Working remotely for a UK-based company
 

Hi everyone,

I've recently received my LOI for the IEC program, and I will be moving to Toronto in 7 weeks time. My current UK-based employer has agreed to employ me to work remotely from Canada. I think it is fantastic as I'll have a job the moment I get there, I can work wherever I want, and I manage my own schedule/time.

Anyways, I would you like to know if there is anything I should be aware of in regards to tax etc. My employer is purely UK-based, but we are not sure of what tax I should be paying, or how I should be paid my salary etc.

We've only just started talking about this today, however I thought I'd ask here in case anyone has any guidance or information to contribute.

Thank you in advance,
Simon

Re: Working remotely for a UK-based company
 

Souvenir has worked that way for years, try sending him a Private Message.

Re: Working remotely for a UK-based company
 

In his current guise, he goes under the name "Souvy" in case you can't find him on the members list.

Re: Working remotely for a UK-based company
 

Oh yes, "Expatpat", I thought, knowing that was no longer the nom du jour. I wish he'd move on to "Stevens" and have done with it.

Re: Working remotely for a UK-based company
 

I expect he'll move on to "Stevens" shortly after you finally embrace "Harry H Corbett".;)

Re: Working remotely for a UK-based company
 

Unless they have an office in Canada or are willing to set up a Canadian payroll (either way, Canadian business number), the only way to do it is to be self-employed or start a corporation and do all the payroll yourself. And presumably if they did it they'd have to qualify to hire someone who was in the IEC. Starting a corporation requires you to be a tax resident of Canada to use a CCPC, but you're better off being self-employed from your description, I'm not sure though if people on the IEC can legally be self-employed (or start a a corporation that is essentially self-employment), you'd have to check with CIC. Kind of defeats the purpose of getting international experience though if you could, I would have thought.

Not a word.

Unless they're willing to do a ton of paperwork for one person, basically the principle is you set up your own business and invoice them. Requires you to have a business number, so that you can do payroll and HST. Business services to an overseas company are considered a zero-rated export.

http://www.cra-arc.gc.ca/E/pub/tg/t4002/t4002-11e.pdf - and various other publications. You should understand what a business number is and also read the GST/HST guide.

Re: Working remotely for a UK-based company
 

Why would he need to go to all that trouble when he is only on a 1 year WHV?

Couldn't his salary just be paid, per normal, into his UK Bank account and then he could withdraw funds as necessary - or transfer funds - and leave it at that?

Presumably if he is still in Canada at the end of the year he would have to do a tax return stating 'worldwide income' but with the tax treaty in place it's unlikely that he would have a tax liability in Canada.

:unsure:

Re: Working remotely for a UK-based company
 

Because he's earning the money while physically in Canada, so the salary is Canadian source and must have Canadian payroll/income taxes paid on it.

There are some limited exemptions for people being transferred between offices and so on but none of them apply here and it doesn't as sound as though the UK employer would go to all that trouble for one person. And he would have to be on an intracompany transfer visa, which he's not.

Re: Working remotely for a UK-based company
 

I do this. If you need any information regarding payroll providers who can work with UK companies let me know.

Re: Working remotely for a UK-based company
 

Thank you both, I will send Souvy a private message.


The IEC website specifies that the IEC work permit is "valid for any type of job", so being self-employed may be viable, and probably the best option.

Yes, I am aware it's not a real word. Sorry for writing it here!

I just checked the IEC website and it states that most IEC participants are considered "non-residents" and hence not required to pay tax. However a participant may file taxes if they reside in Canada for six months or more during a tax year - subject to any tax treaties.

I'm intending to apply for a 2nd year on the IEC, so I think I will most likely submit taxes.

Re: Working remotely for a UK-based company
 

So people can't use slang or colloquialisms?

In fact, it is a word in North American English. You can check here:

http://oxforddictionaries.com/defini...ways?q=anyways

http://dictionary.reference.com/browse/anyways

It's also a valid Scrabble word:

http://www.scrabblefinder.com/word/anyways/

Re: Working remotely for a UK-based company
 

Pah! You put that on my board and I'd jiggle my rack at you. Sibilance is a disability, not an excusable variant of English.

Re: Working remotely for a UK-based company
 

I am not so sure about that.

By custom and practice most holders of working holiday visas are taxed as factual residents for the time they are in Canada.

You are a factual tax resident if you establish sufficient residential ties to Canada. The number of months is not an issue. This is the common law definition. A factual resident pays tax in Canada on their worldwide income for the time they are in Canada.

If you do not establish sufficient residential ties to Canada, but nonetheless spend more than six months in Canada, you may be deemed to be tax-resident here. This is a statutory provision and should not be confused with the fact based common law approach. A deemed resident pays tax in Canada on their worldwide income for the whole of the year they are a deemed resident.

If you do not establish sufficient residential ties residential ties and stay less than six months you are taxed as a non-resident. A non-resident pays tax in Canada on Canadian sourced income but they are not entitled to a personal allowance.

Under the UK/Canada tax treaty you cannot be tax-resident in both countries at once. There are tie-breaker rules to apply when reside is uncertain. However, working holiday visas are intended for young people who generally will not have much in the way of overseas income or assets so the convention of taxing them as factual residents makes life easier for everyone.

Re: Working remotely for a UK-based company
 

Hi JonboyE,

Thank you for your response.

I just re-read the guide on the IEC website, and I think you are correct in that I would have to file a Canadian tax return either as a "resident" or a "non-resident". I misread the guide, and incorrectly thought it meant non-residents didn't need to file taxes in Canada. :o

I'm thinking that the easiest approach may be for my employer to pay me as a contractor, and I file my taxes in Canada as a resident. However, I still want to investigate what other options we have.

Re: Working remotely for a UK-based company
 

Or Nosferatu.