Siouxie

If we told you, we would have to kill you.

foreigngirl

There are so many things you can do remotely these days. All you need is a computer and Wi-Fi.
Work From Home: The Top 100 Companies Offering Flexible Jobs In 2014 - Forbes

dishwashing

Thanks, foreigngirl, geez, what was with these people?

orly

Hopefully they don't involve webcams.

Aviator

It is not necessary to 'register' as self employed, by the nature of earning without being an employee one is self employed. They just file a tax return with self employment income and expenses. If the income amount is above the GST threshold then they would register for a business number.

Incorporating just for having multiple clients, would be an unnecessary expense, a waste of time and an unnecessary complication. A liability exposure or tax benefit, that would be different. Even when borrowing, limited liability is often pointless as lenders want personal guarantees

dishwashing

abrxx

Hi folks,

I'm a bit confused about why people are talking about paying self employed taxes in Canada. Are you not all paying the relevant taxes in the UK? I have a UK limited company which invoices for the work that I do (remotely, in Canada) to a UK client. I happen to be be based in Canada now. I pay all the UK taxes: Corporation Tax, VAT, Income tax, NI, etc.

Any advise as to how to handle my taxes in Canada?

Aviator

If you have a UK registered corporation, it is liable for tax in the UK. If you are a tax resident in Canada, you are liable for tax on your world income to the Canadian tax authorities. If you have not reported your income in Canada, you may want to look at doing so very quickly. You can get credit for UK tax paid, so long as you have evidence that this has been paid.

If you own foreign assets valued at $100k CAD or more, you should also file a T1135.

Individuals and corporations are separate entities and treated as such. Self employed is an individual. If you work for a corporation, even if you won it, you are an employee.

If you do not understand how this works, you would be well advised to consult an accountant.

foreigngirl

Well, I live in Canada, so am tax resident in Canada and have to pay taxes here. Even on foreign income. Simples.

abrxx

Ok. So I will have some notional tax due on my personal UK income, but this should be offset by the tax I actually paid in the UK? Is that about it?

What sort of tax return do I prepare in Canada then, a self-employed one in which I declare zero Canadian income and my UK income?

Thanks,
Alastair

Steve_

We had this discussion before and you were wrong that time too - you have to tell the CRA you are self-employed in order to get a business number, and you have to get a business number in order to get a GST account. Moreover you don't just randomly send in a T2125 with your T1, you have to pay in installments if you are self-employed. So in other words, you have to register as self-employed.

Steve_

It's a lot easier since they did all the forms as PDF-fillable I've found.

Steve_

As I said in my earlier post, register as self-employed, i.e. get a business number, get a GST/HST account invoice the UK client from Canada. GST/HST is zero-rated. Or set up a CCPC. On the CRA website there are loads of guides you should read.

There are no UK taxes, your tax home is in Canada (I assume as you're living here), this is where you live. You are effectively exporting your services, so no VAT even. Your UK company effectively became pointless as soon as you took up residence here, you have to set up the same arrangement in Canada. You invoice your UK client, they pay. Simpler to do it in Canadian dollars if you can.

Eventually the CRA will catch up with you if you don't and you will owe back taxes for all the time you've lived here. Moreover you need to file a P85 with HMRC to tell them you've left. What will happen is when you come to file your T1 and you don't declare much income the CRA may call you to find out what is going on and if you tell them you are paid from the UK they'll send you an NR74 to fill in to determine if you are resident. As you are, you'll then get a bill from them. They can get your UK tax records from HMRC under the treaty.

It is possible to claim to be non-resident while in Canada, but this is only good for 183 days typically, then you have to start filing as a resident of Canada.

Aviator

You only need a business number for GST on income over $35000, Import account or payroll. Other than that one does not need to register. Installments are not a requirement of the first year in business for individuals or corporations. Installments may then be required quarterly, depending on income. Lower income individuals can file annually and pay tax annually and if a GST registrant can file that annually as well if that is what they elect for.

http://www.cra-arc.gc.ca/tx/bsnss/sm/sttng/sl-eng.html
Note the 'may' have to register and 'may' have to pay by installments, not 'will have to'.

Shirtback

This is not entirely correct. I see other posters have already pointed this out.

For example, not every self-employed person requires a GST account. Not every self-employed person has to pay in installments. There are too many variables, some depending on where one lives in Canada (which province) to make blanket statements like you did.

If one is concerned, a consultation with a (recommended by someone who knows) tax-savvy accountant is money worth spent, & it's deductible

S