Working remotely for UK company from Canada
#1
Just Joined
Thread Starter
Joined: Jul 2019
Posts: 9
Working remotely for UK company from Canada
Hi everyone,
I've searched the forums rigorously and appreciate there's some advice out there on this, but I'm really struggling to find the answer I need and time is ticking for me.
My partner and I have PR status for Canada, triggered in Jan this year. He moved to Vancouver in April and I have stayed in the UK to work whilst he gets settled. I am now looking to join him over the next few months. The company I currently work for in the UK would like to keep me working for them remotely from Canada, however the payroll department have raised some issues about how to pay me, as they do not have a Canadian payroll system set up.
I am therefore looking at what/ if there are options for me to carry on working for the UK company whilst in Vancouver. My work would be only for one UK based company (the one I work for now). The preferred option (by my employer) would be for me to move to be a contractor, and invoice them directly for the work undertaken, which I believe may negate their PAYE obligations, and I then file my taxes to the CRA?
I'm sure I cannot be the only person looking to/ doing this, however currently feeling a bit overwhelmed and lost by the situation, therefore any advice would be greatly appreciated/
Thanks in advance!
I've searched the forums rigorously and appreciate there's some advice out there on this, but I'm really struggling to find the answer I need and time is ticking for me.
My partner and I have PR status for Canada, triggered in Jan this year. He moved to Vancouver in April and I have stayed in the UK to work whilst he gets settled. I am now looking to join him over the next few months. The company I currently work for in the UK would like to keep me working for them remotely from Canada, however the payroll department have raised some issues about how to pay me, as they do not have a Canadian payroll system set up.
I am therefore looking at what/ if there are options for me to carry on working for the UK company whilst in Vancouver. My work would be only for one UK based company (the one I work for now). The preferred option (by my employer) would be for me to move to be a contractor, and invoice them directly for the work undertaken, which I believe may negate their PAYE obligations, and I then file my taxes to the CRA?
I'm sure I cannot be the only person looking to/ doing this, however currently feeling a bit overwhelmed and lost by the situation, therefore any advice would be greatly appreciated/
Thanks in advance!
#3
Re: Working remotely for UK company from Canada
Hi everyone,
I've searched the forums rigorously and appreciate there's some advice out there on this, but I'm really struggling to find the answer I need and time is ticking for me.
My partner and I have PR status for Canada, triggered in Jan this year. He moved to Vancouver in April and I have stayed in the UK to work whilst he gets settled. I am now looking to join him over the next few months. The company I currently work for in the UK would like to keep me working for them remotely from Canada, however the payroll department have raised some issues about how to pay me, as they do not have a Canadian payroll system set up.
I am therefore looking at what/ if there are options for me to carry on working for the UK company whilst in Vancouver. My work would be only for one UK based company (the one I work for now). The preferred option (by my employer) would be for me to move to be a contractor, and invoice them directly for the work undertaken, which I believe may negate their PAYE obligations, and I then file my taxes to the CRA?
I'm sure I cannot be the only person looking to/ doing this, however currently feeling a bit overwhelmed and lost by the situation, therefore any advice would be greatly appreciated/
Thanks in advance!
I've searched the forums rigorously and appreciate there's some advice out there on this, but I'm really struggling to find the answer I need and time is ticking for me.
My partner and I have PR status for Canada, triggered in Jan this year. He moved to Vancouver in April and I have stayed in the UK to work whilst he gets settled. I am now looking to join him over the next few months. The company I currently work for in the UK would like to keep me working for them remotely from Canada, however the payroll department have raised some issues about how to pay me, as they do not have a Canadian payroll system set up.
I am therefore looking at what/ if there are options for me to carry on working for the UK company whilst in Vancouver. My work would be only for one UK based company (the one I work for now). The preferred option (by my employer) would be for me to move to be a contractor, and invoice them directly for the work undertaken, which I believe may negate their PAYE obligations, and I then file my taxes to the CRA?
I'm sure I cannot be the only person looking to/ doing this, however currently feeling a bit overwhelmed and lost by the situation, therefore any advice would be greatly appreciated/
Thanks in advance!
I would retain a UK bank account and have your employer pay your income into that, then use TransferWise (or another service) to move the money to your Canadian account.
#4
Banned
Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: Working remotely for UK company from Canada
Get a business license from the City you are living in, in Canada - be self employed, invoice the company in the UK.. they transfer the funds (sterling) to your bank account in Canada without any deductions as you are not employed by them any longer.. you are a self employed freelance contractor - in effect they are paying your invoice- not paying you a wage. (you will want to file a P85 and also apply for any tax refund you might be due in the UK).
You will pay a $17 wire transfer fee (tax deductable) for each transfer into your Canada bank account - bank charges here are a pain, but there are low cost / no cost options - look at RBC small business online account, free - (so if you can invoice them bi-monthly it works out better for you - though exchange rates can be a killer). Each year you submit your tax return in Canada as a self employed person and pay your income taxes and CPP contributions. If you earn more than $30,000 you will also need to register for GST/HST. You don't charge the UK company GST/HST unless a project you are working on is based for a company in Canada... HST/GST is 0 rated for overseas clients, but you still have to register for it.
It's easy... not complex.. and no tax liability from the UK... you also get to have tax deductables such as 'use of home office' This might help: https://smallbusinessbc.ca/resources/howtos-checklists/ and https://smallbusinessbc.ca/business-...-requirements/
I've worked for a UK agency for 6 years as a freelance contractor.. remotely.
You will pay a $17 wire transfer fee (tax deductable) for each transfer into your Canada bank account - bank charges here are a pain, but there are low cost / no cost options - look at RBC small business online account, free - (so if you can invoice them bi-monthly it works out better for you - though exchange rates can be a killer). Each year you submit your tax return in Canada as a self employed person and pay your income taxes and CPP contributions. If you earn more than $30,000 you will also need to register for GST/HST. You don't charge the UK company GST/HST unless a project you are working on is based for a company in Canada... HST/GST is 0 rated for overseas clients, but you still have to register for it.
It's easy... not complex.. and no tax liability from the UK... you also get to have tax deductables such as 'use of home office' This might help: https://smallbusinessbc.ca/resources/howtos-checklists/ and https://smallbusinessbc.ca/business-...-requirements/
I've worked for a UK agency for 6 years as a freelance contractor.. remotely.
Last edited by Siouxie; Jul 23rd 2019 at 2:26 pm.
#5
Just Joined
Thread Starter
Joined: Jul 2019
Posts: 9
Re: Working remotely for UK company from Canada
Get a business license from the City you are living in, in Canada - be self employed, invoice the company in the UK.. they transfer the funds (sterling) to your bank account in Canada without any deductions as you are not employed by them any longer.. you are a self employed freelance contractor - in effect they are paying your invoice- not paying you a wage. (you will want to file a P85 and also apply for any tax refund you might be due in the UK).
You will pay a $17 wire transfer fee (tax deductable) for each transfer into your Canada bank account - bank charges here are a pain, but there are low cost / no cost options - look at RBC small business online account, free - (so if you can invoice them bi-monthly it works out better for you - though exchange rates can be a killer). Each year you submit your tax return in Canada as a self employed person and pay your income taxes and CPP contributions. If you earn more than $30,000 you will also need to register for GST/HST. You don't charge the UK company GST/HST unless a project you are working on is based for a company in Canada... HST/GST is 0 rated for overseas clients, but you still have to register for it.
It's easy... not complex.. and no tax liability from the UK... you also get to have tax deductables such as 'use of home office' This might help:
I've worked for a UK agency for 6 years as a freelance contractor.. remotely.
You will pay a $17 wire transfer fee (tax deductable) for each transfer into your Canada bank account - bank charges here are a pain, but there are low cost / no cost options - look at RBC small business online account, free - (so if you can invoice them bi-monthly it works out better for you - though exchange rates can be a killer). Each year you submit your tax return in Canada as a self employed person and pay your income taxes and CPP contributions. If you earn more than $30,000 you will also need to register for GST/HST. You don't charge the UK company GST/HST unless a project you are working on is based for a company in Canada... HST/GST is 0 rated for overseas clients, but you still have to register for it.
It's easy... not complex.. and no tax liability from the UK... you also get to have tax deductables such as 'use of home office' This might help:
I've worked for a UK agency for 6 years as a freelance contractor.. remotely.
Good to know there are other people out there making it work! Thanks again.
#6
Re: Working remotely for UK company from Canada
I do some work for a UK university. When I moved across they had me as a contractor and required that I had some sort of entity which I do (I have a local partnership). I invoiced them in GBP and money was paid to my UK bank account. I declared it to the CRA and paid tax.
Now they've put me back on payroll. I still declare to the CRA and also declare any GBP tax paid.
In my case the amounts are not that huge (it's part time) and there doesn't seem to be an issue. I've also done one off jobs for other UK universities in the past and they've just paid me in GBP and deducted the tax. I think as long as you declare to the CRA and pay tax somewhere it seems to be okay.
Now they've put me back on payroll. I still declare to the CRA and also declare any GBP tax paid.
In my case the amounts are not that huge (it's part time) and there doesn't seem to be an issue. I've also done one off jobs for other UK universities in the past and they've just paid me in GBP and deducted the tax. I think as long as you declare to the CRA and pay tax somewhere it seems to be okay.
#7
Banned
Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: Working remotely for UK company from Canada
Thank you so much for the advice, really appreciate it- fills me with hope that its do-able! Would the fact that I would be contracted by just the one UK company full time likely present a problem? There would also be no agency middle man involved, but unsure if any of that makes a difference?!
Good to know there are other people out there making it work! Thanks again.
Good to know there are other people out there making it work! Thanks again.
Theoretically having only 1 client could raise flags with Revenue Canada but you can easily explain that you have just started out in business in Canada and are building it up... make yourself a little website (you can make a free one even initially) to advertise your business services.. or a free advert on kijiji or craigs list.. "remote office services". Don't forget that you are invoicing them for your billable hours... you can adjust them to reflect working for instance 10 hours 3.5 days a week - so full time hours but not full time work.
If you are into Social engagement or similar, it would be easy to create a small website and offer your services to others. You might even be able to get some help to start up your business as a newcomer entrepreneur - that's the route I would go down.
https://www.bdc.ca/en/i_am/newcomer-...s/default.aspx
I effectively have 1 client in the UK - the agency - even though I undertake work for multi national worldwide companies.. I invoice the agency for my billable hours.. it's definitely do-able
Last edited by Siouxie; Jul 24th 2019 at 1:32 am.
#8
Re: Working remotely for UK company from Canada
Thank you so much for the advice, really appreciate it- fills me with hope that its do-able! Would the fact that I would be contracted by just the one UK company full time likely present a problem? There would also be no agency middle man involved, but unsure if any of that makes a difference?!
Good to know there are other people out there making it work! Thanks again.
Good to know there are other people out there making it work! Thanks again.
- It’s very common for people to have this arrangement, I know of lots of people who have worked that way for 20 years and a few who have for 30
- There are no longer significant tax advantages to the arrangement. When there were lots of deductions for being “self employed” then there was reason for the CRA to audit individuals working this way, now there aren’t so the auditors have bigger fish to fry
#9
Banned
Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: Working remotely for UK company from Canada
As mentioned, there is a theoretical exposure to the CRA deeming you to be a de facto employee of the UK company. I don’t see this as a major risk because:
- It’s very common for people to have this arrangement, I know of lots of people who have worked that way for 20 years and a few who have for 30
- There are no longer significant tax advantages to the arrangement. When there were lots of deductions for being “self employed” then there was reason for the CRA to audit individuals working this way, now there aren’t so the auditors have bigger fish to fry
EHT/GST/HST (goods and services tax) you must register when you reach an income of $30,000 but if invoicing for services supplied to overseas companies or individuals it's rated at "0" -.
https://www.canada.ca/en/revenue-age...s-exports.html
and https://www.canada.ca/en/revenue-age...-commerce.html
Section 7 of Part V of Schedule VI to the Act is the general zero-rating provision for exported services. Pursuant to this section, a supply of a service made to a non-resident person is zero-rated
Last edited by Siouxie; Jul 24th 2019 at 2:43 pm.
#10
Re: Working remotely for UK company from Canada
It's not strictly relevant to the thread but I've never understood how this is intended to work. Suppose I sell things, not myself but actual things, lower flange sprocket gaskets. Doe I sell $29,999 worth without collecting and remitting HST and then charge 13% HST on the next one sold or do I charge 13% from day one and put the first thirty grand's worth of HST in my pocket? Neither seems right.
#11
Re: Working remotely for UK company from Canada
It's not strictly relevant to the thread but I've never understood how this is intended to work. Suppose I sell things, not myself but actual things, lower flange sprocket gaskets. Doe I sell $29,999 worth without collecting and remitting HST and then charge 13% HST on the next one sold or do I charge 13% from day one and put the first thirty grand's worth of HST in my pocket? Neither seems right.
It is always worth charging it simply to obtain the credit for all the GST/HST you have to pay.
#12
Re: Working remotely for UK company from Canada
So, if I didn't register and I've sold $29,999 worth of things, not knowing if I'll sell more and not charging HST, I can't sell another unit because I'll then be liable for the HST for the first $29,999. On the other hand, I could register at the outset but, if I don't know how many I'm going to sell, registering and remitting is a hassle I don't need.
Services are easier; simple method, collect 13% remit 8.8% (in Ontario). No problem.
#13
Re: Working remotely for UK company from Canada
Thanks.
So, if I didn't register and I've sold $29,999 worth of things, not knowing if I'll sell more and not charging HST, I can't sell another unit because I'll then be liable for the HST for the first $29,999. On the other hand, I could register at the outset but, if I don't know how many I'm going to sell, registering and remitting is a hassle I don't need.
Services are easier; simple method, collect 13% remit 8.8% (in Ontario). No problem.
So, if I didn't register and I've sold $29,999 worth of things, not knowing if I'll sell more and not charging HST, I can't sell another unit because I'll then be liable for the HST for the first $29,999. On the other hand, I could register at the outset but, if I don't know how many I'm going to sell, registering and remitting is a hassle I don't need.
Services are easier; simple method, collect 13% remit 8.8% (in Ontario). No problem.
#14
Re: Working remotely for UK company from Canada
Fair enough, I didn't consider that someone providing services might have expenses - in our business they're negligible.