Living and working in Australia but contracting in UK

[nomey]

Hi all,

I hoped you could give me some advice on my situation.

I currently work in the UK but I'm quitting my job at the end of the month to go and live and work in Australia. The company I currently work for would like me to do some work for them after I leave on a contract basis.

I'm unsure as to how my tax arrangement would work in the UK. Am I best getting paid into my UK bank account and then filling in a tax return for the UK every year? I won't be doing much work and could be below the tax free allowance so would this mean I could make £9440 next financial year without being liable for tax?

Alternatively am I best setting up a limited company? I'm not sure this is the best option as I won't be doing that much work and it could mean extra paperwork and hassle for very little benefit.

I've talked to an umbrella company but they told me I could use them as I wouldn't be living in the UK.

If anybody can give any advice or pointers then it'd be greatly appreciated.

Neil

[northernladuk]

If you actually do some research on the forums you will find another thread, currently only 5 below this one, asking exactly the same question.

[nomey]

If you actually do some research on the forums you will find another thread, currently only 5 below this one, asking exactly the same question.

Do you mean the thread entitled 'Aussie resident and placement, but UK agency.'?

I've already read it and, as far as I understood, the poster is in a different position to me. He is asking for the best way to invoice the agency, whether it is as an Umbrella Employee/UK Ltd Company working offshore or as an Australian company invoicing an agency in the UK.

I'm not dealing with an agency and I'm a British citizen. I was asking if it's possible to get paid into my UK bank account and then fill in a tax return every year or if I'd have to set up a limited company.

[northernladuk]

So maybe this...

http://forums.contractoruk.com/umbre...composite.html

If you go LTD you will be inside IR35 so will be only slightly better off than going umbrella.

[BlasterBates]

If you are working exclusively in Australia, you will not be taxed in the UK. Effectively you export to the UK. In this case just set up an Australian company.
If the agency insists on a UK co, you could keep one going but you should then bill the UK co from your Australian co. In this particular there would only be a corporate tax charge in the Uk. You could get a UK accountant to be director and run the company as it wouldn´t legally be possible for you to be an employee.

[nomey]

So maybe this...

http://forums.contractoruk.com/umbre...composite.html

If you go LTD you will be inside IR35 so will be only slightly better off than going umbrella.

I've been told that I can't use an umbrella company as I will not be living in the UK.

I realise that contractors rarely operate as sole traders but the usual reasons don't apply to my case. The company I'll be doing the contract work for is a small company and I've worked there 5 years so we're on good terms. It is quite an informal agreement, basically they want me to help them out for a few days when they get busy.

I wasn't sure if invoicing the company in the UK as a sole trader and simply doing my tax return every year was the easiest and most tax efficient way of doing it. Especially as I won't be doing much work for them so will be below the tax free allowance and not liable for any tax in the UK.

If I did get a LTD then I don't see how I'd be inside IR35 as I'd only be working when the company required and when I was available to do the work. I wouldn't have any employee rights whatsoever.

If I'm legally allowed to operate as a sole trader and can make £9440 for the next financial year without being liable to pay any tax then I can't see the benefit of forming a LTD.

[Funkywood]

I was in a similar situation when I went to Australia while continuing to work for a UK client 3 years ago. Not saying that it strictly the legally correct thing to do but I went with an umbrella and have had no problems. Once that ended and I got a job with an Aussie client I switched to an Aussie umbrella. If I'd gone the Ltd route I could have tried to spread my £s in the UK into the next tax year while I was working over there but I thought that was pushing it a bit.