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Remotely working for UK based company in Australia

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Newbie

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Hi,

I'm currently a UK resident who has received Australian permanent residency and will be moving to Australia in July 2018.

I would like to continue working for my current UK-based company as a remote worker from Australia. I will be working as a full-time employee from my home. My UK income is currently taxed at source.

I have the following questions:

  1. Please let me know how will my income be taxed in Australia if I continue to receive income into my UK GBP account? Will I continue to be taxed in the UK at source, and receive a tax offset in Australia? Or can I choose to pay taxes i
  2. What happens if I ask my UK employer to transfer my income (after being taxed at source) to my Australian dollar account?
  3. Will my UK company need to comply with Australian company benefits? Should they provide superannuation?

Thanks,

Reshma

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ATO Certified

Anonymous

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As an Australian resident you will be taxed on income derived from all sources including foreign income. Income-you-must-declare

 

Your UK employer may continue to withhold tax for UK purposes if they are required to do so under UK tax legislation.  

Your UK employer may also be obligied to withhold from the payments they make to you under Australian tax legislation and remit the tax withheld to the ATO.  Employing-people-in-Australia

 

Australia has a double tax agreement with the UK and you will probably get a tax offset.  Guide-to-foreign-income-tax-offset-rules-2017

 

You will not be able to choose where your income is taxed, it will be determined by the relevant tax authority and legislation.

 

It does not matter what you do with the income you receive, once your UK employer has paid you. The tax treatment remains the same.

 

The UK company will have to pay super and withhold tax from your payments under Pay as You Withholding if they are engageing you wholly for your labour in Australia.  Employing-people-in-Australia

 

When dealing with foriegn income and double tax agreements it is never straight forward and you may wish to obtain further information by:

 

Phoneing  the ATO on 13 28 61 - Monday to Friday 8am to 6pm EST or if phoning from overseas dial +61 2 6216 1111

 

or you can seek written advice in the form of an ATO Private ruling: Applying-for-a-private-ruling

 

 

10 REPLIES 10
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ATO Certified

Anonymous

Replies 9

As an Australian resident you will be taxed on income derived from all sources including foreign income. Income-you-must-declare

 

Your UK employer may continue to withhold tax for UK purposes if they are required to do so under UK tax legislation.  

Your UK employer may also be obligied to withhold from the payments they make to you under Australian tax legislation and remit the tax withheld to the ATO.  Employing-people-in-Australia

 

Australia has a double tax agreement with the UK and you will probably get a tax offset.  Guide-to-foreign-income-tax-offset-rules-2017

 

You will not be able to choose where your income is taxed, it will be determined by the relevant tax authority and legislation.

 

It does not matter what you do with the income you receive, once your UK employer has paid you. The tax treatment remains the same.

 

The UK company will have to pay super and withhold tax from your payments under Pay as You Withholding if they are engageing you wholly for your labour in Australia.  Employing-people-in-Australia

 

When dealing with foriegn income and double tax agreements it is never straight forward and you may wish to obtain further information by:

 

Phoneing  the ATO on 13 28 61 - Monday to Friday 8am to 6pm EST or if phoning from overseas dial +61 2 6216 1111

 

or you can seek written advice in the form of an ATO Private ruling: Applying-for-a-private-ruling

 

 

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Newbie

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Thank you @Anonymous.

My UK employer does not intend to set up a business presence in Australia. I will be considered a remote working employee in the UK.

I have confirmed that since I will be carrying out my work wholly in Australia, I will be considered non-resident in the UK for tax purposes, and will have to file taxes only in Australia.

 

Could you let me know if my UK employer needs to set up a PAYG or am I allowed to file my taxes in Australia myself?

Also, could you confirm whether employees are taxed for receiving company benefits such as private healthcare and company annual bonus?

 

Thanks!

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Community Support

Replies 7

Hi @reshmacarlo,

 

Thanks for your question!

 

The information @macfanboy has provided is correct - the information in our guide Employing people in Australia my help your employer meet their obligations.

 

Your employer may have an obligation to:

  1. Pay superannuation on your behalf, and
  2. Withhold tax under the as pay as you go withholding system and send the withheld amounts to us.

As an employee, you will need to lodge an income tax return at the end of the financial year and declare your income and how much tax has been withheld on your behalf. Your employer is responsible to withhold tax from your wages based on your pay cycle (weekly, fortnightly or monthly).

 

If you receive additional payments as part of your pay, it will need to be determined if they are considered allowances or reimbursements. You can find information about withholding for allowances and the difference between allowances and reimbursements on our website.

 

If you have further questions you can phone or Skype us from overseas on +61 2 6216 1111 between 8am - 5pm, Monday to Friday and let the operator know you're calling from overseas to request a callback. Alternatively, when you arrive in Australia, you can phone 13 28 61 between 8am - 6pm, Monday to Friday.

 

Thanks, JodieH.

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Newbie

Replies 6

Hey @JodieH,

 

I am in the same situation as @reshmacarlo where I am working remotely in Australia for a UK company who have no intention of setting up an office in Australia.

 

I have read through the guides you linked however, how do I know/work out whether my company MUST by law pay for my superannuation?

 

Also, as my tax rate in the UK is 20% and here it is 32.5% - after completing my tax return I had to pay the 12.5% to the ATO. Is this something that my company should be paying?

 

Look forward to your advice.

 

Thanks, Kate.

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ATO Certified

Community Support

Replies 5

Hi @katelevy

 

Welcome to our community and Australia it would seem (:

 

I have deliberated over this query and in truth there are a few unknowns that may be best established with a private ruling.  See ATO advice and guidance. Your Residency for Tax purposes and the visa you are on need to be clearly established first. Also the currency and manner of payment. Then the Tax Treaty with the UK will influence any treatment of income and from that any obligations it imposes, if at all, on the payment of Superannuation and if it is enforceable for your situation. So depending on the foregoing one will or will not enable the other. For further information see Residency tests for tax purposes. See Tax Treaties. Also see Working out if you have to pay super.

 

Thanks for the query.

Kind regards

MarkA

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Newbie

Replies 4

Hi,

My wife is in a similar situation as the previous posts except in reverse as we live in the UK and she is working for an Aussie company remotely from our home in the UK.

Obviously she has to pay tax here in the UK as we are resident here now so will complete a tax return here. Her work in Australia withholds tax from her wages but does she need to also complete a tax return in Australia?

The tax return here will be under the DTA so I'm guessing the tax return in Australia is not needed as any tax will go to the UK anyway, is that correct?

Thanks

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Newbie

Replies 3


@Darkos wrote:

Hi,

My wife is in a similar situation as the previous posts except in reverse as we live in the UK and she is working for an Aussie company remotely from our home in the UK.

Obviously she has to pay tax here in the UK as we are resident here now so will complete a tax return here. Her work in Australia withholds tax from her wages but does she need to also complete a tax return in Australia?

The tax return here will be under the DTA so I'm guessing the tax return in Australia is not needed as any tax will go to the UK anyway, is that correct?

Thanks


@MarkATO apologies, forgot to mention your name in my query above. Are you able to help with this please?

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ATO Certified

Community Support

Replies 2

Hello @Darkos

 

As your wife receives income from an Australian Employer she would need to lodge an Australian Income tax return. On this return she would only need to report her Australian Sourced Income (Employment, Interest, Dividends etc). Her UK income would only need to be reported under the World Wide income section if she has a Higher Education Repayment which is separate from her Taxable income.

 

Regards,

LukeS

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Newbie

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Hi @LukeS 

As previously mentioned my wife works from home in the UK where she is now resident but for an Australian company that pays here in AUD.

My wife has completed an Australian tax return and also now a tax return here in the UK. Should she ammend her Australian tax return now to include a 'foreign income tax offset' for this employment as she is effectively paying UK tax for this?

Thanks