Posted December 8, 2016 Share Posted December 8, 2016 If you are considered a PSC then you will be taxed 'as if' employed and rather than a ABN an umbrella type company may be the easier option. Lots to choose from the best thing is to ask on forums for your industry as umbrella companies tend to specialise. Lots of debate as to which is most beneficial - I've done both in the UK, and in the UK strongly believe a Ltd. Co. is best but in Australia I opted for an umbrella company as the tax benefits for PSC's are limited. i do know contractors that banded together in 'consultancies' to get around the PSC definition but that requires knowing people you can trust and I expect that only comes after living there a while. As for what salary to ask for, forget what you're on now, forget how much tax etc. you'll pay and find the going rate for your skills in the place you live - look here http://au.hudson.com/salary-hub/salary-guides Link to comment Share on other sites More sharing options...
Guest Posted December 8, 2016 Share Posted December 8, 2016 Thank you so much for taking your time out to give me such a detailed response, I really appreciate it, You make a lot of good points and have given me a lot to think about and look into, I did not realize that Australia had first dibs on the tax and this could mean I end up being double taxed if I didn't claim back the tax from HMRC, Thanks again, I certainly come to the conclusion there is a lot I don't know about the Tax systems in both countries and for my own piece of mind and so I don't fall fowl I will get some extra advice from an accountant, once again thank you for the info you provided. make sure the accountant is qualified in both U.K. And Australia tax - we used Alan Collett of GmTax - he Posts on this forum. Link to comment Share on other sites More sharing options...
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