Tax implications of UK based job but living in Australia

[Amv88]

Hi, I am in the process of being offered a contracting job with a UK Company. They’ve told me that when I move to Australia in may 2022 I will be able to continue to work for them. Now I have never been a contractor in the UK before and I’ve heard that Australia has worldwide tax. I don’t plan on doing this job long term. Most likely towards end of 2022 but am unsure if I should take the opportunity (which will be life changing) because of potentially being taxed in both countries. Any advice would  be beneficial thank you 

[Marisawright]

19 minutes ago, Amv88 said:

Hi, I am in the process of being offered a contracting job with a UK Company. They’ve told me that when I move to Australia in may 2022 I will be able to continue to work for them. Now I have never been a contractor in the UK before and I’ve heard that Australia has worldwide tax. I don’t plan on doing this job long term. Most likely towards end of 2022 but am unsure if I should take the opportunity (which will be life changing) because of potentially being taxed in both countries. Any advice would  be beneficial thank you 

You will have to declare your income on your tax returns in both the UK and Australia, however you won't be double-taxed.  There's an agreement between the two countries and they'll offset the tax.  Much more of an issue, though, is how the company sets you up.  Recently, someone else posted who'd done the same thing, and ended up losing a huge amount of their salary.

I suspect you would have to terminate your existing contract with them, then set yourself up as a Sole Trader in Australia with an Australian Business Number, then they can hire you again through that entity.  However it's a bit of a minefield so it would be worth paying for some advice from an expert.   @Alan Collett might be able to help.

[Ken]

On 15/09/2021 at 09:04, Amv88 said:

Hi, I am in the process of being offered a contracting job with a UK Company. They’ve told me that when I move to Australia in may 2022 I will be able to continue to work for them. Now I have never been a contractor in the UK before and I’ve heard that Australia has worldwide tax. I don’t plan on doing this job long term. Most likely towards end of 2022 but am unsure if I should take the opportunity (which will be life changing) because of potentially being taxed in both countries. Any advice would  be beneficial thank you 

The way the double taxation agreement works is that if you are working in Australia you should be taxed in Australia and not in the UK. The fact that your employer is in the UK is irrelevant, however as Marisawright has pointed out it is all about having it set up correctly. If you are going to be a contractor rather than an employee it's actually probably easier to get it right, as you just need to obtain an ABN once you arrive in Australia and send your next invoice using that.

[Alan Collett]

Yes, Article 14 of the Tax Treaty between the UK and Australia has a role to play in respect of employment income paid from one country to a tax resident of the other.

Tax residency is therefore also relevant to the question.

Formal advice might be needed - and assistance with tax returns.

Feel able to contact me directly for a freebie chat.   

Or we might have spoken already - sorry for the lateness of this reply!

Best regards.