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Moving to Canada but freelancing for UK company

Moving to Canada but freelancing for UK company

Old Jan 2nd 2024, 11:25 am
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Default Moving to Canada but freelancing for UK company

Hi!

I will be moving to Canada on an IEC visa at the end of January. I will be staying with my current employer, but operating as a freelancer and working part time whilst in Canada. I have plans to invoice my current employer with my monthly hours, to be paid in GPB into my UK account (and then transfer over to my Canadian one after I've been paid).

I have plans to stay in Canada for the 2 years on the visa, but I am confused as to where to pay my tax. From what I understand, I will only qualify as a Canadian Tax resident after being in the country for more than 183 days, if this is true - do I need to pay tax in the UK until the 183 day mark? And then afterwards, pay Canadian tax?

If someone could explain that would be great! Getting overwhelmed with all the information!
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Old Jan 4th 2024, 1:38 pm
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Default Re: Moving to Canada but freelancing for UK company

You pay tax where you are tax resident. Since you will be living and working in Canada for 2 years, this would make you a tax resident in Canada.

When I left the UK 7 years ago, I filled out a P85 "Leaving the UK" form and sent that to HMRC. If and when you return to the UK and start working, HMRC will be informed that you are tax resident again.

The 183 days is just a tax residency trigger, but if you already know that you're going to exceed that mark, then you are effectively tax resident from day one in Canada.
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Old Jan 4th 2024, 1:45 pm
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Default Re: Moving to Canada but freelancing for UK company

Yep, what has been said above. And for info on setting up as a self employed person in Canada, have a hunt around the forum as there are loads of threads on what you'll need to do.

Good luck.
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Old Jan 6th 2024, 2:00 am
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Default Re: Moving to Canada but freelancing for UK company

Originally Posted by Jellodog
You pay tax where you are tax resident. Since you will be living and working in Canada for 2 years, this would make you a tax resident in Canada.
...
The 183 days is just a tax residency trigger, but if you already know that you're going to exceed that mark, then you are effectively tax resident from day one in Canada.
I don't necessarily agree with this.

The 183 day rule is a deeming rule, it does not change whether or not you are factually resident, or non-resident, in Canada for tax purposes.

The question should be, "is a person on an IEC visa resident in Canada for tax purposes?" The answer, of course, is it depends. If you will leave Canada at the end of your visa, never to return, then you are likely non-resident for the time you are here. If there is evidence to the contrary, e.g. you sign a lease agreement that would take you beyond the two years, or if you take steps to apply for permanent residence, or if you start a long-term committed relationship with a Canadian, and so on, you are likely resident for tax purposes. There are precious few hard and fast rules.

Note that even if you are non-resident, you still have to file a tax-return for all the years, or part years, you are in Canada if you owe tax - or want overpaid tax refunded.
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Old Jan 27th 2024, 2:41 am
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Default Re: Moving to Canada but freelancing for UK company

I am in a very similar situation, and like you, I am feeling pretty overwhelmed with all the info!

I had a free consultation with a CRA tax advisor, he was very pleasant but wasn't really able to answer any of my questions and I ended up feeling much more confused than before I had the call
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Old Feb 2nd 2024, 7:51 pm
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Default Re: Moving to Canada but freelancing for UK company

Originally Posted by traveller555
I am in a very similar situation, and like you, I am feeling pretty overwhelmed with all the info!

I had a free consultation with a CRA tax advisor, he was very pleasant but wasn't really able to answer any of my questions and I ended up feeling much more confused than before I had the call
Hi. May I ask how you got the free CRA consultation?
Thanks.
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