hueymc

Hi all.

I'm pretty sure this has been covered many times within this forum, but I can't seem to find any specific answers to my questions.

I am a British citizen, and holder of an Australian permanent residency visa, currently working from home in Bristol, UK for a British company.

However, I'm interested in moving to Melbourne and continuing to work for this British company. The company has agreed in principle, but has asked me to do some preliminary, informal enquiries as to whether it's possible, as they have no Australian corporate presence.

I need to convince the company that it wouldn't cost them an arm and a leg to do this, and that I'm happy to pay my own relocation costs etc. - all I'm keen on doing is shifting from remote working in the UK to remote working in Australia.

My questions are, therefore:

- Is this legal?
- What does the British company have to do to facilitate me doing this?
- Do they have to register in Australia?
- If the only way of me doing this is as a contractor, is there a time limit on how long I can do it for?

Answers to any or all of the above questions, and any other advice, is hugely appreciated. Thanks, Huey

Zenshin

Ok I have done a little research on this and I understand where you are coming from in regards to getting some straight answers.

I work for my own company in the UK, however I am in the process of setting it up so I have people in the UK working for me and the rest of the work I can do from home (in Australia). I currently pay myself a wage from my company.

Some of what happens depends on what you plan to do long term. Inland Revenue have said that once I decide to leave the UK indefinitely then I notify them and they will issue me with a NT tax code which means my company will no longer deduct tax from my earnings and NI will not need to be paid (I do not plan on returning to the UK to live ever). As you will be a resident of Australia, you will then be required to declare all your income with the ATO in a tax return each year and they will tax you at the Australian rate. All your earnings (if you receive them in pounds) will need to be converted to Australian dollars on your tax return. Then you will need to pay the tax and any medicare levy that they work out. Alternatively, if you think you will have a few expenses it may be worthwhile being contracted to them so you can claim them. Find an accountant who is knowledgable in both Australian and UK tax so they can give you the best advise in what is going to be the most beneficial to you.

I am still finding out and it is a matter of asking a lot of questions to a lot of people.

hueymc

Hi. Thanks so much for that advice, it actually makes a lot of sense. I do intend to move to Australia indefinitely, so it's good to have this info.

But I'm guessing that's all stuff that I need to sort out personally - is there anything the company itself has to do?

(NB: I realise it's likely that HR perhaps has the answer to these questions, but I'd like to be forearmed with some knowledge before I go to them and make my plans more public within the team - only my line manager and CEO know at the moment.)

ozhappy981

1. It's perfectly legal and absolutely no problem.

2. No, your UK employer does not have to register itself in Australia.

3. Yes, you will need to set yourself up as a contractor. There is no time limit for how long you can be a contractor working for a British company.

4. How to get it all sorted:
(a) As you are currently an employee you need to complete a form and send it off to the UK Inland Revenue when you leave the UK (the form has a number; can't remember it off-hand; will look it up for you tomorrow monring and give you the link to the form; very late here right now).

(b) When you arrive in Oz, you go to the ATO website (www.ato.gov.au) and in the "individuals" section go through the steps to get a TFN (tax file number) and an ABN (Australian Busines Number). You may need to wait before you can get the ABN until you have the TFN - but that only takes a maximum of 4 weeks.

(c) Your company pays you your salary. Plus they also have to pay you 9% of your salary as superannuation. This is a legal Oz requirement. And although you work as a contractor, because the British Company is your only "client", they do have to pay this. There are loads of super funds to choose from. You choose one, get yourself set up as a member, and then your company can transfer the 9% each months direct into your super fund account from the UK.

(d) At the end of the tax year (30 June), you do your tax return as an individual and pay whatever tax and Medicare you have to pay on your taxable income. The ATO will then put you onto the PAYG instalment system and in your second tax year you will pay tax quarterly in advance, do your tax return at the end of the tax year.

It is all very easy to do.

Any questions, post them here or send me a PM and I will do my best to answer them (going to bed now ).

hueymc

Hi

This is incredible advice, thanks so much. You've told me everything I wanted to hear

I already have an ABN, TFN and a super fund from my spell in Melbourne a few years back, which I guess will help my case proving the seamlessness of the move to my employers.

One more thing: if my company needs to get "official" advice on this,will they need to contact an independent migration expert, or is there a specific Australian government department (other than the ATO) that deals with corporate issues that they should speak to?

Thanks once again to both - I'm hugely grateful.

lilly07

this is great info... I run 2 business here in UK and am taking both to Oz, one will have international clients/mostly the brits I work for already and one will have oz clients... was wondering how to make the transition... I take it I can only get a ABN once in oz.

I have already talked to the inland rev here so am up on that part...

so may be looking at a 4 weeks holiday once in oz then..?

Zenshin

Are you sure this is the case? Whenever I have spoken to my accountants they have never suggested that our UK company would have to pay super (as in my case).
"However, employers will still be exempt from having to provide superannuation support for :
employees aged 70 years and over
Non-resident employees who are paid solely for work undertaken outside Australia
resident employees paid by non-resident employers for work done outside Australia"
This is what I have found in my research.

Essentially if the OP is employed by a British company and it doesn't derive any income in Australia then the work the OP is doing is really classed as being done in the UK even if remotely surely? I am assuming all his work can be done via internet etc.

Think I shall have to pay another visit to the accountant again.

Alfresco

Surely this will come out of the salary you earn, not on top. The UK company won't want to pay anything extra!

Please clarify.

Thanks.

MartinLuther

I reckon Zenshin is right. A UK company would not pay super. As a contractor working for one company you would have to pay it out of whatever they pay you.

Also worth noting that the employer's NI is 12.8% of your wages over a minimum amount so they would currently be paying about 10% contribution to the UK government. They don't have to pay this for foreign employees, so it may be worth talking to your employer about including part of that in what they pay you (which you can then hand onto your super).

I can't quite remember what happens with VAT (as you'll be supplying a service). I vaguely remember that if you are charging from outside the EU then you don't have to charge your customer VAT. You might have to check the situation with GST.

Zenshin

The 9% is on top of what you earn but it must be paid into a super fund.

Like MartinLuther said it is basically the same as what the company would normally pay in NI. So your company wouldn't be any worse off because once you leave the UK you apply to Inland Revenue to not have to pay any more NI. You can choose which super fund to go with and get them to pay directly in if you wish. Don't think they have to though.

ABCDiamond

The compulsory 9% Super is ALWAYS on top of your basic salary, and is paid by the Employer. That is specified by Law.

ABCDiamond

I am going to question this one aswell

The "only client" part does make me think about it now, but I was under the impression that as you would be self employed in a different country, the rules may be a bit different, to the standard Australian rules.

It will be interesting to have confirmation of this, once you wake up

ABCDiamond

You don't charge VAT or GST from Australia to an overseas customer.

You can however register for GST here, and get a quarterly refund of all GST paid on eligible expenses

It does get a bit embarrassing though getting that refund every time (and you begin to wonder if you may get on the tax audit list a bit faster due to that )

lonndongeek

You may've already thought about this, but will you be able to cope with earning GBP when it drops 20% against the AUD?

Cheers

Steve

Alfresco

Yeah, but as a contractor you'd be invoicing the employer a fixed amount for services from Oz to the UK. You would need to work the 9% Super into your total figure and pay the Super yourself. A logistical thing really.

As Matrin Luther said, Employers NI is no longer applicable, so a deal could possibly be made with the employer.

The GST tip sounds good. Thanks.