Hi There

I have a complicated working situation. I work for a Canadian company here in Toronto but also do online marking for a UK training company. I was on their payroll last year so my poor Tax Advisor is now sorting out my taxes!

Anyway I have to go self employed from now on for the UK work as I am now working for colleges rather than the training provider. The college needs proof of self employment. I tried to register a business so I could get a business number but was told this wasn't possible as I wasn't selling anything/offering a service.

Does anyone know how I can get proof of self employment here in Canada? I can't register as self employed in the UK as I'm not in the country 26 weeks of the year.

Any advice or pointers in a direction where I could get help would be greatly appreciated.

Thanks

Lucy

So, aren't you selling a service to the colleges? Are you a consultant?

I'm not a consultant, I'm an assessor who is marking online courses. I thought it could be classed as a business as I'm not an employee of the college but CRA said it wouldn't.

Not sure if this info will make the matter clearer!

Thanks for your comment.

Lucy

I don't see how you could be an employee and self-employed at the same time. Why does the college need that proof?

I assume then that you bill the college for your services. I suspect that the CRA is saying that if you only do work for one entity then you cannot be self-employed. You are, in effect, an employee of that institution. If, on the other hand, you were providing the service to multiple institutions you would be a self-employed contractor. Perhaps a lawyer or accountant will be along to clarify for you.

I don't think that de-facto employee suggestion is right. One would be considered an employee under certain circumstances, for example if told by the "employer" when to work, how to work, where to work etc. That would not be the case for the OP. She is already an employee of a Canadian company. The other stuff is just freelance work and would just go down as "other income" on the Cdn tax return. There shouldn't be any tax or VAT implications for the UK side. All the college probably needs is some sort of document that can be tied to payments.

I've never heard of having to provide 'proof of self employment' to a client before. You bill them, they pay you - end of story. The nitty gritty is between you and the tax man. (Which, by the way should only be Canada, as Canada taxes on your worldwide income and you don't live in the UK).
There is likely some form filling to be done both sides of the pond though. For detail on that, your absolute best bet is David Ingram in Vancouver (google him).

You cannot register as self employed. You can be self employed by the nature of the fact that you are not on a payroll and earning income. This can be demonstrated by issuing invoices as a contractor. For educational institutions it is not easy to do, I did a stint here as contract educator, but was still on payroll.

You can register a business name and get a business license from the city (which you would need in most jurisdictions anyway as self employed). Your business name can be your own name if you like. The name registration and business license should suffice. When you file your taxes you report this as self employed income. You also don't have to file until June 15 when you have self employment income, you do however have to pay any tax if you owe any by the April deadline to avoid interest. Getting a business number is a lot of paperwork for nothing, unless your income is over $30,000 then you have to register for GST (not chargeable to overseas clients).

Hi Everyone

Thanks for the info. I have tried to register for a business number with CRA but they say due to the nature of my 'business', they do not think I am eligible to apply.

I'll try to speak to a local Tax office to try to get to the bottom of it all.

It's such a hassle!!

Lucy

Why go to the bother of getting a business number? Just register a name with the province and get a business license. A business number proves no more than these. You likley need a business license whether you have a CRA BN or not. You only really need a business number if you pay and collect GST/HST, for employees payroll, import/export & corporation income tax. There is nothing to get to the bottom of, if you are not doing any of these it is doubtful CRA will give you one.

Some light reading http://www.cra-arc.gc.ca/E/pub/tg/rc2/rc2-09e.pdf

http://www.ontario.ca/en/services_fo...for_businesses

Thanks for the info and links. I will register for a business licence as seems the best way to prove my situation.

I appreciate all of your help with this.
Lucy