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Posted Tue, 28 May 2024 00:22:27 GMT by MD
Hi there, I have some questions regarding tax when working for an overseas company whilst living in the UK. Posting on behalf of my partner who is moving here next month to live with me. First, some context on his specific situation: My partner will be moving to the UK indefinitely from Australia (he is a dual AU-UK citizen) but has agreed with his current employer he will continue to work for them in the UK. He will be paid in AUD to his Australian bank account. The company is based in Australia and does not/will not have a UK presence. He will remain an employee, not a contractor. He will be working from home in the UK (will not be working in an office, and does not do any sales or contract work). He is currently in the process of finding out from the Australian side whether taxes should/will continue to be taken out of his Australian pay once he’s in the UK and what actions he may need to take on that end. My understanding is that once he’s in the UK, he will be considered a UK tax resident. So with that, we know that tax will need to be paid in the UK but we’re unsure how this would actually happen. Australia and the UK have a double taxation agreement so we know that he shouldn’t get taxed twice. 1) If Australian taxes continue to be taken from his Australian pay: how does this get rectified in the UK? Is this done via self assessment? 2) If taxation on the Australian side stops, as tax will be paid in UK: how should tax be paid in UK? Self assessment or DPNI scheme? The company will not set up PAYE in UK. Depending on the above determining how tax should be paid in the UK, what will be the frequency of taxation/when does action need to be taken? Is there anything we can set up before he arrives in the UK? Those are the immediate questions but it would also be helpful to know what he will need to do (if anything) regarding the tax he’s paid so far this year in Australia after he moves, from a UK perspective. Please let me know if any of the above is unclear or further information is needed. Thank you in advance for any help or guidance!
Posted Fri, 31 May 2024 14:01:44 GMT by HMRC Admin 19

When he arrives in the UK, any income he earns from his Australian source, will be taxable in the UK and should be declared in a Self Assessment tax return, in the foreign section. You can see guidance at article 14 of the tax treaty:

2003 Australia-UK Double Taxation Convention - in force 

He should no longer pay tax in Australia on this income from the date he arrives in the UK. He will need to organise this with the Australian tax authorities.  

He will also need to review the guidance on statutory residence at RDR3 and take the statutory residence tests here: 

RDR3: Statutory Residence Test (SRT) notes

This will determine whether he also needs to include his foreign income up to the date he arrived in the UK.  

For more information, you would need to contact our Self Assesment team.

Self Assessment: general enquiries

Thank you.

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