natalie

Hope someone can help!

My husband's company have agreed that he can continue working for them from home in Australia.

Has anyone been through a similar experience and can advice on payment and taxation arrangements? Also what are the legal implications of working under a UK contract in Australia?

His company have suggested that he may work in effect on a self employed basis.

We have had our PR visa granted and hope to move to Melbourne as soon as the house is sold.

Many thanks

Natalie

NoodleSYD

I work for a UK company from home here in Aus too. The quickest, cheapest and most straightforward action is for your hubby to set himself up as a sole trader. It means applying for an ABN (Australian Business Number) from the tax office. Once he has this he is treated as a business by other businessnesses in Australia - ie he can claim back GST of his business inputs and companies paying him in Aus aren't obliged to withhold tax.

Every quarter he will need to complete a Business Activity Statement and lodge it with the Aus Tax Office (or be fined). It's basically a reconciliation of all his business earnings and outgoings. It doesn't matter whether this income is sourced from overseas or within Australia (though if he has been working for domestic Australian companies too the ATO will expect him to charge have them GST and remit it back to the ATO). There is no GST on invoices to overseas companies.

The main advantage of being a sole trader is its simplicity and lack of paperwork. The main disadvantage is that all your taxable earnings (earnings-input costs) are taxed at you PERSONAL income tax rate, not at the company tax rate.

Basically, if he's likely to earn more than about AU$60k net (and push himself into the highest tax bracket) it may be more tax effective to incorporate as a company. However there is a vast increase in paperwork and costs associated with this over being a sole trader.

His company is right, he is effectively going to be a self-employed contractor.

natalie

Thanks for the reply. Can he get the business number as soon as he gets there, how long does it take?

Do you pay tax annually or quarterly?

Did you use an accountant to help you set this up?

Any other suggestions would be gratefully received!

Natalie

mashiraz

Hi,

Ypou should get in touch with Alan Collett of Gomatilda. He knows all about this stuff and has some good fact sheets on his website. He also helps out alot of the people wanting to emigrate on this forum..

www.gomatilda.com

Good luck
Mash

NoodleSYD

If you want to incorporate as a company you'll need an accountant to do it for you, but setting up as a sole trader (trading under his own name) is just one piece of paper and very easy.

Since you'll both have to register for Tax File Numbers (think US social security number) when you arrive then he may as well apply for his ABN at the same time. I think mine took a couple of weeks to come through, it may have been even sooner. You'll need an address though. From memory I think they won't mail to a PO Box - something to do with your "business" having to have "premises" (ie your home).

Have a surf through the Tax Office website. http://www.ato.gov.au Business Home Page then "Apply for an ABN - Business Entry Point" from the RHS will give you all you need to know. Don't lose any sleep over it though, there's nothing you can do about it until you get here.

Personal Tax is annual but Business Tax is usually quarterly (BAS = a UK VAT return). Aus tax year runs July 1 to June 30.

Alan Collett

NoodleSyd has dealt with most of the issues, so I won't go over them again, save only to say that if you find yourself in the higher rate tax band and not needing to spend all the money you are earning a limited company can act as a tax saving vehicle - in Australia companies pay tax at 30% whereas the personal top rate of tax (including the Medicare Levy) is 48.5%.

You can also set up family trust arrangements to effectively cap your overall top tax rate at 30% (subject to your own personal income requirements).

I know there can be a reluctance to incur accountant's fees, but if you find yourself being paid at a rate that triggers the top rate of tax I would encourage you to have an initial dialogue with a tax accountant to see what might be done.

In the meantime I have attached one of our tax factsheets which might be of interest. Others are available here:
http://www.collettandco.com/factsheet.cfm

Best regards.

Alan Collett

Also, if you decide to carry on in business as a self employed person but in a trading name that differs to your own name you must register your business name in the State or Territory in which you are in business.

More details are here:
http://www.gomatilda.com/business_is...ness_names.cfm

Best regards.

natalie

Thank you all so much for the advice!!!

Natalie