Living in Australia but working for a UK company: The life of a digital nomad

Category: Australia & News

The number of people working from home in both the UK and Australia has increased dramatically over the last few years.

According to Stand out CV, the percentage of people in the UK working from home at least some of the time rose from 27% in 2019 to 44% in 2023. Meanwhile, Australian Bureau of Statistics data shows that 37% of people work from home regularly.

These increases have been driven primarily by improvements in workplace technology and boosted by the effects of lockdown which functioned as a catalyst for the rise in the numbers of people working remotely.

At a basic level, all you need to work at home are a strong Wi-Fi connection, a decent laptop, and the necessary business apps to keep in touch with colleagues and clients.

With the right technology and the appropriate job profile, it’s possible to work some distance from where your employer is based, even abroad.

Working abroad as a digital nomad

In theory, if you have the ability to dial into work-related meetings using Teams or Zoom, you could be working from anywhere.

Likewise, if you are dealing with clients or business partners, online communications offer ultimate flexibility in terms of how, and when, you communicate.

The term often used to describe such a remote working structure is “digital nomad”.

In its truest sense, digital nomads are people who are yet to set down firm roots. They travel freely while working remotely using the available technology and the internet.

On a lesser scale, however, an alternative version of being a digital nomad could also include working for the same company you worked for in the UK, but in a different country.

From a geographic perspective, with a minimal time difference, the European mainland has always been the most popular location for anyone from the UK looking to work abroad in this way for a UK-based company.

The United States is another common option, but with the right organisation and discipline, is there any reason why you couldn’t do it from the other side of the world?

Working for a UK-based company while living in Australia

One of the big issues you need to consider if you’re thinking about moving from the UK to live in Australia is your work plans.

You may be in the position that the company you work for in the UK have offices in Australia and it’ll be a simple process of relocating there. Indeed, this type of relocation may be at the core of your emigration plans.

Yet we’re becoming aware of an increasing number of people who are looking to continue to work remotely for the same company after they have emigrated, and who need to understand the various implications of this.

The time difference could be an inhibitor

Due to time differences between Australia and the UK – up to 11 hours, depending on geography and the time of year – working remotely for a UK-based company could present challenges.

Clearly this will be subject to the type of job you’re doing. For example, anything involving UK-based clients could prove problematic, but delivering digital work to an agreed specification less so.

However, with careful planning and a mutual awareness at both ends of the arrangements that you put in place, it should be possible to overcome most obstacles, even if it may mean you have some late nights or exceedingly early starts.

You need a valid visa to work remotely in Australia

The most important point to bear in mind is that you’ll need to ensure all your arrangements are above board and that you do everything strictly by the book.

For example, even if you are working for a UK-based company, you can’t work in Australia without having a valid and up-to-date work visa.

While the Australian authorities offer a wide range of visa options that may be appropriate, we would strongly recommend you get expert advice to ensure you apply for the correct one that suits your needs and circumstances.

Your tax status is dependent on your residency

Who you pay tax to depends on your residency status. If you’re not a UK resident, you will not have to pay UK tax on any of your earnings while you are living in Australia.

As an Australian resident you have to declare your income and pay taxes to the Australian government. To do this you will need to apply for a Tax File Number (TFN), which is similar to your National Insurance number in the UK.

Again, a taxation expert will be able to advise you of the best way to manage your financial affairs to ensure you’re paying the correct amount of tax, and making full use of any allowances you may be eligible for.

You’ll need to confirm your residency status to the relevant tax office

While you are perfectly entitled to work for a UK-based company while living in Australia, whether they treat you as a contractor or an employee will affect both your taxation, and the steps they need to take.

The UK and Australia have a Double Taxation (DT) agreement, meaning you won’t be liable to pay tax in both countries.

You’ll need to complete a form that confirms your residency status and send it to the relevant tax office in the state you are residing in. The ATO will then send this to HMRC, and you will then be eligible for full UK tax relief at source on your Australian earnings.

Your employer may have to take on withholding obligations

Part of your planning should include consideration of the responsibilities that your UK-based employer may have to take on as a result of you working remotely in Australia.

Based on your employment status, they may have certain withholding obligations with regard to your income. These will depend on whether you are seen as an employee of the company or a contractor.

If you are an employee, they will have to withhold amounts from your salary for superannuation. However, if you are a contractor, there will be no mandatory withholding, although it is possible to have a voluntary arrangement in this respect.

We have already recommended that you get expert tax advice and would suggest that you include your employer in the discussions you have.

Get in touch

If you have any queries regarding any aspects of your financial planning, please get in touch with us.

Please note

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

This article is for information only. Please do not solely rely on anything you have read in this article and ensure that you conduct your own research to ensure any actions you may take are suitable for your circumstances. All contents are based on our understanding of HMRC and ATO legislation, which is subject to change.