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Re: Working from Australia as an Contractor to a UK company

Newbie

Views 528

Replies 3

Good day everyone,

 

I am in a bit of a unique situation where I have been granted a Permiant Residence Partners Visa for Australia and am due to emigrate with my wife and son mid-December from the UK.

 

My current employer (UK solicitors firm) has suggested that they wish to offer me a contractors contract to work remotely from Australia.

 

If I were to "become a contractor" I would have to consider becoming a sole trader with an ABN.

As I would be an Australian Resident, working as an Australian Sole Trader, the tax should be fairly straight forward, as all the income earned from my UK "employer" would be taxable in Aus.However I am not too certain what this would mean in relation to a Super and the 2%  Medicare levi, presumably both would apply to a sole trader?

Are there any other considerations I would need to take into account in relation to becoming a sole trader?

 

If anyone is able to shed some light on the other things I would need to consider, it would be greatly appreciated.

 

Kind regards.

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 1

Hello @NarutoDeo

 

If you are going to operate as a sole trader, there is information on our website that can help you work out which registrations you need such as GST.

 

As a contractor, you won't be paid superannuation, however you may be liable to pay the Medicare levy when you lodge an Australian tax return unless you qualify for an exemption.

 

I hope this answers your questions. All the best Smiley Happy

3 REPLIES 3

Most helpful response

ATO Community Support

Replies 1

Hello @NarutoDeo

 

If you are going to operate as a sole trader, there is information on our website that can help you work out which registrations you need such as GST.

 

As a contractor, you won't be paid superannuation, however you may be liable to pay the Medicare levy when you lodge an Australian tax return unless you qualify for an exemption.

 

I hope this answers your questions. All the best Smiley Happy

Newbie

Replies 0

Thank you for getting back to me, I now have a better direction of things to look into. 

if my understanding of PSI as a sole trader is correct, PSI only really changes how the annual tax return is completed, but does not make any difference in the amount of tax payable, is that correct?

 

I should not be likely to qualify for GST in the first year, as I understand it, currently being paid a UK wage with all deductions made in the UK. My earnings until December 2020 should not affect my July 2021 Aus tax return, and I am not likely to earn $78K Jan to July 2021.

ATO Community Support

Replies 0

Hi @NarutoDeo,

 

Correct - reporting personal services income (PSI) won't change your tax payable, just the way you report the income.

 

Whether or not you need to register for GST is dependent on a few things, but for you the main point will be whether or not your business turnover (that is, the income that goes through the ABN) exceeds the $75,000 threshold.