rivingtonpike

Why did they deduct anything in the first place? Are expenses taxed?

rivingtonpike

No, as you were paying tax to the UK revenue, not Canada. The origin of the company is not relevant. Were you paid in dollars and submitting a tax return in Canada? If not, you weren't tax - or in any other form - resident in Canada.

Goodbhoy

I have no idea.
I just know that it happened and the value and deductions appear on my pay stub also.

rivingtonpike

Doesn't sound right to me. I think you will have to take it up with your employer. Seems pretty unfair to me that you've been shafted for $8k of tax. It seems like they've treated it as income and taxed it accordingly, which seems wrong to me when you've used your own money to fund the move when they've said they'll cover your expenses.

rivingtonpike

Long and short of it, you can't claim the tax back from the CRA early - or at all. You can only try to get it back from your employer.

Tough break. Hope you can resolve it.

Goodbhoy

This is not quite true. I know that for sure.
I have been travelling to work in Canada for the previous 6 months.

From the day I obtained my work permit, I must pay Canadian taxes for the days I work in Canada even though I was always paid in the UK in GBP.
I have a calendar app which I need to update every day for my current place of work.
I was informed by PWC who are acting for me in the UK and Canada that I will get a tax bill for owed tax for the days I worked in Canada even though I was paid in the UK.
Equally, I would obtain a refund in the UK for the days I worked in Canada

rivingtonpike

I've just asked my wife about this (she's Director of Finance for an international university here and signs off on relocation expenses all the time). Your relocation expenses should not have been treated as income and so should not have been taxed (unless the agreement was that they would augment your income by $28k to cover the bill). They are a legitimate expense and should/could be covered in full with no tax burden on yourself.

Goodbhoy

Thanks. I will look into this further.

rivingtonpike

Good luck! Doesn't seem right to me. I think your company has made a mistake.

Goodbhoy

I hope your right.
It shouldn't be too difficult to get it back if that is the case.

Aviator

You would have to determine whether you were a factual or deemed resident of Canada. If you had lived in Canada, retained ties to Canada and were a returning resident to Canada to move closer to work or to a new job, maybe.

Aviator

That depends how it has been treated.

This pretty much covers it.
http://www.advisor.ca/images/other/a...mbursement.pdf

Goodbhoy

Interesting but I am still unsure of where I stand.

Aviator

The links in this thread and information provided give enough information to make that determination.

JonboyE

The first general rule is that expenses paid by an employer are not taxable IF the primary beneficiary is the employer. For example, if a construction company sends an employee on a worksite safety training course this is not a taxable benefit to the employee. If they paid for a course to learn about the development of plainsong in medieval monasteries it would be. If you are moving to Canada at your employer's request then reimbursement of reasonable moving expenses should not be a taxable benefit to you.

The second general rule is that employer payment of specific expenses is not a taxable benefit but an expense allowance is. If you have to stay overnight on a business trip and your employer gives you $500 and says, "find a nice hotel and have a good evening," the $500 is a taxable benefit. If your employer gives you a T2200 at the end of the year saying you were required to pay for your hotel you can claim the cost of the hotel as an employment expense on your tax return.

If your employer tells you to hand in the receipt from the hotel and the change from the $500 as soon as you get back to work this is payment of a specific expense and is not a taxable benefit (as long as the cost of the hotel is reasonable in the context of the trip).

The mistake here seems to be that your employer has treated this as an allowance and will be expecting you to claim back your expenses (and a refund of the tax deducted) when you file your tax return. What they haven't taken into account is what has already been said above that, unless you are a student, you can only claim moving expenses on your tax return if you were a Canadian tax-resident both before and after the move.

This can be undone with a bit goodwill on the employer's part. You need to repay the allowance (and they reverse it in their payroll records) and submit an expense claim for them to reimburse.

BE's fee for this advice is 300 guineas which you can deduct from PWC's bill.