victorfoxtrot

Sorry in advance for the long post and apologies if this is better posted in the MBTTUK page, but initially I wanted to post here in case any Canadian based HR or tax people might be able to shed some light.

I've seen many questions from British citizens coming to Canada and continuing to work for their UK employer remotely and the various tax implications. I wonder if anyone has any experience of the reverse? We are moving to the UK and my Canadian partner (also Portuguese/EU citizen) has had an interesting offer job wise which we have some questions about.

After handing in his notice to his company here in Ontario, they have surprised us by offering him a role working remotely whilst living in the UK. They have no office or presence in the UK at all, so he would be working from home. The further we look into it though it does not seem to be a great offer. Firstly they require him to be paid in CAN$ into a Canadian bank account and they are saying he must have a valid Ontario address, bank account, SIN and he must also fly back every 6 months to maintain Canadian residency. This presents many problems, not least the fact that practically and financially we can't afford to keep flying him back (at his own cost) and we would then be taking a hit on converting the cash into GBP. Also they state he needs to have a valid OHIP card, but I don't understand this, because he's not going to be eligible for OHIP care in any case, so he won't need the private health insurance that they currently provide us as an employee benefit.

Tax wise they are saying he will have to pay Canadian taxes because he will be paid in CAD$ and into a CAN bank account. To my mind though none of this will work, because he is not going to be a Canadian resident for tax purposes. He is moving to the UK as an EU citizen and will be resident in the UK, so he will pay UK tax and NI.

As far as I can see this is just not workable. It was appealing to begin with because as neither of us have work lined up this could have been a great short term solution. We were willing to take the currency conversion hit if we were only going to be taxed once, but double tax doesn't make it worthwhile.

My initial suggestion is that he needs to tell them he will no longer be a Canadian resident and that for this to work he will have to be an overseas contractor and he would invoice them in GBP. I'm not sure they will agree to this though.

If anyone has any advice or solutions (even if it is run like hell from this offer!) then I would be grateful!

JonboyE

He will not pay tax twice. Any tax he pays on his Canadian earnings can be deducted from tax owing in the UK on the same earnings.

Steve_

But how would you do that if you're faking Canadian residence?

You can't be resident in two places for tax purposes, it's as simple as that really.

They need to set up a UK payroll basically to pay him.

Or, probably a better idea is he becomes self-employed in the UK and just invoices them. From the description it sounds as though they're just scared of dealing with UK bureaucracy and want it to be the same as for any other employee, well the simpler solution is for him to be self-employed, he deals with HMRC and just sends them an invoice.

Doesn't help with the currency exchange as they want to be billed in Canadian dollars but it is doable whereas their plan is not. There's no problem having a Canadian bank account and being non-resident.

Perhaps I should have read your whole post first but yes, this.

JonboyE

You can be employed in Canada and be a non-resident, and file a non-resident tax return each year. I agree that providing self-employed services from the UK is the better way, but if staying on the Canadian payroll is the deal breaker it can be made to work.

I don't understand why they seem to want him to fake Canadian residency. That sounds dodgy to me. Maybe they don't understand the rule properly.

[Edit] Six months? Is staying within OHIP a requirement for the job? Maybe they are thinking of the old PR requirement of no more than 6 months out of the country at a time.

Steve_

The idea behind non-resident returns though is that you're actually working in Canada. Just sounds like a loopy payroll dept. to me.

victorfoxtrot

Yes I think they are. Transpires they have realized this is completely unworkable and are looking into him becoming a contractor for them and him invoicing them. We just now need to work with the HMRC to understand how he should register, as it seems that because he is to all intents and purposes still their employee he cannot register as a sole trader. So I believe that leaves him with the option of registering as. Limited Company, but not sure this is all worth it if we don't intend for it to be long term.

Thanks for the advice!