As the 2025 Ashes series heats up and cricket fans on both sides of the world gear up for another classic showdown, we thought we’d bring a friendly rivalry to the world of tax.
Below, we have taken a light-hearted look and have pitted the Australian and UK tax systems against each other to see which country will take home the Ashes of Tax for the 2025-26 tax year.
| Australian Tax System | UK Tax System | |
|---|---|---|
| Tax Year | 1 July – 30 June | 6 April – 5 April |
| Who is required to lodge a tax return? | All tax residents and non-residents with any Australian sourced income (subject to exclusions) | For most individuals, a tax return is not required if only employment income is earned, as tax on salary is withheld via payroll However, self-assessment rules apply and you must lodge a tax return if any of the following apply: – Self-employed and earned >£1,000 – Business partnership – Capital gains on asset disposal – Claiming tax relief/deductions – Untaxed income (rental income, tips and commission, income from investments, foreign income) |
| Tax Return lodgement and payment deadline | Lodgement due date 31 October following the end of the tax year (or 15 May of the following year if lodged by a Tax agent) Payment due date Varies by the date of lodgement of the tax return. If the return is due by 15 May, the following applies: – return lodged on or before 12 February > 21 March – return lodged between 13 February to 12 March > 21 April – return lodged from 13 March onwards > 5 June If the return is due on a date other than 15 May, the payment is due on the later of 21 days after the lodgement due date or when the notice of assessment is received. | Lodgement due date 31 January following end of the tax year (31 October if filing a paper return). Payment due date 31 January following end of the tax year. |
| Tax Rates | Australia has a progressive tax system based on taxable income:  | The UK has a progressive tax system based on taxable income:  *AUD equivalents are an estimate based on Nov 2025 conversion rates. |
| Social security contributions | Medicare Levy of 2% (+ up to 1.5% surcharge if the individual has no private health insurance). Non-residents and temporary residents may be exempt. | Individuals are required to make National Insurance contributions. Contributions are calculated based on employment status (e.g. employed vs self-employed). For Class 1 payments (employees) the 2025-26 rates are: 8% on £242–£967/week, 2% over £967/week |
| Capital Gains Tax | Capital gains are taxed at an individual’s marginal tax rate. A 50% discount is applied for individuals who own a capital asset for at least 12 months. Main residence exemption is available for individuals who sell their principal place of residence. | Capital Gains Tax allowance of £3,000 ($6,080 AUD)* (up to £3,000 of gains is tax exempt). Gains from residential property or other chargeable assets above this threshold will be taxed at the following rates: – Individuals with a “basic” tax rate > 18% – Individuals with a “higher” or “additional” tax rate > 24% Any gains from carried interest if you manage an investment fund will be taxed at a rate of 32%. Private Residence relief is available for individuals who sell their main home. *AUD equivalents are an estimate based on Nov 2025 conversion rates. |
| Inheritance Tax | Australia does not have Inheritance Tax. | The standard Inheritance Tax threshold is £325,000. This can be increased to £500,000 where the home is passed to children or grandchildren of the deceased. Where an estate is valued over £325,000, there is a standard 40% Inheritance Tax rate (subject to concessions). This rate is only applied to the value of the estate above the threshold. |
| Dividend Tax | Dividends are taxed at an individual’s marginal tax rates. Franking credits through the dividend imputation system can be applied to reduce the amount of tax payable. Franking credits may be refunded for low income earners. | No tax is paid on dividends that fall within the £500 dividend allowance. Tax paid of dividends above the dividend allowance is based on personal tax band: – Basic rate – 8.75% – Higher rate – 33.75% – Additional rate – 39.35% |
| Fringe Benefits | Fringe benefits are taxed to the employer, and not the employee. Certain fringe benefits are ‘reportable’ and may affect income testing for certain government subsidies and payments. | Fringe benefits are taxed to the employee, at the value of the benefit. There are some benefits that are exempt. |
If you’re trying to pick a clear winner for the Ashes of Tax, you may need to call for a third umpire decision, as it’s shaping up to be a close match with both tax systems hitting boundaries and taking wickets.
Australia’s openers start strongly with a common-sense approach to a financial year – beginning of a month in the middle of the year rather than 5 April arising from some quirk in the change from Julian to Gregorian calendar.
The UK system’s 3 and 4 batsmen lay a solid foundation with a strong first innings due to its higher tax-free threshold, marginal rate changes occurring at higher income levels and simplicity of filing (or not filing) tax returns. Also, it hits some boundaries for its deduction allowances which enables more efficient tax planning and reducing overall administrative compliance obligations.
However, Australia comes back with a solid middle order partnership due to its lack of inheritance tax.
Australia’s wicket keeper-batsman also gets the nod due to its dividend imputation system with the possibility of refundable franking credits for low-income earners.
While both teams have a good slips cordon for social security contributions (with Australia’s Medicare Levy and the UK’s National Insurance), the UK is caught behind with its higher contribution rates.
Finally, the bowlers share the spoils finding the capital gains tax regime provides a wicket with both bounce and spin for both countries. While Australia offers a simple, fixed (line and length) 50% capital gains discount on assets held for over 12 months, the UK has a £3,000 capital gains allowance combined with varied rates which may come as a win for individuals with low value capital gains.
In the Ashes of Tax, both the UK and Australia have delivered their share of bouncers, boundaries and wickets. Therefore, we recommend consulting a tax advisor to ensure you have considered all the complexities that may arise between both tax systems. Contact your usual Exant advisor, or our Tax Partner, Jamie Towers on 07 3218 3900.
Information sourced from: www.ato.gov.au and www.gov.uk
Authors: Preethi Pasumarty and Jamie Towers who are expecting a 3:1 series win for Australia