Consulting for UK company from Australia

[ABG]

When I arrive in Aus in the couple months, there’s a good chance I’ll be doing some consulting for my current employer. What’s the best structure to do this based on anyone else’s prior experience? I was thinking Aus Sole Trader business licence rather than setting up a Pty Ltd. This sound right or would doing it through a UK Ltd be better? My leaning towards Aus business was that having demonstrable local income would be helpful for getting rental properties etc, plus the fees would be AUS$ denominated and so I wouldn’t be exposed to FX fluctuations. If this is the way to go, can I register for an ABN offshore?

[Ferrets]

4 hours ago, ABG said:

 

When I arrive in Aus in the couple months, there’s a good chance I’ll be doing some consulting for my current employer. What’s the best structure to do this based on anyone else’s prior experience? I was thinking Aus Sole Trader business licence rather than setting up a Pty Ltd. This sound right or would doing it through a UK Ltd be better? My leaning towards Aus business was that having demonstrable local income would be helpful for getting rental properties etc, plus the fees would be AUS$ denominated and so I wouldn’t be exposed to FX fluctuations. If this is the way to go, can I register for an ABN offshore?

Hi there,

I used Randstad as a local company to contract back overseas on arrival.

Worked easier than setting up a formal structure and still showed local income.

Good luck!

[ABG]

Revisiting this topic again....

So I am going to be working as a consultant for my previous employer and possibly some of that company's customers.  I'll be working as a consultant to the company(s), doing contract business development and helping them develop and launch products across APAC. 

@Ferrets, can you expand a bit on Randstad you mentioned before as when I google them I come up with a recruitment agency. 

The other options are operating either as a sole trader or a Pty Ltd.  My projected annual turnover will be above the GST threshold and also beyond what I think is the 'magic number' where paying corporation tax is more attractive than personal income tax.  That makes me lean towards operating through a company, but then I'm not certain yet what all the additional costs are for the paper work to maintain a company.  Does anyone have a ballpark figure for this? If it helps, the company will be a one-man band (me), with a part-time employee to help with paperwork (my wife).  Added complexity is if I operate as a sole trader with an extra employee, how does that impact the 'magic number' threshold? The business will be a home-based business.

[NickyNook]

Most contractors nowadays (IT related ones, anyway) would work via a Contractor Management company. The ATO closed most of the contractor tax loopholes many years ago and for many contractors it's not worth the hassle of setting up and/or paying the ongoing costs of maintaining a Pty Ltd company.

The Contractor Management company I used back when I was a contractor was http://www.cxcglobal.com.au/contractors/contractortype/ but there are many others. I suspect that Ranstad would do something similar for their contractors as would many other Employment agencies. The link above explains the different types of contractor arrangements that are possible and also the pros/cons of each. 

If you believe that you'll be better off working via your own Pty Ltd  company - and pass all the Personal Services Income tests (which many contractors do not)  - then you'd need an accountant to set it all up. 

[ABG]

13 hours ago, NickyNook said:

Most contractors nowadays (IT related ones, anyway) would work via a Contractor Management company. The ATO closed most of the contractor tax loopholes many years ago and for many contractors it's not worth the hassle of setting up and/or paying the ongoing costs of maintaining a Pty Ltd company.

The Contractor Management company I used back when I was a contractor was http://www.cxcglobal.com.au/contractors/contractortype/ but there are many others. I suspect that Ranstad would do something similar for their contractors as would many other Employment agencies. The link above explains the different types of contractor arrangements that are possible and also the pros/cons of each. 

If you believe that you'll be better off working via your own Pty Ltd  company - and pass all the Personal Services Income tests (which many contractors do not)  - then you'd need an accountant to set it all up. 

Thanks, very helpful.  I believe I do meet the PSI tests as I will be providing all the equipment etc to provide the services and will be liable if things go wrong.  I think I'll probably go as sole contractor for initial contracting, and then amend as appropriate after I've spoken with an accountant when I arrive.

[sm02fly]

Hi, I hope your move has gone well.

What company/contractor structure did you take in the end? I've looked at this many times and I am still uncertain of the best option, so would be interested in your experience.

[ABG]

I ended up going Pty Ltd for liability reasons. I’m not yet out of the PSI trap so not getting any significant tax advantages. But I’m working on it! The advice my accountant gave me is that once I’ve escaped PSI, the optimal structure is to establish a family trust, and have the Pty Ltd as the trustee. The trust reports to tax office, but contracts etc go through the company. Eligible family members are set up as beneficiaries of the trust to get the most tax benefits. TBH, I didn’t really follow him but apparently it’s the best strategy [emoji38]