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Backpackers could be forced to pay tax when working in Australia under a new policy put forward by the Australian government.

The “backpacker tax” could see holiday workers paying 15 per cent tax on the money they earn in the country.

The announcement comes after over a year of negotiations between government and minority parties with a compromise finally being reached at 15 per cent.

The new figure is lower than the government’s original plan to tax holiday workers at 32.5 per cent.

But the government backed down when the 32.5 per cent rate sparked outrage among tourism operators and farmers who feared the tax would put backpackers off visiting Australia.

Around 600,000 travellers visit Australia each year, many of whom fund their travels by picking fruit or working on farms.

Almost 45,000 British holidaymakers were granted working holiday visas in the year 2014-2015.

As it stands backpackers, like Australian citizens, only start paying tax when their yearly income exceeds A$18,200 (£11,000).

New Zealand currently taxes holiday workers at 10.5 per cent.