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Working as a contractor for uk company from australia

Newbie

Views 899

Replies 1

BACKGROUND

I am currently living and working in the UK, planning to migrate from the UK to live and work in Australia later this year.

 

I have been granted a Partner (subclass 100) visa which allows me indefinite length of stay to work and live in Australia. I am sponsored by my spouse who is an Australian citizen.

 

My current employer in Greater Manchester, a UK-based company with no physical presence in Australia, is offering me the opportunity to continue working remotely from Australia (as a contractor).

 

I am looking for any guidance on legal requirements and best practice, for both myself and my employer, to facilitate me to continue working for a UK-based company from Australia....whether as a contractor or in some other capacity.

 

QUESTIONS

I would consider continuing my job as a contractor instead of a FT employee.

 

I am aware I will need a Tax File Number whatever the case but looking for further advice and legal considerations relating to tax, invoicing, ABN(?) etc. Never worked as a contractor before so it's all new to me.

 

  1. In order to operate as a contractor, is it a legal requirement for me to register as a sole trader and apply for an Australian Business Number (ABN)?
  2. Suggestions on the best way to receive my salary? Invoice my employer and ask for payment into my UK bank account? Or into an Australian account? Does it matter which account I am paid into from a legal/tax perspective?
  3. Any other major tax considerations on my income in this situation? Understandably as a sole trader I will need to file a tax return, but anything else I should consider?

I would appreciate any other tips and guidance. Many thanks in advance.

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 0

Hello @NarutoDeo

 

There are a few things to consider before you start working in Australia.

 

The first thing is whether you are an Australian resident for tax purposes.

 

If you are a Non-resident, your UK employer should still be able to treat you as a UK employee and pay you using your UK bank account. If you are an Australian resident and your employer is treating you as an Australian employee, you will need to setup an Australian bank account.

 

It may be worth seeking independent legal/tax advice about whether you are a UK employee or Australian employee.

 

The second this to check is is whether you are actually an employee or contractor. The easiest way to do this is by using the Employee/Contractor decision tool. There is no right or wrong answer however you may need a TFN either way and your tax obligations will vary depending on what category you fall under.

 

If you determine that you are an Australian employee, your employer will need to pay you a salary/wage and may need to register for Pay as you go (PAYG) withholding. Your employer does not need an ABN to register for PAYG. They can submit an Application to register a PAYG withholding account. Normally this would need to be sent via post, however due to COVID-19, we will accept the application via email at: RegistrationsNonResident@ato.gov.au

 

If you determine that you are a contractor, you can apply for an ABN online via the Australian business register, however you will need a TFN before you apply. You will also need to work out what other business registrations you may need such as GST.

 

I hope the above information and links have answered your questions.

 

Enjoy your time in Australia. Have a great day Smiley Happy

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hello @NarutoDeo

 

There are a few things to consider before you start working in Australia.

 

The first thing is whether you are an Australian resident for tax purposes.

 

If you are a Non-resident, your UK employer should still be able to treat you as a UK employee and pay you using your UK bank account. If you are an Australian resident and your employer is treating you as an Australian employee, you will need to setup an Australian bank account.

 

It may be worth seeking independent legal/tax advice about whether you are a UK employee or Australian employee.

 

The second this to check is is whether you are actually an employee or contractor. The easiest way to do this is by using the Employee/Contractor decision tool. There is no right or wrong answer however you may need a TFN either way and your tax obligations will vary depending on what category you fall under.

 

If you determine that you are an Australian employee, your employer will need to pay you a salary/wage and may need to register for Pay as you go (PAYG) withholding. Your employer does not need an ABN to register for PAYG. They can submit an Application to register a PAYG withholding account. Normally this would need to be sent via post, however due to COVID-19, we will accept the application via email at: RegistrationsNonResident@ato.gov.au

 

If you determine that you are a contractor, you can apply for an ABN online via the Australian business register, however you will need a TFN before you apply. You will also need to work out what other business registrations you may need such as GST.

 

I hope the above information and links have answered your questions.

 

Enjoy your time in Australia. Have a great day Smiley Happy