daMuzza

Hello. I have a UK/Australia tax issue I'm hoping someone can guide me on.

I live in Australia but still work for my UK company as an employee (I work over the internet).
This arrangement has been fine for the last year as I was essentially on holiday in Australia but still officially a UK resident, and paid tax via PAYE.

My new visa has just come through very recently (Spouse visa) making me a temporary resident that has to pay Aus taxes. So now I need to rethink how this all works.

It seems to me that I might have to become self employed in Australia, and get my company to pay me as though I was a contractor, so I don't pay UK tax any more. That does mean I lose some of the job security of being a full time employee though.
Also... are Aus income taxes higher or lower than the UK, does anyone know? (i.e. am I going to lose out?) My wage is about 55k GBP, which at the current very poor exchange rate is about 110k AUD

Does anyone know of any accountants or legal tax advisers or anyone else that would be able to best give me advice on how to handle both the UK and Australian side of things here?
Or any other advice or pointers would be greatly appreciated!
Would I have any problems on the UK side if I just suddenly stopped paying taxes? Do I have to declare that I'm no longer a resident for example?

Thanks

Smartinis

Afraid I can't answer the above, but on a similar note if you work in Australia for a NZ based company does any one know if they would do PAYG and would they have to pay Super as in Australia or would they be exempt as they are registered in NZ?

Does anyone know of any pitfalls that working for a company in NZ might throw up?

Thanks, sorry to interupt the current thread.

ABCDiamond

If you go self employed, and invoice the UK company for your work, then you are able to claim various office expenses here, and maybe even the odd trip back to your main business supplier (in UK), once or twice a year.

There are advantages of doing it this way.

Tax wise, it isn't actually that much different.

UK £26,700 was 23.9% : Deductions as a percentage:
Australia $66,000 was 23.7% : Deductions as a percentage

UK £120,000 was 35.7% : Deductions as a percentage:
Australia $294,000 was 39.5% : Deductions as a percentage

Your figures are somewhere in between those examples that I did a while back. But it should give you an idea.

Regarding the job security, I feel that may not be an issue any more. Living in a different country, you "may" have already lost that, from a legal view ?

ABCDiamond

I think the same would apply to you, but I am not absolutely sure.

Zenshin

Hi I am also in a similar situation and have just this week made calls to Inland Revenue to work it out before I leave. My difference though is that I own my company and I am an Australian citizen so as soon as I step foot back in Oz I will have to declare all foreign income there.

When I spoke to Inland Revenue they asked whether I was likely to go to Australia indefinitely or if it was only for a year as apparently it makes a difference. You can apply to have no tax taken out of wages here in UK and then you just declare it all to the ATO and they treat it as part of your income. Also you will need to address the NI issue too - I am not sure if you are still paying NI through your current arrangement but if you invoice your company in the UK as self-employed in Oz then you obviously won't be paying NI anymore. Of course the Medicare Levy will then be added though.

I have also been speaking to a tax/migration consultant who is knowledgable in both the Australian and UK tax systems and has been very helpful.I suggest you speak to someone like that so they can work out the most tax efficient way of getting your income.
These are the rates taken from the ATO website for the 2009-2010 tax year.
Tax rates 2009-10

Taxable income
Tax on this income

$1 – $6,000
Nil

$6,001 – $35,000
15c for each $1 over $6,000

$35,001 – $80,000
$4,350 plus 30c for each $1 over $35,000

$80,001 – $180,000
$17,850 plus 38c for each $1 over $80,000

$180,001 and over
$55,850 plus 45c for each $1 over $180,000