Working for UK company whilst in Australia - Tax issues

[l2020]

Hi all, 

hoping for some advice! 

I recently relocated back to Australia after a number of years in the UK, I am Aussie PR - my employer in the UK who I have been with for a number of years offered me to keep my job and work remotely from Australia, which I thought was great. 

I was somewhat prepared for the potential that I would likely have to pay double tax for a period of time until i could sort any tax issues out or claim tax back from either the UK or Australia etc, however the reality of the amount they are planning to withhold has really shocked me. My employer sought advice from a tax consultancy firm to work out any tax liabilities and have just advised me the amount that they will be withholding, its 80% of my current take home pay after UK taxes & NI. its a ridiculous amount of money, it just doesn't seem right at all. Before I challenge it with them... or just straight up quit my job I need some professional advice on what i'm able to claim back if anything or advice on if what they are taking is actually accurate.

Any help from someone who has faced a similar situation or has any recommendation for UK/Australian tax expert would be great.  Im aware i should of done more research into this before accepting the offer and leaving the UK, our opportunity to fly out here came sooner then expected so we took it and everything else on the priority list went onto the back burner unfortunately! 

 

[Marisawright]

 @Alan Collett may be able to assist.  

I'd say the problem is that the company has set you up incorrectly.  It's not as simple as just keeping you on the payroll  and sending your pay overseas. 

This is an interesting article which suggests it's a minefield:

https://timelesstime.co.uk/knowledgebase/employing-foreign-workers-abroad/

Here's another:

https://www.taxadvisermagazine.com/article/people-aspect

https://shieldgeo.com/can-you-pay-your-overseas-employee-remotely/

 

 

Edited September 2, 2021 by Marisawright

[Alan Collett]

Very happy to have an initial freebie chat - feel able to send a private message to me at first instance (click on my name to the left of this post).

Article 14 of the UK - Australia Tax Treaty may have a role to play here - it is likely your salary should be solely taxable in Australia given your tax residency status after you've moved to Australia (resident in Australia/not resident in the UK):

ARTICLE 14

Income from employment

1 Subject to the provisions of Articles 17 and 18 of this Convention, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived from that exercise may be taxed in that other State.

However, until the employer gets a different PAYE Coding from HMRC they should simply continue to use the one they're using now.

Best regards.