Taxes On Income But Living Overseas

ian360

Hello,

I am wondering if somebody might have an answer to my tax query.

I work as a freelance web designer and was recently offered some work from an agency in England. However, I live in Australia so was told from the agency that I could not do the work as I am an Australian resident. But I then explained to him that I am actually English and a British citizen. The boss said if that was the case then it would be okay for me to do the work as long as I send the invoices from a UK address and he would pay me using BAC. This won't be a problem as I can just send the invoices from a friend or family member's address in England. So basically I would get paid in England and then transfer the money to Australia.

But I was wondering how would my taxes be affected by this? Will I have to pay any taxes to the UK Inland Revenue on any income earned even though I don't live there? I am pretty sure that I will have to pay taxes in Australia because obviously it is classed as income, however I do not want to pay for the taxes twice on one paycheck. In addition, I'm not registered with the Inland Revenue as a designer in the UK anymore as I have not been to England for a number of years now.

Thank you in advance for any advice.

Ian

System

You would need to register as non-resident with UK income. I'm not 100% on the finer details but you will not pay tax twice because of the double taxation agreement between the UK and Australia.

As far as taxation is concerned - if you pay tax in the UK the Australian government will give you credit for having paid that tax and should not ask for any more unless their level of tax is higher than here.

For example:- you are paid £1000 in the UK and 20% tax = £200 is deducted
If Australia charges 25% then you will have to pay them the equvalent of another £50. If Australia charges 15% then they will probably not give you a refund because you paid the tax to the UK authorities.

Try this link for information on non-residency issues-

http://www.hmrc.gov.uk/international/index.htm

This link gives you contact details for the Centre for Non-Residence and apparently they accept emails to.

http://search2.hmrc.gov.uk/kbroker/hmrc/contactus/search.ladv?sr=0&as=1&cs=ISO-8859-1&sc=hmrc&sf=&sm=0&nh=50&ha=34&tx0=366876&fl0=__dsid:&tx1=2020&raction=view

Cook_County

This is not UK source income because you do all of the work in Australia and are not UK resident.

There is no UK tax except perhaps for withholding by the payor, but that is not your issue.

ian360

Wow thanks guys. I didn't know this. I wasn't sure because when I was in England I once worked for a US company and they taxed me in the US and then again in the UK and I didn't wanna do that again...

Cook_County, what does "withholding by the payer" mean?

Cook_County

US entities will frequently withhold US taxes to protect themselves. This is less common in the UK & not usually required.

ian360

Ah okay thanks... So how do I go about registering for this so that I don't get taxed twice?