Double taxation claim

[Jules13OJ]

Hope someone can point me in the right direction...

Am from UK on a temporary 482 visa. Started work in WA 15 Jan 24. Completed the P85 and sent to HMRC.

Have just heard from HMRC saying they will tax my non-UK income (ie my Australian income)

Aware of the tax treaty between UK and Australia so I know I won't pay tax twice but how do I go about claiming the tax back from HMRC as I will have already paid it in Australia? I have found a form on HMRC site- DT Application for relief at source from UK Income Taxand claim for repayment of UK Income Tax. Should I be completing this or will this naturally right itself when I complete my Australian tax return later in the year? The form seems very 'clunky' in that it has to be sent to ATO who then post it to HMRC ( hasn't HMRC heard of digital communication??)

Assuming next UK tax year it won't apply as I won't be a UK tax resident at all? How will HMRC know this?

Grateful for any pointers! Thanks all.

 

[InnerVoice]

I'd have thought that you will have already paid more tax in Australia given the higher tax rates for foreign residents than you would be due to pay on that income in the UK, meaning that you'll not need to pay any further tax to the HMRC because of the DTA. However, you won't be entitled to a refund from them either. You will need to prove to the HMRC that the income has already been taxed in Australia. That's just my take on it, but I might be completely wrong!

One of the experts who contribute regularly might point you in the right direction but failing that you could contact the HMRC to clarify what you need to do, or consider getting professional tax advice.

[Alan Collett]

Sorry - what's your tax residency status in the UK?

If you're not a resident of the UK the Aus income is not taxable in the UK.

If you're a dual resident of the UK and Australia you'll need to decide where you are Treaty resident (see Article 4). and then see Article 14 to ascertain how your employment income should properly be taxed.

If you need help - email me at my bdhtax.com email address shown below.

Best regards.

[Jules13OJ]

Thanks for suggestions! 

My reading of it was that I would be taxed by BOTH UK and Australia and am wanting to know how I can claim back the tax paid as per the double taxation treaty. (not sure whether it will be UK/Australia who pay it back)

I am currently classed as UK resident for tax purposes as I have always lived/worked in UK and did so up until Jan this year which puts me in the UK bracket for tax residency as between April 23 and April 24 I will have spent more than 183 days there. The form on HMRC site as above has a section where you can request split tax arrangements which I guess is what I am hoping for- so that my income April 23- Jan15th is taxed by UK only but then tax thereafter is taxed by Australia only. 

None of this is ever straightforward! 

 

[Marisawright]

51 minutes ago, Jules13OJ said:

None of this is ever straightforward! 

 

No, it isn't.  I'd recommend engaging someone like Alan to do your tax returns for your first year in Australia as the whole thing is mind-boggling.  Once you see how it's done, you'll probably be fine to DIY the following year.  Note that the fee will be tax-deductible if you're paying Australian tax.

[Ken]

On 21/03/2024 at 19:31, Jules13OJ said:

Thanks for suggestions! 

My reading of it was that I would be taxed by BOTH UK and Australia and am wanting to know how I can claim back the tax paid as per the double taxation treaty. (not sure whether it will be UK/Australia who pay it back)

I am currently classed as UK resident for tax purposes as I have always lived/worked in UK and did so up until Jan this year which puts me in the UK bracket for tax residency as between April 23 and April 24 I will have spent more than 183 days there. The form on HMRC site as above has a section where you can request split tax arrangements which I guess is what I am hoping for- so that my income April 23- Jan15th is taxed by UK only but then tax thereafter is taxed by Australia only. 

None of this is ever straightforward! 

 

Normally neither need to pay it back (the only exception is if you paid them too much) since only one will take tax at source. If you have an Australian employer they'll have paid PAYGW, but nothing will have gone to HMRC. If your Australian employment income is taxable in the UK it will need to be reported on a Self Assessment Tax Return. The foreign income pages of the Return (section SA106) have all the boxes necessary to report the amount of tax you have paid in Australia. Only if UK tax due is higher than the tax you paid in Australia will you have to pay any UK tax. If the UK tax is lower you will not get a refund (although if you've been taxed at source on other UK income you might get that tax refunded).

It works the same when it's the other way around (e.g. if you have UK income that is taxable in Australia) however as you are on a temporary visa that does not apply to you.

If split treatment applies (which is the case if you've permanently moved to Australia) then only your Australian income (and Australian tax paid) for the part of the year you were UK resident is entered on your UK tax return (but UK income for the full year). This might get you a refund of UK tax withheld back from HMRC (if you've paid too much), but there wouldn't be any Australian employment income taxed in the UK so your question about claiming tax back is irrelevant.