British tourist wins legal battle against Australia’s backpacker tax – ‘huge difference’

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Backpacking through Australia is a rite of passage for many young Britons looking for an adventure. Backpackers can be on a working holiday visa which is offered to foreigners aged between 18 and 31 from certain countries.

Briton, Catherine Addy, argued that she had been unfairly taxed while working as a waitress in Sydney.

She claimed that the tax, which was issued in 2017, discriminated against her due to her nationality.

The Australian High Court ruling said: “The question is whether that more burdensome taxation was imposed on Ms Addy due to her nationality.

“The short answer is yes. When the position of Ms Addy is compared with that of an Australian national, as it must be, that is the only conclusion which may be drawn.”

Ms Addy told ABC that the thousands of dollars owed to her would make a “huge difference in her life”.

Other backpackers on a working holiday visa in Australia may now be able to have their tax assessments reviewed.

Australians have a tax-free threshold of A$18,200 (£9,900) while backpacker visa workers are taxed 15 percent on income up to A$37,000 (£20,200).

The backpacker tax is paid from the first dollar earned by the foreign worker in their chosen workplace.

Court submissions said that Ms Addy had to pay A$3,986 (£2,186) in tax while an Australian worker would have paid less than half that.

An Australian worker in the same position would have paid a very different amount at just A$1,591 (£865) .

Ms Addy earned A$26,576 (£14,456) working as a waitress at two Sydney pubs between January 2017 and May 2017.

The Australian Taxation Office warned that the ruling only applied to working backpackers who had been resident in Australia for tax purposes since 2017.

The ruling also only applies to people from the UK, Germany, Israel, Japan, Norway, Finland, Turkey or Chile.

A spokesperson said: “Most working holidaymakers will be non-residents as they are in Australia to have a holiday and support that holiday.”

The spokesperson said that more guidance would be provided by the Australian tax office soon.

The backpacker tax was successfully challenged in the Federal Court in 2019 but the tax office won an appeal in August 2020.

Ms Addy went to the High Court which overturned the appeal and reinstated the 2019 federal ruling.

Waitressing is a popular job for British backpackers travelling across Australia but working at a bar will require a certification.

Anyone serving alcohol in Australia needs to complete the Responsible Service of Alcohol Training.

Retail work or tourism industry jobs are also popular choices for British backpackers looking to earn in Australia.

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