IT contracting in Canada > Umbrella company required
#16
Re: IT contracting in Canada > Umbrella company required
That's not the same thing. What you want is to incorporate without naming the company; you just get the next available number and use that as the name of the firm. The link is for getting some sort of tax number.
Why not get an accountant to sort this out? If you cock up the original set up you'll have years to regret getting it wrong and will spend the cost of an expert many times over on excess tax and source deduction bills.
I suggest that doing this yourself is as sensible as pulling your own teeth.
Why not get an accountant to sort this out? If you cock up the original set up you'll have years to regret getting it wrong and will spend the cost of an expert many times over on excess tax and source deduction bills.
I suggest that doing this yourself is as sensible as pulling your own teeth.
CPA And Accountants Tax Services. Incorporating In Ontario
1.800.465.7532
If memory serves they can set you up for a few hundred dollars.
We have several hundred recruiters on our books and refer new migrants to these people all the time.
I had to get to the office first to get their details or I would've responded sooner.
Also I knew DBD33 was the guy for this sort of stuff.
#17
Banned
Thread Starter
Joined: Sep 2014
Posts: 233
Re: IT contracting in Canada > Umbrella company required
Great, thanks guys
#18
Banned
Joined: Jul 2014
Posts: 36
Re: IT contracting in Canada > Umbrella company required
Sounds like you've progressed beyond this, but having gone through your experience I'd say the first call would be to the agency that placed you. If you need a quick fix to get your feet under the desk, then they may take you on as a temporary employee, they effectively become your umbrella company. Randstad helped me out like this when I landed in BC a few years ago.
The agency should also be able to tell you what the clients' requirements are, they may well be satisfied dealing with a "sole proprietorship", which is quicker and cheaper to set up.
This won't have been the first time the agency have dealt with similar situations, ask if they've got any local contacts who can help you set up, they may well have something like a "Welcome to Canada" info pack, Ajilon had this back in the 90s.
The agency should also be able to tell you what the clients' requirements are, they may well be satisfied dealing with a "sole proprietorship", which is quicker and cheaper to set up.
This won't have been the first time the agency have dealt with similar situations, ask if they've got any local contacts who can help you set up, they may well have something like a "Welcome to Canada" info pack, Ajilon had this back in the 90s.
#19
Re: IT contracting in Canada > Umbrella company required
The client has a bit more of a case that they're in a commercial relationship with the agent and don't care how the agent gets the work done (although this is nonsense, of course, contracts now are usually just a means to have long term staff and to avoid providing benefits to them).
The problem with the corporation isn't in the short term, it's good for taxes, and good for avoiding liability for one's errors. The problem is when and how to wind it up and the cost of winding it up.
#20
Re: IT contracting in Canada > Umbrella company required
Hi Folks,
I have a new IT contract to start in Toronto. However the only thing I have is a SSN/Canadian bank account/PermVisa and my UK P45,
What do I now need to do? In UK I usually have an umbrella company (In UK you can simply register in a day )
So in Toronto what is the first thing I need to do?
Is there anyway it can all also be done online?
thanks guys any advice would help I need to get this done asap.
I have a new IT contract to start in Toronto. However the only thing I have is a SSN/Canadian bank account/PermVisa and my UK P45,
What do I now need to do? In UK I usually have an umbrella company (In UK you can simply register in a day )
So in Toronto what is the first thing I need to do?
Is there anyway it can all also be done online?
thanks guys any advice would help I need to get this done asap.
If you really, really, really want to you can set up a CCPC, get it a business number, GST account, payroll account do payroll, file a T2 every year but that sounds like overkill for a single contract.
We had this thread the other day - are you in fact an employee of said company because it sounds as though you are if it is your only contract.
In which case, they put you on the payroll (assuming the work is being done in Canada).
#22
Re: IT contracting in Canada > Umbrella company required
But why would you want to do that if you only have one contract?
Can't see a point.
Saves you from doing all the tax paperwork and in addition the employer has to pay half the CPP.
And in any event as we were discussing in the other thread, it's not really a choice you have, legally you have to go on the payroll if it is essentially an employer/employee relationship.
Unless of course you enjoy filling in T2125 or T2. I know I don't.
Can't see a point.
Saves you from doing all the tax paperwork and in addition the employer has to pay half the CPP.
And in any event as we were discussing in the other thread, it's not really a choice you have, legally you have to go on the payroll if it is essentially an employer/employee relationship.
Unless of course you enjoy filling in T2125 or T2. I know I don't.
#23
Re: IT contracting in Canada > Umbrella company required
Companies used to engage contractors because they needed some highly specialised skill for a short while and were prepared to pay highly for that skill. The contractors necessarily moved from company to company working at each for a limited term, often several at one time. The tax authorities recognised that form of work and allowed concessions to the contract workers. Inventive contractors pay minimal, if any, taxes beyond CPP and EHT.
Over time the cost of benefits has become more important to employers and they've sought to casualise the labour force, eliminating such frills as medical benefits, pensions, paid sick time, paid vacation and stature that might lead to having to pay severance. WalMart, for example, achieves much of this by not giving workers enough hours to qualify as full time in the eyes of the law.
In the case of computer workers, contracting has evolved to allow "employers" to meet these objectives, companies put contractors on revolving three or six month contracts for years or decades; they never become employees. Workers accept those terms and conditions because they're able to fiddle their taxes. The tax avoidance on which the arrangement depends requires that there be a level of deniability to the situation. This is achieved by the contractor incorporating, the "employer" is then insulated from the idea of the contractor being a person.
I think this circumstance evolved by accident, contractors are generally greedy and short sighted and individual managers in large companies love to use contractors as it generally avoids having to deal with HR and, in the case of government agencies and quangoes, often comes with a kickback from the pimps. Nonetheless, it more or less meets the needs of both the "employer" and the contractor.
However, the real winners from this evolution in the business are the pimps. 40% of the billing rate is reasonable enough if you have to keep finding a new contract for each person every six months. After ten years or so of doing nothing it's rather a windfall.
#24
Re: IT contracting in Canada > Umbrella company required
Look in the UK, which is where he's from HMRC have the IR35 rules which compel you to do the payroll as for an employee if it's a single contract.
As pointed out already, CRA have a similar rule although they don't enforce it quite as strictly.
You can go on a payroll for three or six months no problem.
How, exactly? You've got to pay double CPP so any screwing around with your expenses doesn't really help seeing as you've also got to pay for your own prescription drug plan, dental plan, etc.
But anyway, yes on a practical level I do have my own company but if it was a single contract for any length of time I would be pushing to go on the payroll.
As pointed out already, CRA have a similar rule although they don't enforce it quite as strictly.
You can go on a payroll for three or six months no problem.
Workers accept those terms and conditions because they're able to fiddle their taxes.
But anyway, yes on a practical level I do have my own company but if it was a single contract for any length of time I would be pushing to go on the payroll.
#25
Re: IT contracting in Canada > Umbrella company required
I don't think contractors generally have dental or drug plans. If you want lots of drugs then you probably also want lots of time off so, yes, it's better to be an employee.
#26
Re: IT contracting in Canada > Umbrella company required
If you're going to be running your own incorporated company for any length of time, get yourself a good accountant - don't try to wing it in a foreign country. BE advice is helpful but can end up confusing you with multiple contradictory feedback. The setup is simple but you need to understand the administrative overhead - this is not the UK where an umbrella company will do all your monthly paperwork for you for a fee, unfortunately.
#27
Joined: Sep 2008
Posts: 12,830
Re: IT contracting in Canada > Umbrella company required
If you're going to be running your own incorporated company for any length of time, get yourself a good accountant - don't try to wing it in a foreign country. BE advice is helpful but can end up confusing you with multiple contradictory feedback. The setup is simple but you need to understand the administrative overhead - this is not the UK where an umbrella company will do all your monthly paperwork for you for a fee, unfortunately.
#28
Banned
Thread Starter
Joined: Sep 2014
Posts: 233
Re: IT contracting in Canada > Umbrella company required
Yup. Appreciate the tips guys. Can be confusing compared to UK.
Here you get a contract.
Sign up (probably a online form) to an umbrella
give them your P45.
And thats it.
Alot of bullshit and messing here about for such a simple setup.
Here you get a contract.
Sign up (probably a online form) to an umbrella
give them your P45.
And thats it.
Alot of bullshit and messing here about for such a simple setup.
#29
Joined: Sep 2008
Posts: 12,830
Re: IT contracting in Canada > Umbrella company required
I ended up in court with a guy claiming limited liability. Because he got it wrong, not only did he lose the case, the judgement was against him personally, not his company. Made collecting a lot easier as I could sieze all his assets, personal and corporate.