Yorkiechef

Hi, so I have been asked to stay on in my job which is a civil service job. I will be working remotely from home in Calgary, I will be paying UK TAX and NI, how do I declare this income for Canadian tax purposes and does anyone know if I can claim/how should I claim any tax overpaid. TY.

Aviator

You report all income on your Canadian tax return. If you provide a certificate of foreign tax paid, you won't get taxed twice. If you would have paid more tax in Canada, you pay the difference to CRA. If you would have paid less tax in Canada, you just made a donation to British taxpayers. You don't get it back.

Yorkiechef

Okay, just report it to CRA, add any additional income that I might make here in Canada, CRA will calculate what I should pay and in theory, any tax I might overpay due to paying tax in Canada also, I could claim back through CRA? I am thinking this as I would have paid tax in both UK AND Canada? Just wondering. TY for responding....

Aviator

On foreign income you pay the difference between UK tax and Canadian. If and how much depends on your world income and marginal rate. You cannot claim any 'over payment' of tax on foreign income from CRA, it is lost money. You could try and get paid gross from the UK source.

Engineer_abroad

Im no expert but I would look carefully at whether this affects your rights in relation to Provincial healthcare i.e. if you arn't paying MSP premiums EI etc. It may be based on residency rather than tax status but worth checking. I also don't think you would be able to claim back taxes such as property tax, gst,pst etc.

Aviator

I believe the OP is referring to income taxes.

Only registered businesses can claim GST as an ITC, PST is either POS exempt, or a non refundable tax depending on circumstances. Property tax on business premises is deductible to a business, not an employee, it is not a refundable tax, it is an expense. CPP and EI payable and uncollected is accounted for when filing a TD1. MSP participation is mandatory depending on where you live not where you earn.

Siouxie

What Aviator said - plus the OP is in Alberta, not BC. Good thought though!

Are you eligible for AHCIP? Registration requirements Alberta Health

As to the OP's question, I second the suggestion that you see if it's possible to negotiate being paid as a contractor/freelance worker (gross), thus enabling you to offset some of the expenses against taxes in Canada and only having one set of tax / cpp payments to make.

The only advantage I can see to being paid as an employee is that your UK pension contributions would be made for you.

PB65

Expect that the approx 10 percent pay cut as a result of Brexit hitting the exchange rate was not part of the original plan. Is one of the downsides of these remote working plans.

Siouxie

It varies every day - the lowest it went (since I've been remote working) was, IIRC, $1.53 - which was a killer - and nothing to do with Brexit. On the other hand, I've had as high as $2.09.

You win some, you lose some - it's the nature of the beast, unfortunately.

However, in the OP's case - he'll first lose NI payments and UK tax, then have to pay CPP payments and possibly tax again. Little to no chance of offsetting any expenses against tax either, as he will be classed as employed and not self-employed (though technically, he would really need other 'clients' to be classed as self-employed if he chose that route).

Personally, I'd rather take the risk on the exchange rate.

Yorkiechef

It is an issue, not only will the exchange rate vary month to month on my salary, we finally sold up last Thursday, following BREXIT, the damage was done, but at least we still sold up. We will hold on to the £ and hope the exchange rate turns around.

Yorkiechef

Being a civil servant, the Govt requires me to pay tax and Ni. There was quite an issue with some civil servants declaring self employed status and avoiding paying taxes, this has now been stamped on. I accept that any overpaid tax on uk income will be lost to HMRC, an option is to have my military pension paid free of tax as I will be no longer a resident in UK.

I can see my tax affairs becoming a bit of a pain, I am grateful for the advice received.

Yorkiechef

I will also continue to accrue a uk civil service pension....though I am making significant contributions to it.

Aviator

If funds are over $100k don't forget to file T1135. Also any currency gain when you do eventually exchange will be subject to reporting and capital gains tax. Depending on your marginal rate, you give the govt around 20 to 25% of the gain.

Yorkiechef

That is a very good point, thank you.