Remote working - Canada to UK - GST / VAT??
Mar 3rd 2015, 10:16 am
#1
Forum Regular
Thread Starter
Joined: Dec 2014
Posts: 55
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.
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.
Mar 3rd 2015, 1:48 pm
#2
Joined: Sep 2008
Posts: 12,830
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.
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.
Mar 3rd 2015, 3:39 pm
#3
Forum Regular
Thread Starter
Joined: Dec 2014
Posts: 55
Re: Remote working - Canada to UK - GST / VAT??
Thanks!
Mar 5th 2015, 4:17 pm
#4
Forum Regular
Thread Starter
Joined: Dec 2014
Posts: 55
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.
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.
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?
Mar 5th 2015, 4:56 pm
#5
Joined: Sep 2008
Posts: 12,830
Re: Remote working - Canada to UK - GST / VAT??
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?
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?
Other provinces have something similar to BC http://www.bcbusinessregistry.ca/
Mar 6th 2015, 5:52 am
#6
Forum Regular
Thread Starter
Joined: Dec 2014
Posts: 55
Re: Remote working - Canada to UK - GST / VAT??
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
Other provinces have something similar to BC OneStop BC Business Registry
Mar 10th 2015, 10:57 am
#7
Forum Regular
Thread Starter
Joined: Dec 2014
Posts: 55
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?
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?
Mar 10th 2015, 6:34 pm
#9
Banned
Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: Remote working - Canada to UK - GST / VAT??
Mar 10th 2015, 10:49 pm
#10
Grumpy Know-it-all
Joined: Jul 2010
Location: Calgary, Alberta
Posts: 8,928
Re: Remote working - Canada to UK - GST / VAT??
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.
Without a UK presence, being permanently in Canada, having no VAT number, I would say no VAT is chargeable or remittable.
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.
Mar 10th 2015, 10:51 pm
#11
Grumpy Know-it-all
Joined: Jul 2010
Location: Calgary, Alberta
Posts: 8,928
Re: Remote working - Canada to UK - GST / VAT??
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.
