Aviator

It could be deemed work if you will be engaging in a business activity that is competitive in the marketplace, something a Canadian business could reasonably expect to be doing. If you can justify why you living in Canada doing the job would not indicate a Canadian business could also do the job, should not be an issue.

If you issue an invoice and all the contact details and banking are in the UK, likely to be OK for a few weeks. I certainly would not be looking to register for any accounts with CRA or even contact them before having residency, this would be indicative of 'working'.

Once you have residency, self employed in Canada requires no registration, however if you meet certain criteria, such as revenue over $35k, a business number, employee people, a payroll number, export/import, number for this. It is the same number, just a different suffix. A municipality my require you to have a business license, the homeowners insurer should be notified and if using a vehicle for work, the car insurance may be required for business use.

TRC

It would essentially be freelancing for a web development company based in the UK.

MarylandNed

Yes

MarylandNed

See post #14.

Temporary Foreign Worker Program: What is work?

What kind of activities are not considered to be "work"?

- long distance (by telephone or internet) work done by a temporary resident whose employer is outside Canada and who is remunerated from outside Canada;

Steve_

It's not really practical to do it.

Canadian law requires you put your business number on your invoices and you wouldn't have one. If you're self-employed, you have to have a SIN to apply for a business number and you haven't got one as a visitor.

Someone is now going to say you don't have to register for GST/HST if your income is below $30,000, which is a dumb thing to do because you can't claim ITCs if you don't register.

A foreign corporation for example can get one but why bother.

There's no particular problem with you staying on the UK company payroll for a couple of months.

Aviator

[QUOTE=Steve_;11723379]Canadian law requires you put your business number on your invoices and you wouldn't have one. [QUOTE]

Not quite true. A business is required to provide their GST/HST registration number to a customer when they are charging sales tax to that customer. If the supplier is not registered to charge sales tax there is no number to provide and no requirement to do so.

This rather depends on individual circumstance, what input tax credits one has, whether it is worthwhile to reclaim the ITC. If the ITCs are under a couple of hundred dollars, it is more cost effective to not bother with all the paperwork. Not to mention CRA can audit any registrant at any time. Where ones billing is mostly service related, with maybe expenses such as phone lines, utilities and stationary, the hassle of dealing with GST is not worth it. There are lots of instances where it is not worthwhile and as many where it is. All depends on the individual circumstance.

This I would agree with for the OP.

TRC

Thanks for the help guys, do you have any links to back this up as I need to show my boss.

Siouxie

To back what up? The not needing a work permit to work remotely (you've been given it) or the tax / self employed parts?

TRC

Actually it's alright, I've explained all. Thanks for all the help

Steve_

Well you're entitled to your opinion, imo there's almost never a case not to do it. The paperwork is very simple, you can register for a BN very quickly and if you've got low revenue the return is annual. Just add up your ITCs put them on the form, add up how much GST you collected, one minus the other.

I could understand if you were say, baking a few cakes and the ingredients had no GST and you don't want to collect it, but generally speaking you're better off doing it. Don't agree on a service job, you're going to be buying stationary, printer cartridges, using the phone, buying equipment to use, the ITCs add up pretty quickly. In fact at the start is where it is the most important because that's when you buy the most stuff in one go.

Ah, but what if your customer wants to claim it as an ITC? This is why it works with Mrs Muggins' cakes but not if your client is a business and you're doing it to avoid being on the payroll.

Aviator

If a business is not registered for GST, therefore not charging it, the purchaser cannot claim an ITC, as there are none. They can expense it, but a BN is not required by either party to do this.

No idea what the last sentence of this quote is getting at! I guess Mrs Muggins must have some idea.

Steve_

The idea behind the GST registration exemption is for tiny businesses that sell to people who aren't businesses, generally speaking. The example that is typically used is someone who sells a few cakes. Because cakes are subject to GST.

smauger

I've been trying to get a straight answer for my situation from other posts but struggling to find it. I found this answer really helpful and was wandering if you know if the same rules apply if I'm on an IEC year visa (working holiday). I want to keep working for my UK employer. Am I right in thinking that on arrival to Canada I need to register as self employed - is this easy to do? Then I'll just need to invoice my UK employer, then do a tax return (T2125) at the end of each year? Sorry I don't understand some of the abreviations. If anyone could clear this up I would be forever grateful.

Aviator

You don't register as self employed, there is no process to do as such. A corporation gets registered.

If you are going to earn over $30k a year you need to apply to CRA for a GST business number. You may require a business license (municipal).
GST is not charged to overseas clients, but you can claim input tax credits on business expenses.

A T2125 is filed along with your personal tax return at the end of a calendar year. You file both.

Steve_

Well typically you have to have a Business Number for GST/HST so in essence you do have to register.

Although whether it's worth bothering if you're earning a tiny amount on an IEC is open to question.

A T2125 is a schedule to the T1 tax return. So when you do your tax return you have to fill in T2125 as well.

Although legally you don't have to get a GST/HST number unless you're over the limit, there's no real downside to doing it I can think of and it does mean you can claim ITCs, i.e. input tax credits. I.e. you can claim back any HST/GST you pay on supplies for the business. GST/HST works in a virtually identical way to VAT in the UK. The only major difference is the rate.

Take the time to read the actual CRA instructions, because it seems to me that 99.9% of people think that TurboTax or whatever can do this all for them. Which it can't.