Hello. I have a UK/Australia tax issue I'm hoping someone can guide me on.

I'm a UK citizen living in Australia but still work for my UK company as an employee (I do all my work over the internet).
I'm currently still paying UK tax and National Insurance via PAYE.

Up until recently I've been officially on a years holiday here, however my new visa has just come through (Spouse visa) making me a temporary resident, and I'm now expecting to live here permanently.

I've applied to the UK Revenue and Customs that I am no longer resident in the UK although so far I'm unclear on what my tax status there should be, as I've not yet had a response.

In addition I'm not clear on my Australian Tax situation. I've been attempting to fill out a tax return (using eTax) where I declare my foreign income, but the forms are all based upon the assumption that I'd be doing work out of the country and am being paid in Aus Dollars.
In reality I do all my work in Australia for a UK company (that has no Australia base), get paid in UK pounds in to my UK bank account and then transfer money to Australia when I need it.

Anyway I'm very confused.
Can anyone give me any information to clear this up, or possibly give me details of a tax advisor who might be able to help in this kind of scenario?

Thanks

Your residency status in Australia is based on the number of days you are physically in Australia.

As you know, you have to report worldwide income on your Australian tax return.

Enter your income from employment from the UK company at item #20 (after converting to AU$, official rates available from the ATO site, or I can send you a link) and enter any relative deductions to this income. I'm assuming at a minimum, you'd have internet expenses for your means of communicating with your employer. Also consider home office expenses. Enter the amount of tax withheld from your earnings, again after converting to AU$.

Don't forget to record any other income from the UK that you may have, such as interest income or investment earnings.

Cheers,
Marilyn

You do not say what type of visa you were on before the grant of your spouse visa.

If you simply had a holiday visa then you should not have been working at all in Oz. If so filing a tax return in Oz is going to open a whole can of worms.

If you had a 12 month working visa then life is slightly better.

In this case you you will probably still have to file a UK tax return and an Oz tax return and then claim double tax relief under the UK / Australia agreement. Either way you will need to talk to a tax specialist.

I think Alan would be your first point of contact as he is a practicing accountant in both the UK and Oz.

Thanks for the replies.

The Visa I was on previously was a one year working holiday. I had talked to my visa agent about my working status and she had told me that it wasn't a problem. It would have been a problem had I been taking a job in Australia of course as from memory I think you can only do one job for 6 months in that situation.

After reading more information in eTax, it says I don't need to declare foreign income (baring in mind I don't actually get paid here) if I am a temporary resident. So I'm now thinking that my tax return should just be zero all round and that the tax situation should only change when I become a permanent resident. Could that be right?

Thanks again

I don't think you can skip away that lightly!!

The tax rules re temporary visas say that you are not taxed in Oz on any income earned abroad but you are taxed on income earned in Australia.

Now I don't know the nature of the work that you do but the fact is that you did this work while physically in Australia even if it was on the internet. The fact that you were paid for the work by a UK company does not come into it. You are liable to file an Oz tax return.

At the same time you were not outwith the UK tax regime and you are a UK citizen so therefore liable to file a UK tax return.

The end result might be zero if there is no additional UK tax due above PAYE and if you can get the double tax relief from Australia. You will however have to go through the hoops.

I refer you back to my last comments.

I understand what you are saying.
I had read "income earned abroad" to mean that is where my income is derived from rather than where I physically was at the time.

Using eTax, entering my income as normal Salary makes lots of assumptions it was earned and paid in Australia (requiring an Australian company), and of course makes no allowance for foreign tax. Basically, my earnings don't fit in that category.

It does fit in the Foreign source income category. I can enter my UK income in the section which says "on which you have paid foreign tax on the foreign employment income". This income is then exempt from Australian tax.

So that is how I came to my conclusion that as I am paying UK tax on my earnings, I don't get taxed again by Australia (I do have medicare payments mind).

I think you are saying that my situation does not fit here, and somehow I should be declaring this income as being earned in Australia. For which eTax doesn't seem to be much good.

I am seeking professional advice by the way, but I'm still asking questions to try and understand as much as I can by myself.

Yes yours is a unique set of circumstances and will need expert help to resolve.

I agree with Lady M that your income would normally be declarable as item 20 - foreign income. You get your dollar figures by taking each monthly salary and the date it arrived in your bank and convert it at the exchange rate ruling on that day. Tables are on the ATO web site. You can deduct reasonable expenses related directly to the work you did.

That would be the straight forward part and under normal conditions you would then go on to calculate the amount of foreign tax you would be allowed to claim back but in your case there is no Oz income so the foreign tax calculation will not work properly.

You will need to rely on options available under the double taxation treaty hence your need for expert help.