IT Contracting on a WHV?

[Tindog]

Hello! 

I'm currently working as as IT contractor in the UK (BI/Sql dev in insurance and investment banking). A friend has invited me to join him in Melbourne or Sydney for a year or more in Oct, which I'm pretty keen on and have wanted to do for a few years. 

I'm exploring my options at the moment, and whilst I could go straight for PR, it takes ages to come through and it's a big investment if I decide that I'm not enjoying it (I've holidayed twice to Oz, but visiting and living somewhere is a bit different). So I'm looking at doing a WHV whilst I decide, and then bridge onto PR when possible. 

Another pal suggested that maybe I could do contracting whilst there, and bill to my UK Ltd company as normal. Obviously I'd only be able to do contracts that are a 6 month maximum, but I'm trying to forsee other issues. It's an attractive prospect to me because I love my job! ? 

Has anyone had experience with this? 

My main worries are legalities (I don't want to do anything unlawful), and issues others may be able to identify. My accountant should be able to guide me on tax/vat/banking, but I'd appreciate any insight you have! 

[Tindog]

Forgot to say, if anyone is familiar with the industry and those areas, I'd love to know what the demand is like or if I'll be sorely disappointed! I want to arrive with realistic expectations. 

[Marisawright]

You would have no difficulties contracting in Australia but I think it would be easier doing it within Australia, rather than through your UK company.   You would need to get an ABN (Australian Business Number), and then you can operate as a sole trader.  It's very simple - you just invoice the company, quoting your ABN, and they pay you. 

The only catch is that if your gross income for the year exceeds $75,000 (which most people on WHV's wouldn't have to worry about, but in IT you might), then you'll have to register for GST and do monthly reporting, which is a pain in the proverbial.   Since it is a working holiday, you might decide to limit your work commitments so that you keep it under that threshold - much easier all round.  

If you don't have to register for GST, then all you do at the end of the year is include your business income and expenses in your personal income tax return, nothing special needed.

[Marisawright]

Another thought -

PR is going to cost the same whether you apply for it now or wait until you're in Australia.  If you apply now, you can submit the application and get on with your life while it gets processed. If you apply in Australia, you'll be on a bridging visa and in limbo - it's a stressful experience.

As you pointed out, you're going to be limited in the work you can do while on a WHV.   Also employers are more hesitant to employ people on a WHV -  they worry you'll disappear mid-contract because your backpacker mates are going on an expedition to Uluru or something.  You'll definitely get work but you'll likely have more gaps. Overall, I'd say the loss of income from that will be equivalent to the costs of PR, so why not have a little patience? 

[NickyNook]

There's no tax advantage to having your own company here any more if you're a contractor who tends to work for longish periods with the one employer. All the usual contractor tax loopholes were closed back in the early 2000s. It's different if you're the type of contractor who has lots of different clients in a single tax year, but usually IT contractors are not like that.

I had my own company 10 years ago but closed it down as the hassle involved was not worth it financially. Most IT contractors these days (in Sydney, anyway) are paid via some sort of umbrella company who take care of your super, tax, insurances etc for you - for a fee, obviously. 

 

[Paul1Perth]

If you have the choice I would pick Sydney. Some good money contracting.

[Tindog]

Thanks everyone, that's a lot of extremely useful info! It would make things a lot more straightforward to just go with an umbrella company anyway, otherwise I'll be stressing about tax for life. 

Had no idea about GST, in that case I'd probably only do 6 months of work under a WHV with a few well-timed days off to keep me under the threshold (maybe day rates are lower over there anyway?) then get on it when I'm more settled. Can I pay someone else to do the monthly reporting? (ie an accountant) or is there little point? 

Going straight for PR is one option I've considered, but I figured the hassle, stress plus money might not be worth it if I decide I don't want to settle there. I'm a commitmentphobe, lol. Is the wait time still quite long? When I researched a couple of years back it was 9 months, so if I wanted to go this year I'd need to get cracking! Will it be difficult to prove my employment history as a contractor? As my official "employer" is my Ltd company, not my clients. 

[Tindog]

4 hours ago, Paul1Perth said:

If you have the choice I would pick Sydney. Some good money contracting.

Hey Paul, do you think the market is better there then? I was originally aiming for Melbourne but a friend did suggest that Sydney would be a better option, so I'm considering it. 

I can't figure out how to work out the day rates over there because job ads never seem to have numbers against them. Eg here BI roles are generally £350-600 per day depending on experience. It's not all about the money, but good to know. 

[Marisawright]

15 minutes ago, Tindog said:

Hey Paul, do you think the market is better there then? I was originally aiming for Melbourne but a friend did suggest that Sydney would be a better option, so I'm considering it. 

I can't figure out how to work out the day rates over there because job ads never seem to have numbers against them. Eg here BI roles are generally £350-600 per day depending on experience. It's not all about the money, but good to know. 

I'd say if you have friends in Melbourne, go there.  There may be a few more jobs in Sydney but your rental expenses will be vastly higher.

[Tindog]

1 hour ago, Marisawright said:

I'd say if you have friends in Melbourne, go there.  There may be a few more jobs in Sydney but your rental expenses will be vastly higher.

This is the thing, I'm pretty flexible. My best friend lives in Adelaide, I love visiting her there but I've been told there's not much in the way of work. I've visited Melbourne and loved it. Never been to Sydney. 

The current plan is to meet a friend who's currently doing farm work for his WHV. We're going to live together and get on our feet (teamwork!), and we're both leaning towards Melbourne. But I think he'd compromise if Sydney was considerably better for work. 

So many options, it's so exciting! 

[Marisawright]

7 minutes ago, Tindog said:

This is the thing, I'm pretty flexible. My best friend lives in Adelaide, I love visiting her there but I've been told there's not much in the way of work. I've visited Melbourne and loved it. Never been to Sydney. 

The current plan is to meet a friend who's currently doing farm work for his WHV. We're going to live together and get on our feet (teamwork!), and we're both leaning towards Melbourne. But I think he'd compromise if Sydney was considerably better for work. 

So many options, it's so exciting! 

You can easily drive from Melbourne to Adelaide whereas you'd have to fly from Sydney, so that's a consideration. 

Actually I say "easily" but it is an 8 hour drive - however that's not bad by Aussie standards. 

Melbourne is nothing like the Australian dream - very unpredictable weather, no decent beaches, but it does have a vibrant cafe culture, great restaurants and lots of shows and events happening all the time.  Very hipster vibe.  Sydney is much more brash and I find it too frenetic (and too expensive), but it does have great beaches and gorgeous scenery.

[Tindog]

Just now, Marisawright said:

You can easily drive from Melbourne to Adelaide whereas you'd have to fly from Sydney, so that's a consideration. 

Actually I say "easily" but it is an 8 hour drive - however that's not bad by Aussie standards. 

Haha yes, my friends partner informed me that it's "only" 8 hours away!!

Melbourne is a lot closer, and it'd be nice to be able to see her easier. And I know I really like the place! 

[Tindog]

If I choose to get a WHV first, what is the bridging process like to PR? I gather there's a separate visa, does this then have the same restrictions as a WHV? 

[ali]

My understanding  is that you would apply for your PR visa as normal - if you're onshore you would be granted a bridging visa when your WHV expired whilst your PR visa application is processed.

[Marisawright]

15 minutes ago, Tindog said:

If I choose to get a WHV first, what is the bridging process like to PR? I gather there's a separate visa, does this then have the same restrictions as a WHV? 

 

The requirements and process to apply for PR are the same as if you applied from the UK, you don't get any concessions for your Australian experience.   Once you've applied, you go on a bridging visa.   

As I understand it, the main problem with a bridging visa is that you can't leave Australia, even for a holiday.   Also, the bridging visa often has the same conditions as the visa you have when you apply, i.e. in your case, the WHV.    Officially, the processing time is about the same whether you apply onshore or offshore, so that means you could be stuck on the bridging visa for 9 months.   I'm not an expert so there may be ways around all that...

[Tindog]

Makes sense, thanks both. I don't know if I could deal with 9 months of no holidaying! Although I suppose there's a lot of Australia to explore

You've given me a lot to think about...

[Marisawright]

5 minutes ago, Tindog said:

Makes sense, thanks both. I don't know if I could deal with 9 months of no holidaying! Although I suppose there's a lot of Australia to explore

You've given me a lot to think about...

I just noticed your friend invited you over for October.  That's enough time to get a PR application in.   I think you should do it - sure, it'll cost you some money, but you'll be able to get much better jobs when you do arrive in Australia so you'll recoup the investment easily.

[Tindog]

Just now, Marisawright said:

I just noticed your friend invited you over for October.  That's enough time to get a PR application in.   I think you should do it - sure, it'll cost you some money, but you'll be able to get much better jobs when you do arrive in Australia so you'll recoup the investment easily.

Really?? I thought it was about 12 months for some reason. 

True - I'll probably get better contracts as a resident, so it theory it should pay for itself quite quickly. That's a really good point! 

[Tindog]

Sorry, more questions for anyone who knows the answer...

I'm looking at the points breakdown on the homeaffairs site:

First question - does an English bachelors degree count for the 15 points? I'm hoping I haven't  misinterpreted the wording. 

Secondly - "An award or qualification recognised by the relevant assessing authority for your nominated skilled occupation." 

Does anyone know if this includes internationally recognised certification rather than those awarded by industry bodies? Specifically, I'm thinking about Microsoft Certifications which I'm studying for over the next 3 months. 

If the answer to both of the above is yes then I'll have 90 points. 

I'm guessing I'll need a migration agent to help me figure out which occupation I technically fall under, it's a weird one! 

[Tulip1]

8 hours ago, Tindog said:

This is the thing, I'm pretty flexible. My best friend lives in Adelaide, I love visiting her there but I've been told there's not much in the way of work. I've visited Melbourne and loved it. Never been to Sydney. 

The current plan is to meet a friend who's currently doing farm work for his WHV. We're going to live together and get on our feet (teamwork!), and we're both leaning towards Melbourne. But I think he'd compromise if Sydney was considerably better for work. 

So many options, it's so exciting! 

I've never been to Sydney so cannot really comment on what it's like. I do however know many who've  been to Sydney and Melbourne and everyone of them would say Melbourne wins by a mile. 

[deryans]

20 hours ago, Marisawright said:

You would have no difficulties contracting in Australia but I think it would be easier doing it within Australia, rather than through your UK company.   You would need to get an ABN (Australian Business Number), and then you can operate as a sole trader.  It's very simple - you just invoice the company, quoting your ABN, and they pay you. 

The only catch is that if your gross income for the year exceeds $75,000 (which most people on WHV's wouldn't have to worry about, but in IT you might), then you'll have to register for GST and do monthly reporting, which is a pain in the proverbial.   Since it is a working holiday, you might decide to limit your work commitments so that you keep it under that threshold - much easier all round.  

If you don't have to register for GST, then all you do at the end of the year is include your business income and expenses in your personal income tax return, nothing special needed.

 

What marisa said is pretty spot on; 

Might try and explore consultants umbrella outfits,  they're pretty much the same as the umbrella's in the UK, and designed to keep you below the threshold and outside of the Aussie version of IR35  - aka  - alienation of personal services act 2007

This is a well trodden road by many including myself  x2 times, and with your skillset  Sydney or MLB is the only choice, you'd be wasting your time in Adelayed or Bris-vegas.

Best check out contractoruk.com and ask around, you'll never know who might have the answers....

https://www.contractoruk.com/contracting_overseas/it_contracting_in_australia_money_tax.html

https://forums.contractoruk.com/accounting-legal/98775-short-term-contract-work-australia.html

 

[deryans]

8 hours ago, Tindog said:

Sorry, more questions for anyone who knows the answer...

I'm looking at the points breakdown on the homeaffairs site:

First question - does an English bachelors degree count for the 15 points? I'm hoping I haven't  misinterpreted the wording. 

Secondly - "An award or qualification recognised by the relevant assessing authority for your nominated skilled occupation." 

Does anyone know if this includes internationally recognised certification rather than those awarded by industry bodies? Specifically, I'm thinking about Microsoft Certifications which I'm studying for over the next 3 months. 

If the answer to both of the above is yes then I'll have 90 points. 

I'm guessing I'll need a migration agent to help me figure out which occupation I technically fall under, it's a weird one! 

two things here,  Immigration who follow the regulatory and quite often ridiculous assessment. If you're anglo, english speaking, under 32 (someone jump in and correct me) and have a basic BA degree, you'll make 100 points in your sleep.

and

The likely hiring manager at a place in Sydney or Mlb who has a skills shortage who will themselves have likely worked in London, Dublin, Dubai, Hong Kong ..... you get the idea, well they'd offer you a job tomorrow.  certifications are nice, but , 1-2 years or even 12 months at a big name investment bank trumps them all.  

Problem with certifications is that 1/2 the indian subcontinent and eastern europe has them, so their value has diminished, I'm not intending to discriminate, just to illustrate.

 

You don't need a migration agent if english is your first language, you need precision, patience and persistence , its not hard,  migration agents like to make it seem so.  we did it all on our own , took us a few months, but we did it. Then again, if you have the cash ?  splash.

 

 

 

 

 

 

 

[Marisawright]

36 minutes ago, deryans said:

You don't need a migration agent if english is your first language, you need precision, patience and persistence , its not hard,  migration agents like to make it seem so.  we did it all on our own , took us a few months, but we did it. Then again, if you have the cash ?  splash.

 

I agree, your application should be nice and straightforward so you don't NEED an agent.  However, the application process is very fiddly and you need to work through it with extraordinary attention to detail.  If you've got a busy life, it can be tempting to rush it - and one mistake and it will get rejected.  So on balance, in the interests of speed and accuracy, I would consider hiring someone like W Russell or Raoul on these forums for peace of mind.

[Tindog]

12 hours ago, deryans said:

two things here,  Immigration who follow the regulatory and quite often ridiculous assessment. If you're anglo, english speaking, under 32 (someone jump in and correct me) and have a basic BA degree, you'll make 100 points in your sleep.

and

The likely hiring manager at a place in Sydney or Mlb who has a skills shortage who will themselves have likely worked in London, Dublin, Dubai, Hong Kong ..... you get the idea, well they'd offer you a job tomorrow.  certifications are nice, but , 1-2 years or even 12 months at a big name investment bank trumps them all.  

Problem with certifications is that 1/2 the indian subcontinent and eastern europe has them, so their value has diminished, I'm not intending to discriminate, just to illustrate.

 

You don't need a migration agent if english is your first language, you need precision, patience and persistence , its not hard,  migration agents like to make it seem so.  we did it all on our own , took us a few months, but we did it. Then again, if you have the cash ?  splash.

 

 

 

 

 

 

 

Thanks, that's great info! 

MS certs are pretty common, I'm doing them anyway and wondered if they counted towards points rather than getting work (which I'm not too worried about, I've got a strong CV and an adequate savings pot). If they do count then I'll get my exams booked in sooner rather than later - if not, I'll keep procrastinating :-D

I'm tempted to hire one anyway, like Marisawright suggested...I trust myself, but maybe it'd be worth it for peace of mind? I'll see.

Thankyou for your wonderful advice! 

[Tindog]

12 hours ago, deryans said:

 

What marisa said is pretty spot on; 

Might try and explore consultants umbrella outfits,  they're pretty much the same as the umbrella's in the UK, and designed to keep you below the threshold and outside of the Aussie version of IR35  - aka  - alienation of personal services act 2007

This is a well trodden road by many including myself  x2 times, and with your skillset  Sydney or MLB is the only choice, you'd be wasting your time in Adelayed or Bris-vegas.

Best check out contractoruk.com and ask around, you'll never know who might have the answers....

https://www.contractoruk.com/contracting_overseas/it_contracting_in_australia_money_tax.html

https://forums.contractoruk.com/accounting-legal/98775-short-term-contract-work-australia.html

 

I'm terrified of those forums, I've lurked for a couple of years (whilst I was trying to decide whether to go contracting) and there's some real "characters" to put it lightly! But I will ask, thankyou!