Son worked for one year in Toronto under BUNAC. Had a great time, paid his tax as required, came home and applied for emigration. Now the Canada Revenue Agency are chasing him for more unpaid tax. Can anyone tell me if he should have been allowed a personal allowance amount on his tax form. They did not give him one and also claim he might have had overseas earnings. As he was two years out of University, I can't see how they could claim this. Just want to know if everyone who works and pays taxes in Canada is entitled to claim the allowance. Unfortunately, the CRA won't reply to his three letters sent since mid May, so we have no idea. They just keep sending further demands with added penalties.

Yes, he is entitled to the equivalent of a personal allowance on earned income in Canada. To claim it he has to complete tax returns for the years he was earning taxable income in Canada. You can download these from the Canada Revenue Agency web site.

The best thing is to file the tax returns and get the CRA off his back.

Thanks JonBoyE for the advice. Did telephone the CRA and they said send a letter explaining - in the end we had sent six letters and still no reply. Son has now sent a form of reassessment (found on their site). Really hoping this sorts things out. Thanks again - with fingers crossed.

No problem. The persoanl allowance is pro-rated for the period of time he was resident in Canada for tax purposes, and is generally taken into account when employers calculate their pay checks. If you son's earnings were low it is possible he might even be due a refund.

As mentioned, your boy gets a personal allowance (we all do) but it is prorated. I don't think the employer bothered to take this into account and I guess must have deducted based on a full single person's exemption instead of pro-rata. So this may be the problem. If CRA are after him they usually are explicit and will say how much is owed and why. Even if he worked a full year (as you mention) it might be complicated if he worked 12 months but during two separate calendar years.

Better he settle with them as he is intent on emigrating. The last thing he needs is the taxman knocking on his door once here.

Why not contact Canada House in London? They may be able to help or advise.

In Canada one must declare one's world income for tax reporting purposes so this is why they speak of potential overseas earnings. If he has none then it is not an issue.

you might find this link of interest

http://www.taxtips.ca/

Many thanks for all your replies. I think it was simply a question of not having filled out a Canadian Tax form before, he missed off deducting the personal allowance. Just confused that after the first demand and a phone call back to CRA in which they said 'send a letter', they refused to reply - just sent another demand. Sent another five letters stating the problem and asking for them to look at it again (and again) - all of which they did not respond to. Another phone call in which they suggested sending a 'readjustment or reassessment form', which we have done and are now waiting hopefully that they will respond to this. As you say - no one who wants to emigrate to Canada needs to fall foul of the 'Tax Man'. Here's hoping anyway and thanks again for your help.

Shame on CRA as they should have realised that your son didn't claim the personal allowance. We all get it even if it means only claiming a portion therof. In other words pro-rata. There might even be a small refund coming but don't count on it.

Think of the taxman as being the wife you have just divorced. Likely to be in the picture for a while so better to stay on good terms!