Expat query - Where do I pay tax?

joAnn

I am now resident in Australia, having moved out here last year. I have been offered the opportunity to do some work for a UK based company, where I will research potential opportunities for links to business out here. Question is, where will I be expected to pay tax on this particular income? Is it UK or will it be Australia, where I already pay tax on employment I have out here.
I phoned the HMRC, but was left on hold for ages while the guy tried to find out, and eventually got cut off. Please don't advise me to call them again!!!

pjclar02

Hello there

It depends upon many factors. However, if you are living permanently in Australia then you will be liable for UK tax only on income "earned" in the UK.

If you are employed by this UK based company, then they should operate an NT PAYE code for you which means you do not get PAYE deducted trhough payroll. This will probably have to be declared in Australia but you would have to take local advice on the Australian side of things.

If you are self-employed, then again as long as the work is not undertaken in the UK you will not be liable to tax here.

On a side issue, did you complete a P85 when you left the UK to secure any tax refunds you were due and to notify HMRC that you were no longer present in the UK?

If you can post up dates you left the UK, and amount of days you will return to the UK - then I can verify that the above is correct.

joAnn

Hi,
Many thanks for taking the time to respond. The work I will be doing is taking place over here - all online really, just carry.ing out research for a UK based company and then feeding back or trying to forge links. The money will be paid into my UK bank account. I will be self employed, working on a contractual basis.

What is NT PAYE? I have not heard of that.
I did not yet fill in a P85 - had no idea about it until recently. I did ring the tax office last year and explained I was leaving and asked if I was due a rebate and they said no as it would have been calculated already, but I think I spoke to a real idiot there! I informed Child Benefit and no longer receive pay for my daughter. We left in early May last year.
I don't plan to be in the UK very much, mainly just for holidays possibly once a year. We spent 4 weeks there over Xmas for the holidays, but probably wont be back again for a while.
Also, do you have any knowledge of tax concerning a potential Buy to let we are thinking of purchasing in the UK? The mortgage will take up most of the rent, but not sure what tax implications are!
Thanks for any comments you are able to make on this- dont want to get into trouble over taxes!

pjclar02

Hello there

The NT PAYE thing will not apply to you if you are self employed. If you were a non-resident employee, then the NT code would mean you paid "No Tax" through payroll.

As you are self-employed and all your work will be undertaken outside of the UK, and you will not be UK resident you have no obligation to register as self-employed over here or pay UK tax.

I would suggest completing a P85 now and submitting it, and also look into whether you are due a tax rebate for your year of departure - I wouldn't go on the advice of an HMRC helpline it is worth double-checking.

The buy-to-let property will be liable to UK tax, to the extent that the rent exceeds the mortgage interest and other costs. As a non-resident landlord, I would suggest you complete form NRL1 to ensure you can get your rent gross, otherwise you may find that tax is withheld at source.

Just to throw something else into the mix - just to complicate things further....if you do intend to return to the UK in the future, you may want to look into keeping your UK NIC contributions up-to-date in case you would like to receive state benefits later in life.

Hope this helps.