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Remote working - Canada to UK - GST / VAT??

Remote working - Canada to UK - GST / VAT??

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Old Mar 3rd 2015, 10:16 am
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Default Remote working - Canada to UK - GST / VAT??

Folks,

Done a ton of research on this, including the excellent threads below:

http://britishexpats.com/forum/canad...panies-847078/

http://britishexpats.com/forum/canad...estion-844124/

I'm an IT contractor, and I am carrying on working remotely to my UK client once I leave in April.... for at least another 4-6 months. I am terminating my current contractual arrangements and setting up a new contract to cover this period but I am wondering about VAT. I intend to register as self-employed in Canada and get GST registered. I understand from the threads above that I need to show GST on the invoice even though it's 0% if I am exporting my services. But... what about UK VAT? My current daily contractual rate in the UK is invoiced with VAT added on top. Does this just not need to happen once I am out of the UK? I am not personally VAT registered in the UK, as I work via a consultancy firm and they take care of that side of things... but in Canada I will be a sole proprietor, the income involved will be above both GST and VAT thresholds amounts.
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Old Mar 3rd 2015, 1:48 pm
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Default Re: Remote working - Canada to UK - GST / VAT??

You don't say your status in Canada, if you are a PR,r Canadian , temp worker or visitor?

Simply coming to Canada as a visitor and working is different to coming permanently. It may also depend in part on the contents of the contract.


One does not need to 'register' as self employed, the status exists by the nature of how you earn. If your income is expected to be over $35k, you need to get a business number with CRA, which goes on all of your invoices.

CRA have a clear definition of self employed.

http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-14e.pdf

As far as your invoice, for an overseas client, you would not charge GST. You cannot show 0%, so need to show nothing as long as the client overseas address is on the invoice. For VAT, if you were a UK resident and registered for VAT you charge it, if you are not either, you cannot charge or remit it. If you have a UK VAT account and it is still open, you should talk to HRMC.

Without a UK presence, being permanently in Canada, having no VAT number, I would say no VAT is chargeable or remittable.

Last edited by Aviator; Mar 3rd 2015 at 1:54 pm.
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Old Mar 3rd 2015, 3:39 pm
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Default Re: Remote working - Canada to UK - GST / VAT??

Thanks!
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Old Mar 5th 2015, 4:17 pm
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Default Re: Remote working - Canada to UK - GST / VAT??

Originally Posted by Aviator View Post
You don't say your status in Canada, if you are a PR,r Canadian , temp worker or visitor?

Simply coming to Canada as a visitor and working is different to coming permanently. It may also depend in part on the contents of the contract.


One does not need to 'register' as self employed, the status exists by the nature of how you earn. If your income is expected to be over $35k, you need to get a business number with CRA, which goes on all of your invoices.

CRA have a clear definition of self employed.

http://www.cra-arc.gc.ca/E/pub/tg/rc4110/rc4110-14e.pdf

As far as your invoice, for an overseas client, you would not charge GST. You cannot show 0%, so need to show nothing as long as the client overseas address is on the invoice. For VAT, if you were a UK resident and registered for VAT you charge it, if you are not either, you cannot charge or remit it. If you have a UK VAT account and it is still open, you should talk to HRMC.

Without a UK presence, being permanently in Canada, having no VAT number, I would say no VAT is chargeable or remittable.
Sorry, I missed the bit at the top about my status. I'm Canadian born and raised, my status is that I have been non-resident for 17 years and am now returning to Canada to resume residency.

I've just been informed that my UK client would actually prefer for me to invoice and be paid via their recently opened Canadian office, which will then deal with recharging to London, but that part is transparent to me. I think this actually simplifies my life, but I'm going to need to get things moving on getting a business number and registering for GST as I will be carrying on immediately upon arrival. (My turnover will be over 35k) Anyone know how long it takes to get these numbers?
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Old Mar 5th 2015, 4:56 pm
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Default Re: Remote working - Canada to UK - GST / VAT??

Originally Posted by ExpatCanadian View Post
Sorry, I missed the bit at the top about my status. I'm Canadian born and raised, my status is that I have been non-resident for 17 years and am now returning to Canada to resume residency.

I've just been informed that my UK client would actually prefer for me to invoice and be paid via their recently opened Canadian office, which will then deal with recharging to London, but that part is transparent to me. I think this actually simplifies my life, but I'm going to need to get things moving on getting a business number and registering for GST as I will be carrying on immediately upon arrival. (My turnover will be over 35k) Anyone know how long it takes to get these numbers?
Few minutes, go to the local authority one stop business registration and provincial and federal registrations can be done.

Other provinces have something similar to BC http://www.bcbusinessregistry.ca/
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Old Mar 6th 2015, 5:52 am
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Default Re: Remote working - Canada to UK - GST / VAT??

Originally Posted by Aviator View Post
Few minutes, go to the local authority one stop business registration and provincial and federal registrations can be done.

Other provinces have something similar to BC OneStop BC Business Registry
This is brilliant! Thanks!
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Old Mar 10th 2015, 10:57 am
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Default Re: Remote working - Canada to UK - GST / VAT??

A follow up:

For those of you who work remotely in Canada for a UK client, are you invoicing in GBP or CAD?

If GBP, when it comes time to report this on your Canadian tax return do you then simply convert using the annual blended conversion rate?
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Old Mar 10th 2015, 3:01 pm
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Default Re: Remote working - Canada to UK - GST / VAT??

Originally Posted by ExpatCanadian View Post
A follow up:

For those of you who work remotely in Canada for a UK client, are you invoicing in GBP or CAD?
We invoice our UK client in CAD, and that arrangement seems to work simply enough for us and them.
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Old Mar 10th 2015, 6:34 pm
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Default Re: Remote working - Canada to UK - GST / VAT??

Originally Posted by ExpatCanadian View Post
A follow up:

For those of you who work remotely in Canada for a UK client, are you invoicing in GBP or CAD?

If GBP, when it comes time to report this on your Canadian tax return do you then simply convert using the annual blended conversion rate?
I invoice in £ Sterling and use the rate given by my Forex provider at the time of transfer. Plays havoc with my accountancy software though!

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Old Mar 10th 2015, 10:49 pm
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Default Re: Remote working - Canada to UK - GST / VAT??

Originally Posted by Aviator View Post
As far as your invoice, for an overseas client, you would not charge GST. You cannot show 0%, so need to show nothing as long as the client overseas address is on the invoice. For VAT, if you were a UK resident and registered for VAT you charge it, if you are not either, you cannot charge or remit it. If you have a UK VAT account and it is still open, you should talk to HRMC.

Without a UK presence, being permanently in Canada, having no VAT number, I would say no VAT is chargeable or remittable.
You can (and should) show zero on the invoice, you have to give your GST number as well. It is zero-rated, but it does exist. Zero-rated and zero are not the same thing, ITCs can be claimed against a zero-rated output which is important in situations like this.

There is no VAT though for the reasons you point out. Under the tax treaty you don't have a permanent establishment in the UK, ergo no VAT.
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Old Mar 10th 2015, 10:51 pm
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Default Re: Remote working - Canada to UK - GST / VAT??

Originally Posted by ExpatCanadian View Post
A follow up:

For those of you who work remotely in Canada for a UK client, are you invoicing in GBP or CAD?
This is usually down to the client imx, I don't have any clients abroad anymore but it's usually a matter of negotiation. Generally it's better to get paid in the currency where you live. If you can find anyone in the US who will pay in CAD though, good luck to you.
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