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Old Dec 27th 2017, 3:27 pm   #1
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Default Taxes - working for British Firm in Canada

Hello

Does anyone have a good link(s), for living in BC but being employed/paid by a British employer - from a tax perspective? My employer will not pay taxes in Canada on my behalf (to clarify) as they are HMRC registered.

Thanks,
Madeline

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Old Dec 27th 2017, 5:35 pm   #2
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Default Re: Taxes - working for British Firm in Canada

Very straightforward. You report your world income to CRA on your TD1 after the end of the calendar year. Any overseas tax paid (where a reciprocal tax agreement exists), claim a foreign tax credit (and provide proof of payment). Any difference you owe, you pay CRA.

If self employed, pay tax at end of year, unless CRA ask for installments.

Deadline is April 30 for employed and June 15 for self employed. Any unpaid tax accrues interest from May 1.

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Old Dec 27th 2017, 6:06 pm   #3
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Default Re: Taxes - working for British Firm in Canada

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Originally Posted by HerMadge View Post
Hello

Does anyone have a good link(s), for living in BC but being employed/paid by a British employer - from a tax perspective? My employer will not pay taxes in Canada on my behalf (to clarify) as they are HMRC registered.

Thanks,
Madeline
I work remotely for a UK company, as a freelancer. I invoice the UK company (GST is 0 rated for overseas work); they pay me gross by direct wire transfer to my Canadian bank account. I pay taxes in Canada as self employed, plus the CPP required payment. The advantage to being freelance / self employed is you can claim many things as tax deductible; the disadvantage is you have to remember to put away a percentage for tax and CPP and not spend it.

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Old Dec 28th 2017, 9:26 am   #4
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Default Re: Taxes - working for British Firm in Canada

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Originally Posted by Siouxie View Post
I work remotely for a UK company, as a freelancer. I invoice the UK company (GST is 0 rated for overseas work); they pay me gross by direct wire transfer to my Canadian bank account. I pay taxes in Canada as self employed, plus the CPP required payment. The advantage to being freelance / self employed is you can claim many things as tax deductible; the disadvantage is you have to remember to put away a percentage for tax and CPP and not spend it.

This is excellent, I may need to pick your brain in freelance work as that is something I intend to do also.

Thanks both, this helps with my query. Cheers!
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Old Dec 31st 2017, 4:43 am   #5
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Default Re: Taxes - working for British Firm in Canada

You start your own business and invoice them, essentially. More info at: Starting a business : British Expat Wiki
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Old Jan 1st 2018, 5:56 pm   #6
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Default Re: Taxes - working for British Firm in Canada

I've been doing this for 15 years both as a freelancer and as an employee. To what has already been said, I will add the following.

The OP will probably be asked to pay in installments (I pay four per year).

The CRA has a habit of auditing people claiming foreign tax credits. I've been done several times.

Get an accountant. Some do tax returns on their own time. Mine charges a mere $80 to do mine and my wife's.

Make sure the accountant remembers to put the CPP on the return.
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