Employed and paid by UK Govt - working remotely in Canada
#1
Employed and paid by UK Govt - working remotely in Canada
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.
#2
Joined: Sep 2008
Posts: 12,830
Re: Employed and paid by UK Govt - working remotely in Canada
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.
#3
Re: Employed and paid by UK Govt - working remotely in Canada
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....
#4
Joined: Sep 2008
Posts: 12,830
Re: Employed and paid by UK Govt - working remotely in Canada
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....
#5
Re: Employed and paid by UK Govt - working remotely in Canada
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....
#6
Joined: Sep 2008
Posts: 12,830
Re: Employed and paid by UK Govt - working remotely in Canada
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.
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.
#7
Banned
Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: Employed and paid by UK Govt - working remotely in Canada
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.
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.
Last edited by Siouxie; Jul 8th 2016 at 1:36 am.
#8
Forum Regular
Joined: Jan 2016
Posts: 245
Re: Employed and paid by UK Govt - working remotely in Canada
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.
#9
Banned
Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: Employed and paid by UK Govt - working remotely in Canada
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.
Last edited by Siouxie; Jul 8th 2016 at 6:41 am.
#10
Re: Employed and paid by UK Govt - working remotely in Canada
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.
#11
Re: Employed and paid by UK Govt - working remotely in Canada
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.
I can see my tax affairs becoming a bit of a pain, I am grateful for the advice received.
#12
Re: Employed and paid by UK Govt - working remotely in Canada
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.
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.
#13
Joined: Sep 2008
Posts: 12,830
Re: Employed and paid by UK Govt - working remotely in Canada
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.
#14
Re: Employed and paid by UK Govt - working remotely in Canada
That is a very good point, thank you.