Hi Eimar - interesting project for you.

When sending someone abroad some of the most common costly mistakes come from :

• failure to take into account the local tax and social security obligations (registration, payment and withholding, employer and employee declarations....)
• not understanding that providing accomodation is a benefit in kind - on which tax will be due, and whose real cost will be more or less doubled if the tax to the person is to be neutralised by grossing up the benefit...
• not being compliant with local labour law 
• assuming that UK package elements are automatically extendable to the foreign country (pension, life insurance, medical cover.....), when this is rarely the case - talk to your providers to check....
• not checking the tax (UK and Australia) implications for your UK company if your staff are generating Australian revenues in its name 

My advice is to work with a company like Employment Conditions Abroad (ECA) to build up a suitable checklist for your specific situation. Not cheap, but less expensive than the heavy costs arising making from basic errors

Hi Eimear

Had to do exactly this, long ago, in connection with colleagues going out to Australia to oversee the construction of steel making plant there. May be well out of date, but some general observations may possibly be of some use as background.

For a start, wouldn't attempt to do this without access to country-specific detailed guidance on expatriate employee postings, such as Employment Conditions Abroad Ltd and other specialists publish. As well as providing the necessary data on accommodation / cost of living / local salary levels etc that's going to be essential to devise a remuneration package for individual employees, immigration and local tax social security and health care arrangements neeed to be fully understood and allowed for.

It's likely to be far simpler if you can do this on a twelve month business visitor visa, but obviously there's an immense number of implications and necessary arrangements.

You'll need clearance from the Consular Section of the Australian High Commission in London or a regional consular office: in itself a big, long job, but recall I found them quite willing to help. Try your utmost to make friends with them.

Others may have more recent experience and hope will be along soon.....

One thing I'm aware of (just from a friend being out there at the moment rather than from a work point of view) is that their healthcare is through insurance and government funding so it may be a cost to keep in mind?

In reply to David:

Ray of far greater and far more recent experience than I posted concurrently I'm glad to see

Hi Eimear, if it helps I used to have some contact with a London based firm for guidance with expatriates. Ferguson Snell (fergusonsnell.com) helped me with a lot of assistance so they may be worth a call. I have to say they were NOT cheap but very efficient and reliable. My contact was a chap called Sean Hedgley, he may have moved onto a more senior role since I last contacted them so you may need to speak to someone else but Sean was always very supportive. Good luck.

Personally I would look very seriously at the business case for doing this. As a rule of thumb it can cost 3-4 times their base pay to do this (depending on family etc) and its questionable if you will get that ROI back.

Maybe worth looking at shorter sharper well defined interventions of weeks rather than 12 months

In reply to Keith:

Keith's point about ROI is well made, and should be seriously considered

Although there are many imponderable advantages to using a current, experienced UK member of staff for starting activities in OZ (product knowledge, company insight, company vision, embedding company processes.....) the 3-4 times cost of an expat vs a local employee is probably close to the mark (in my experience).

If OZ is to be a major market in your business plan, it could be worthwhile sending an expat, otherwise evaluating alternative ways of achieving your objectives is probably recommended

In reply to Ray:

Hi Ray,

Thank you very much for the advice. I didn't realise accommodation was a benefit in kind so that's some interesting news! I've had a look at Employment Conditions Abroad and it looks exactly what I'm looking for!

Thanks again!

In reply to Eimear:

I may be wrong about the hypothetical accommodation in Australia being deemed a  benefit in kind but wouldn't have thought so, if the employee on assignment there was normally UK domiciled and eg needing to keep / maintain their own domestic UK accommodation.

But applicable taxation rules will depend on the precise circumstances and be just part of a very big and complex  jigsaw of provision that needs to be put together. Obviously possible tax liability in U.K. will interplay with any incurred in Australia and then with any dual taxation treaty etc arrangements between the two countries. Sometimes it's better by far for  the UK employer to pay for an expert outside tax lawyer to advise and sort it all out.

See too such as:

In reply to David:

On the basis of working for a year (or so) in OZ, unless there are regular trips (probably monthly) to and from the UK (expensive in time, airfaires, and performance due to jetlag), and unless no more than 182 days are spent in the country in a tax year, then IMHO the Australian tax authorities will probably consider the person to be tax resident.

This would mean that their normal place of work (for tax purposes) would be Australia, and that in consequence any accomodation provided at the place of work will almost certainly be a BIK (since working at your 'normal' place of work. For info, The "fringe benefits" regime currently stands at a punitive rate of 49%

My understanding is that the 2003 UK-Australia dual taxation treaty (here), will only come into play if the person is non-resident for Australian tax purposes, but nontheless receives remuneration arising from work in Australia

All this is a simplified overview, and as you rightly say, getting professional advice from a company like ECA in setting things up - plus support from a local tax advisor once in situ - is an absolute must

Ray

In reply to Annette:

Thanks Annette, we don't provide medical insurance to our employees in the UK but definitely something to consider providing in Aus as they wouldn't have access to NHS! There really is so much to think about!

In reply to David:

Thanks David,

will certainly contact the Australian High Commission today and see what visa is available to us. I'm not sure there is a 1 year business visa available to cover our situation. It would be great if there were!

Regards,
Eimear.

You also need to think about Cost of Living allowances also. These can be quite expensive to say the least as OZ is more expensive for food etc than the UK. Also bear in mind that a local UK salary just won't cut it in OZ. Due to the cost of living, they also get paid significantly more than in the UK. AirInc do cost of living tables. What you really need is a company that specialises in Global Mobility. They usually offer a full service but are expensive.

In reply to Catherine Haycock:

A Working Holiday Maker visa might be an easier route if any of your employees are 30 or younger at the time of their visa application.* (conditions might have changed since I was last aware of that visa class)

In reply to Paul:

Nice idea Paul, but if the principle reason for being in Australia to represent a foreign company and develop its business then that will be automatically excluded as a possibility, since the primary purpose of the visa is to facilitate a "holiday period". To quote the programme description "Work in Australia must not be the main purpose of the visa holder’s visit"