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TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 17116
Experience:  International tax
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A friend of mine worked in Australia on a visa and left less

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A friend of mine worked in Australia on a visa and left less than 6 months in. I understand that she claimed residency and as such got less tax deducted via her employer. The Tax Authorities have caught up with her and sent her a demand to her uk address for $2k+. Do the Australian tax office have reciprocal agreements with HMRC to recover the debt? if not, what action can the ATO take?
The exchange of information is covered in the tax treaty between Australia and the UK.
Exchange of information
1 The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant to the administration or enforcement of the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes to which this Convention applies insofar as the taxation under those laws is not contrary to this Convention. The exchange of information is not restricted by Article 1 of this Convention. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic law of that State and shall be disclosed only to persons or authorities (including courts and
administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes to which this Convention applies. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall obtain that information in the same manner and to the same extent as if the tax of the first-mentioned State were the tax of that other State and were being imposed by that other State, notwithstanding that the other State may not, at that time, need such information for the purposes of its own tax.
In no case shall the provisions of paragraphs 1 or 2 of this Article be construed so as to impose on a Contracting State the obligation:
(a) to carry out administrative measures at variance with the laws or the administrative practice of that or of the other Contracting State;
(b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other contracting State;
(c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or to supply information the disclosure of which would be contrary to public policy.

HMRC would not recover the tax for the ATO. They would offer assistance in finding the accounts of the individual and assist the ATO in the courts of the UK to attach accounts to recoup the amount due.
Customer: replied 3 years ago.

Hi, thanks for that.


Further to this, are you aware whether the ATO have a history of chasing down these debts?

I also heard that they would ban you from coming back into the country until the debt is paid?


Basically, my friend is considering the consequences of not paying this demand.



Yes, the ATO has a history of collecting the tax owed to the government.
They have stopped individuals from reentering based on tax debts. They have also arrested (those amounts owed were significant).

The ATO has formal powers under section 255 which can require a party in control of moneys belonging to a non-resident to effective pay to the ATO, as agent of the non-resident, an amount required by the Commissioner. If any Australian entity were to still owe an amount to the nonresident the ATO could demand the payment.
Customer: replied 3 years ago.

thank you - one last question.


when you say 'a party in control of moneys belonging to a non-resident' would this include a bank or an employer?



Yes it would.
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