Republic of Kateland

Hello everyone! I'm a brand new member and overjoyed to find such a useful community. Please forgive me if this is something you've been asked a million times before.

I'm a British Citizen, living in Canada and just gained Canadian permanent residency this summer, with full work authorisation.

I have been offered the chance to work full-time as an independent contractor (not an employee), allowing me to work from home via the Internet and giving me a nice degree of flexibility. The company I would be working for is a small private company in the UK and I would be supplying services exclusively for them as a contractor for work based in the UK. I would invoice them for services once a month and they'd wire payment directly to my bank here in Canada. This seems fairly straightforward.

My question is, I do still have an active bank account back in the UK, as well as my chequeing account here in Canada and it would be so simple and less costly on both sides, to have them pay me into my UK account, but if I did that, how would that affect taxes? Would I have to pay taxes in the UK as well/instead? Or just here in Canada, the same as I would if it was being paid into my Canadian account?

The UK account route seems unnecessarily complicated so I'd love to hear from anyone who's had the same dilemma. As my income is in effect "savings" (we live off my husband's income and want to save mine) it wouldn't matter it was in the UK as I would rarely be accessing it, but I don't know how this would affect me from a tax point of view. I will probably have them wire here to my Canadian bank but wondered the implications if I did it the other way.

I was wondering if anyone else is in a similar situation - living in Canada yet working remotely for a British company. I've done a lot of research but there's so much information that isn't specific to my situation that I feel I know less than when I started and it's a bit overwhelming. If anyone has any advice or interesting points I should consider, I'd love to hear them.

And thank you so much, in advance.

Aviator

Paid direct into a UK account, this gives you flexibility in when it comes over and choosing an FX that suits you.

As a contractor, they would not source deduct tax, you would report income on your CAD tax return from all worldwide sources. Use an annualized FX rate. You are only taxed in Canada if a tax resident of Canada.

If the FX goes up (in your favour) you also have to report any currency gain as a capital gain. For the small cost, get a local accountant (not tax preparer) to prepare and file your taxes, much more cost efficient and helps ensure it is done to your benefit.

The only benefit of leaving it in the UK is having control over the FX rate when you bring it over. Tax wise it makes no difference.

Republic of Kateland

Thank you so much for this, it actually helped a lot. I will look into a local accountant when the time comes for sure. I appreciate you taking the time to help!

Novocastrian

A poster called Souvy has been doing this for many years. I've no idea where his accounts are, but perhaps he'll be along in the morning.

In the morning, because, working for a UK company means he has to keep rather unusual office hours (because of the time difference). And he's in Gatineau, not Winnipeg.

Siouxie

I also do this, I work the UK unsocial hours (6pm - 8am UK time), invoice them as a freelance self employed contractor and am paid directly into my Canada bank account.

If I can be of any help, let me know.

foreigngirl

I do this and my set up is just like Siouxie's, but I work Canadian hours.
The company that I work for in the UK pays the wire transfer fees.

Republic of Kateland

Awesome, thanks so much guys! I feel much better knowing I'm not the only person doing this ridiculous thing. I'm just going to have them wire it here to my Canadian bank I think. Thank you to all of you, I appreciate the help. I will also be working somewhat unsocial hours though not as bad as some - 6am till 3pm approx. Strong coffee! That's the key. Have a good one!

TC8474

I'm just about to do this too! It actually feels really good to know that other people are doing it and it's working for them.

I'm just starting with the company who are going to let me do this in the UK and after six months I'm free to move to Canada (I'm a citizen so no visa issues).

Are any of you in client facing roles? Have you found any adverse reaction from clients to your being based in Canada (ie only available for calls video conferences and not meetings)?

Siouxie

Your Canada bank will likely charge you the incoming wire transfer fee, which you can claim as an expense when preparing your annual accounts for taxes.

Coffee is essential, lol.

grassman

What type of roles in the UK allow for such an arrangement?

Siouxie

I work 1pm-3am Canada time

Do they pay your incoming wire transfer fee from your Canada bank? If they do you are very lucky!

TC8474

Quick question for those of you already in Canada working for UK companies, have you managed to find a cheap way of making calls back to the UK? If so, how much are you being charged?

Jerseygirl

Calling cards...you can buy them in most supermarkets, Shoppers etc. We have a $10 card from Shoppers...we can chat to people in the US for several hours with the card.

Jerseygirl

If you have TD accounts they transfer money between accounts without fees. I think TD have a branch in London...could be worth the OP looking into it.

Republic of Kateland

Hi all, I have a TD account here in Canada, should look into the UK TD thing. I didn't even realise you could claim the wire transfer thing in taxes - my bank charges $17.50 to receive a wire transfer from abroad (lovely!) and no, my company doesn't pay that as I am technically freelance and not an actual employee, so no frills. I just saw the fee as a necessary evil.

As for work, if you work via the internet for a company they can be anywhere in the world really. This one just happens to be in the UK and only hires UK citizens due to the nature of the work, but we can be, physically, anywhere. So I'm paid in pounds, but file my taxes here in Canada. The Internet made so many wonderful things possible, but it sure did complicate matters too.

Thanks again for all of your help everyone.