Australian citizen living in UK doing remote work for Australian business - what are my tax obligations?

Question

I'm an Australian citizen living in the UK and I work full time and pay tax in the UK. I've been approached by an old friend who has established a consultancy business in Australia and I would be doing remote work for them on an ad hoc basis. All work would be conducted by me remotely, from the UK. I have an Australian bank account so I would be paid by the business into my Australian account and I would transfer the money to my UK bank account periodically. I do not qualify for an ABN (did try and application was rejected as not carrying out work in Australia).

I want to establish what my tax obligations would be in Australia and the UK? Would I declare the income on my Australian tax return and/or complete a Self Assessment tax return in the UK? This would be a secondary job for me; I'm already paying income tax in the UK related to my primary full time job. I hold an Ancestry visa in the UK and can work freely.

I'm just not really sure where to start on how to make sure I'm doing the right thing in both countries.

Answer 1

As someone who is normally resident in the UK, you need to pay UK income tax on any income you earn from overseas (https://www.gov.uk/tax-foreign-income). You will need to complete a self-assessment and declare the income. Failure to do so will likely result in allegations of tax fraud in the UK since you will not be able to explain why you're receiving a semi-regular payment from an overseas account that you control, noting that the UK and Australia are happily cooperative on tax fraud matters and can easily see where the money is coming from at both ends of the transaction.

Since you are not normally resident in Australia, you do not need to pay income tax on your earnings, although you may need to explain your arrangement to the tax office (https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Income/Foreign-income-of-Australian-residents-working-overseas).