daveg1980 Posted January 11, 2012 Share Posted January 11, 2012 Hi, I am an IT contractor and looking to contract in Sydney, NSW. I am hoping to come across on a 176 visa. I have done a fair amount of reading, but its very hazy on the contractor setup in aus. In UK its either an Umbrella or Ltd company. I think the law is quite different in Aus, I am just wondering how other contractors have got setup in aus? Are there any tax benefits with being in contract employment? Do contractors get setup as normally employees? I am keen to understand my options before speaking to a financial advisor when I get out there. Many thanks, Dave Link to comment Share on other sites More sharing options...
Fashionably Late Posted January 11, 2012 Share Posted January 11, 2012 How it was explained to us it works very much on an 80/20 rule and therefore our financial adviser said we needed to go through an umbrella company as my husband contracts but only ever one client at a time. We researched umbrella companies and went with one for his first contract and paying 3.5% for the service. On his current contract the company he is contracting for has their own payroll department and therefore aren't paying any fees. There are benefits to contracting (bigger salaries for one) but we haven't seen the tax benefits that are like working outside IR35 in the UK. But my husband wouldn't change a thing he said. Link to comment Share on other sites More sharing options...
daveg1980 Posted January 11, 2012 Author Share Posted January 11, 2012 Thats great thanks, I will have a look at umbrellas. It does seem a very unclear area and not much around on the internet. I would be interested to know if there is any kind of tax benefit, as I have just been using a australian salary calculator to work out take home pay. Are you enjoying brisbane? Thanks, Dave Link to comment Share on other sites More sharing options...
Fashionably Late Posted January 11, 2012 Share Posted January 11, 2012 We love Brisbane. I honestly couldn't imagine living anywhere else. The umbrella company my husband used was Entity. The others he spoke with are ITG and CXC. Link to comment Share on other sites More sharing options...
daveg1980 Posted January 16, 2012 Author Share Posted January 16, 2012 Thats great!! Many thanks, I will look them up! Link to comment Share on other sites More sharing options...
Clankaroo Posted January 18, 2012 Share Posted January 18, 2012 Hi, I am joining this thread as I am in a similar position to yours. I will soon be granted a 176 visa and plan to go to Sydney and work as an IT contractor. I have got a few questions in my mind : - I think I will first live in a temporary housing, is it a problem to start one's business ? My address is expected to change when I will find a permanent housing.. - How much time does it take to start one's business in Australia (administration, registering, etc.) ? I plan to start looking for a contracting job and then start my own business when I will have secured it. If it does not work for some time, I will start looking for a job as an employee.. Is this a good plan ? - Can you give some details about this umbrella companies you are talking about ? Is this a contract outsourcing to freelancers ? Comments and/or advice welcome Thanks all Link to comment Share on other sites More sharing options...
daveg1980 Posted January 26, 2012 Author Share Posted January 26, 2012 From what I have read, as an IT Contractor I cant see any major benefits in setting up a ltd company like this Uk. Alot of people speak to speciality IT accountants across there to find out the best solution? The agencies keep advising me Lesters... but I dont think they are the solution I want to go for Link to comment Share on other sites More sharing options...
ronimp Posted February 2, 2012 Share Posted February 2, 2012 Hi Dave, I am in the similar boat as you are. Looking for an accountant who could sort this out. I talked to Lester, they charge 4x than what I pay in UK as their fees, talked to CXC and they are 5x more expensive. Quite a bit of money just to manage acount. CXC also tells it is tax incentive to open a Ltd company but would cost an one off $2K ( it is around 100£ or so here!). I am continuing to look for one, and will let you know if I find anyone suitable. Please do the same if you do. When are you moving? Cheers Roni Link to comment Share on other sites More sharing options...
daveg1980 Posted February 3, 2012 Author Share Posted February 3, 2012 Hi Ron, I will have another look too, but is umbrella the only way to go? I am looking to move end of june/beginning of july. Yourself? I have wrote to some accountants but not had a reply! Cheers, Dave Hi Dave, I am in the similar boat as you are. Looking for an accountant who could sort this out. I talked to Lester, they charge 4x than what I pay in UK as their fees, talked to CXC and they are 5x more expensive. Quite a bit of money just to manage acount. CXC also tells it is tax incentive to open a Ltd company but would cost an one off $2K ( it is around 100£ or so here!). I am continuing to look for one, and will let you know if I find anyone suitable. Please do the same if you do. When are you moving? Cheers Roni Link to comment Share on other sites More sharing options...
JoandJon Posted February 3, 2012 Share Posted February 3, 2012 I know it's a different field entirely, but hubby gets paid for gigs (go the Baker Boys and people getting married!) All he's done is get an ABN (search through the Aus Tax Office) and he's all sorted. Mind you it's not loads of money so we haven't checked out the best way. It's more pocket money than anything else Link to comment Share on other sites More sharing options...
Fashionably Late Posted February 3, 2012 Share Posted February 3, 2012 It's more to do with how many clients you have per year. It is much stricter than IR35. For most contractors it isn't worthwhile having your own company as most people wouldn't qualify on the tax front. Link to comment Share on other sites More sharing options...
daveg1980 Posted February 3, 2012 Author Share Posted February 3, 2012 Yeah, I read there isnt much benefit in setting up a ltd company, especially with payroll tax etc. I don't mind using an umbrella, but don't want to be shelving out lots of money to do so. hmmmmm, there isn't much out there on the internet about this It's more to do with how many clients you have per year. It is much stricter than IR35. For most contractors it isn't worthwhile having your own company as most people wouldn't qualify on the tax front. Link to comment Share on other sites More sharing options...
ronimp Posted February 3, 2012 Share Posted February 3, 2012 Hi Dave, You can also set up Limited Company but it will cost you nearly $2K. I am hoping to move around then too. Currently looking for a job but not having much luck! Roni Link to comment Share on other sites More sharing options...
daveg1980 Posted February 6, 2012 Author Share Posted February 6, 2012 I think you will struggle to secure any contract work unless your actually out there? Where abouts are you heading to? Cheers, Dave Hi Dave, You can also set up Limited Company but it will cost you nearly $2K. I am hoping to move around then too. Currently looking for a job but not having much luck! Roni Link to comment Share on other sites More sharing options...
daveg1980 Posted February 6, 2012 Author Share Posted February 6, 2012 Got this from easytax.com.au Crazy rate for a consultation!!! "Of course we would love to help you manage and optimise the Australian tax situation this year. Accord Accounting is a CPA professional tax firm which assists with tax for UK expats everyday; helping contractors to understand their tax obligations in Australia. Being excellent value for our service; we expect an personal tax return to be ~$230-280 depending on the time required & complexity of the return. We can also advise you in a consultation about the different routes you can take to maximise your net; & our consultation rates are $165 per ½ hr. Our offices are in Chatswood, Sydney, NSW but we also advise our clients abroad via phone/skype/email. Feel free to contact us if you have any questions or to arrange a consultation, as we are here to help you get the best results possible." Link to comment Share on other sites More sharing options...
ronimp Posted February 6, 2012 Share Posted February 6, 2012 Got this from easytax.com.au Crazy rate for a consultation!!! "Of course we would love to help you manage and optimise the Australian tax situation this year. Accord Accounting is a CPA professional tax firm which assists with tax for UK expats everyday; helping contractors to understand their tax obligations in Australia. Being excellent value for our service; we expect an personal tax return to be ~$230-280 depending on the time required & complexity of the return. We can also advise you in a consultation about the different routes you can take to maximise your net; & our consultation rates are $165 per ½ hr. Our offices are in Chatswood, Sydney, NSW but we also advise our clients abroad via phone/skype/email. Feel free to contact us if you have any questions or to arrange a consultation, as we are here to help you get the best results possible." Ridiculous. I used to get this kind of advice for free in the uk. I am heading off to Sydney. Link to comment Share on other sites More sharing options...
daveg1980 Posted February 6, 2012 Author Share Posted February 6, 2012 Same here!! I will do some more reading, if i know my options then bugger the consultation fee!! Me too, keep in touch! Always good to know fellow contractors! Ridiculous. I used to get this kind of advice for free in the uk. I am heading off to Sydney. Link to comment Share on other sites More sharing options...
daveg1980 Posted February 21, 2012 Author Share Posted February 21, 2012 Interesting... http://www.infopeople.com.au/financial.htm I am not adverse to going through an umbrella, i just want to find the most tax efficient way to be setup, be good if I can charge a few expenses too! Link to comment Share on other sites More sharing options...
Guest rajt Posted February 27, 2012 Share Posted February 27, 2012 Hi Any further news on this, as I'm also heading over to Sydney in June-ish to find contract IT Development work? Currently work in the City (of London) in Banking, and have used LTD companies and Umbrella Companies. It would be good to have done the homework before I set off, and yes I agree I dont want to pay huge fees to tax consultants and we are used to getting that basic information for free over here ! TIA Link to comment Share on other sites More sharing options...
daveg1980 Posted March 1, 2012 Author Share Posted March 1, 2012 No news, but I going to have a chat with a company next week to discuss the contractor setup options, tax benefits etc Will post as soon as i know HiAny further news on this, as I'm also heading over to Sydney in June-ish to find contract IT Development work? Currently work in the City (of London) in Banking, and have used LTD companies and Umbrella Companies. It would be good to have done the homework before I set off, and yes I agree I dont want to pay huge fees to tax consultants and we are used to getting that basic information for free over here ! TIA Link to comment Share on other sites More sharing options...
mw291073 Posted March 13, 2012 Share Posted March 13, 2012 Interesting thread. I'm planning to head out to Aus (probably Sydney) in August, but am nervous about going without having something already lined up. Haven't really contracted before - may just have to keep my job in the UK and apply long-distance. Keep us posted on how you get on! Link to comment Share on other sites More sharing options...
ronimp Posted April 17, 2012 Share Posted April 17, 2012 I had been talking to CXC and Lester - according to their sample calculation take home salary with CXC is 76% whereas with Lester is around 60%. Far too low compared to UK contracting. Reading few articles, it seems all I need to do is get an ABN number and an accountant, although I am not sure how much an accountant would charge. I have tried contacting few others but they do not seem to bother! http://www.taxpayersassociation.com.au/your-staff/so-you-want-to-be-a-contractor.html Anyone else had any lack with these or even a job? Link to comment Share on other sites More sharing options...
Fashionably Late Posted April 18, 2012 Share Posted April 18, 2012 But remember unless you contract for numerous people in Australia in the course of one year, then it is like daling with IR35. You really can't get away from it unless you have tons of clients. You can't compare it to the UK as it's Australia with some of the strictest tax laws I have yet to encounter. Link to comment Share on other sites More sharing options...
daveg1980 Posted July 6, 2012 Author Share Posted July 6, 2012 I am not much futher on to be fair, and I am heading out in a few weeks. Most of the accountants I have contacted have not replied CXC seems ok? I am avoiding Lesters, they seem more beneficial if you require sponsorship. I am looking at PAYG setup in Australia, but am likely to need an accountant. The search continues! I had been talking to CXC and Lester - according to their sample calculation take home salary with CXC is 76% whereas with Lester is around 60%. Far too low compared to UK contracting. Reading few articles, it seems all I need to do is get an ABN number and an accountant, although I am not sure how much an accountant would charge. I have tried contacting few others but they do not seem to bother! http://www.taxpayersassociation.com.au/your-staff/so-you-want-to-be-a-contractor.html Anyone else had any lack with these or even a job? Link to comment Share on other sites More sharing options...
daveg1980 Posted July 6, 2012 Author Share Posted July 6, 2012 I have actually spoke to CXC before, they seem on the ball, but some of the estimates i got given were based on the LAFHA which is no longer going. Still a good company though! Link to comment Share on other sites More sharing options...
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