Working remotely for a UK-based company
#1
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Joined: Jan 2012
Posts: 28
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
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
#2
Re: 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
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
#6
Re: Working remotely for a UK-based company
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.
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.
#7
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Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
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.
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.
#8
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.
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.
#9
Re: 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
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
#10
Just Joined
Thread Starter
Joined: Jan 2012
Posts: 28
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.
Yes, I am aware it's not a real word. Sorry for writing it here!
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.
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.
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.
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.
I'm intending to apply for a 2nd year on the IEC, so I think I will most likely submit taxes.
#11
BE Forum Addict
Joined: Sep 2010
Location: Maryland (via Belfast, Manchester, Toronto and London)
Posts: 4,802
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/
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/
Last edited by MarylandNed; Mar 9th 2012 at 5:51 pm.
#12
Re: Working remotely for a UK-based company
#13
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Joined: Jul 2007
Location: White Rock BC
Posts: 11,693
Re: Working remotely for a UK-based company
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.
I'm intending to apply for a 2nd year on the IEC, so I think I will most likely submit taxes.
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.
#14
Just Joined
Thread Starter
Joined: Jan 2012
Posts: 28
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.
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.
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.
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.