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Working remotely in the UK for a Canadian corporation - taxes

Working remotely in the UK for a Canadian corporation - taxes

Old Aug 2nd 2014, 7:23 pm
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Default Working remotely in the UK for a Canadian corporation - taxes

I'm moving back to the UK permanently in a couple of months, and everything I've researched so far suggests I will be non-tax resident for Canada and tax-resident for the UK at that point (sold Canadian house, all family going, giving up health card, drivers licences, renting house in UK).

I'm a partner in a small Canadian corporation, and usually receive employee income and dividends. The plan is to continue to work remotely for Canadian clients, but also set up a UK subsidiary of the corporation to generate UK income (this bit looks straightforward, register company, set up for charging VAT, ETC).

I'm obviously going to get tax advice here and in the UK, but some general guidance would be greatly appreciated. I've only seen this question the other way round before on this forum (Souvy, I know you do this).

1. Canadian corp can pay me gross as an employee, I move money to UK bank account and do self assessment and pay taxes/NI in UK as if self employed?
2. Any issue with claiming moving expenses back to Canadian corp, as I'm essentially being sent over to expand the company?
3. Once the UK subsidiary is registered, do I move my Canadian income to the UK corp and pay myself as an employee, or keep taking it gross from Canada and tax as self employed?
4. UK income - how does it get back to the other Canadian partners? Taxed in UK first?

Any insights greatly appreciated.
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Old Aug 3rd 2014, 5:46 pm
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Default Re: Working remotely in the UK for a Canadian corporation - taxes

Originally Posted by Tuppence View Post
I'm a partner in a small Canadian corporation, and usually receive employee income and dividends.
So what kind of entity is this? Corporations normally have stockholders and directors, not partners.

In general, working as an employee in the U.K. for a foreign entity is complex because of the need to self-report and pay National Insurance, you could have to pay the equivalent Canadian social insurance without relief for effective double taxation. You may also find your employer has to continue to withhold Canadian income tax, although that is normally less of a problem as long as you can claim credit against your U.K. income tax.

Most of the time, if working cross-border, it makes more sense to do so as a self-employed consultant rather than an employee. Unless this Canadian entity is willing to set up a U.K. branch or subsidiary and put you on a U.K. payroll.

Last edited by JAJ; Aug 3rd 2014 at 5:49 pm.
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Old Aug 3rd 2014, 10:48 pm
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Default Re: Working remotely in the UK for a Canadian corporation - taxes

Originally Posted by JAJ View Post
So what kind of entity is this? Corporations normally have stockholders and directors, not partners.

In general, working as an employee in the U.K. for a foreign entity is complex because of the need to self-report and pay National Insurance, you could have to pay the equivalent Canadian social insurance without relief for effective double taxation. You may also find your employer has to continue to withhold Canadian income tax, although that is normally less of a problem as long as you can claim credit against your U.K. income tax.

Most of the time, if working cross-border, it makes more sense to do so as a self-employed consultant rather than an employee. Unless this Canadian entity is willing to set up a U.K. branch or subsidiary and put you on a U.K. payroll.
Thanks for your reply. Sorry for the terminology confusion. Yes, I'm a shareholder and Director.
I will dig into the potential deductions the Canadian employer might have to take then.
The plan is to set up the UK branch, so hopefully that will make it cleaner.
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Old Aug 4th 2014, 10:50 am
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Default Re: Working remotely in the UK for a Canadian corporation - taxes

Originally Posted by Tuppence View Post
Thanks for your reply. Sorry for the terminology confusion. Yes, I'm a shareholder and Director.
I will dig into the potential deductions the Canadian employer might have to take then.
The plan is to set up the UK branch, so hopefully that will make it cleaner.
I'm no help on the tax questions but I wanted say good luck with the move back.

Has S got something lined up too?
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Old Aug 4th 2014, 8:13 pm
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Default Re: Working remotely in the UK for a Canadian corporation - taxes

Originally Posted by Novocastrian View Post
I'm no help on the tax questions but I wanted say good luck with the move back.

Has S got something lined up too?
Thank you!
Not yet, but now he's given notice, the cross border networking has begun.
Definitely easier going back than coming out - apart from the bloomin passport office taking forever :-(
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