Winterdiva

Hello 👋 ,
Hope you all are well and safe. I’m preparing to put forward a proposal to my uk employer to let me keep my job when I move to a canada. Fingers crossed 🤞!
Anyone here doing this already? Please can you tell me about how you/your employer are handing it from taxation perspective? Are you a permanent employee or on a contract?

any relevant advice is gratefully received!

Siouxie

Freelance contractor (self employed) - that way you invoice them and are able to claim use of home office expenses on taxes.. set up a Transferwise mult currency (borderless) account and they can pay your invoice directly to your 'uk account (on transferwise) and you can transfer the money to your Canada bank account without paying incoming wire transfer fees.
Lots of threads on the subject

Winterdiva

Thanks Siouxie. Is there any other way ? I doubt my employer will be ok with the self-employed route

OrangeMango

I always understood that it's about where you're spending more than 180 days in any year is where you have to pay your taxes.

Also as a Canadian citizen, I've often worked for a UK employer in my life, but spent 3 or 4 weeks at one time in Canada, simply renting an AirBnB and working from home, which was possible in my role.

The CRA in Canada didn't care much, but I also didn't tell them much. Things would have changed if I would have been in Canada more than 180 days. I just had to make up for the time change, get up early, to do my job, and as long as my employer was fine with that and I could cope with the time change nothing really was impossible.....

Siouxie

Yes, you can be employed and have your NI and taxes deducted by your employer https://www.gov.uk/tax-uk-income-live-abroad - then declare the income on your tax return in Canada (you are required to declare world income), show proof that you have paid any taxes in the UK and have them offset against taxes due in Canada... see the links for the rest tax wise
https://britishexpats.com/wiki/Tax_Residency-Canada
https://britishexpats.com/wiki/Taxation-Canada
https://www.gov.uk/government/public...nadaindividual

Advantages? - You still have NI contributions being made.

Disadvantages?
You won't be able to make any 'home office' deductions for taxes unless you regularly meet clients at your home office and your employer signs a contract and certifies that you do so.
You won't be making any contributions to CPP nor EI - which means no unemployment pay and a low Pension. (As a self employed person you can opt out of making EI payments, but have to pay CPP)

There are members who work for UK employers who can offer more advice on the tax implications for the UK end.

You were deemed non resident for tax purposes as you don't have significant ties to Canada nor have stayed here long enough in any year
https://www.canada.ca/en/revenue-age...ts-canada.html

The OP will be living in Canada, not visiting and will be resident for tax purposes.
https://www.canada.ca/en/revenue-age...cy-status.html.

OrangeMango

Non resident for tax purposes yes, Not having significant ties, I wouldn't say so. Canadian citizenship and having lived in Canada for more than 6 years are significant ties to me.

However this is purely a tax question. It's not a citizenship question, and neither an immigration matter, at least not in my case.

I could probably do this many many times during the year as long as the CRA doesn't believe I am longer than 180 days in the country. HMRC certainly wouldn't complain as I'd be paying taxes to them and as long as my boss is fine with it, and I get up at 2am in the morning each day to start my work, nobody really cares......

Siouxie

I hope that you don't get caught, if you are staying longer than 180 days a year.. there are significant penalties for tax evasion.
Perhaps read the link I gave in response to your post, which explains 'non resident for tax purposes' -

Nothing to do with nationality.

Now back to the OP's questions... who will be residing as a tax resident in Canada, not as a visitor. Thanks.

OrangeMango

I would certainly qualify for secondary residential ties in Canada. So far I've never had any issues with the CRA.

In the end, if I was in Canada longer than 180 days I would have to inform the HMRC in the UK and claim the taxes back from the UK and have that income taxed in Canada with the CRA.

I would largely assume that it's the tax year not the calendar year which counts.

dj322

I am in the process of my employer allowing me to work from Canada. They too prefer to continue paying me through PAYE and won't let me work as a self employed person. I was under the impression once I move, then I will be a tax resident of Canada, although if my spouse leaves before me then that would be a significant tie, meaning that's when I would be liable for tax in Canada, is this correct? If this is the case, then would I always be a tax resident of Canada as long as my spouse stayed in Canada??

With CPP and EI, what is the solution to this problem? For instance, say I worked for my UK employer forever but I needed healthcare or treatment in Canada, how would that work? I guess my spouse could get a job where the company provides extended healthcare coverage to us both? Ultimately I would like the flexibility to live between two countries as I am dual citizen with family in both countries but healthcare, taxes, pensions and social security are concerns.

Siouxie

You don't have to pay EI as a self employed person unless you opt in. You pay CPP as a self employed person (or both as an employee in Canada). CPP is Canada Pension Plan.. EI is Employment Insurance - for if you lose your job, etc. Neither has any bearing on healthcare - healthcare comes as being a resident of a Province, nothing to do with income, you will need to be resident in the Province for a specific amount of time each year to continue to qualify for it... https://britishexpats.com/wiki/Medical_Insurance-Canada

You have to declare your world income if you are living in Canada or are considered resident for tax purposes.. there are differences in being resident for tax purposes and being a physical resident - primary and secondary ties etc., see CRA for details https://www.canada.ca/en/revenue-age...cy-status.html

Perhaps check back on your previous thread on taxation? Canada/UK double taxation query

Bhav88

Hi All, also in a similar situation, just moved to Toronto and working for my uk employer in IT. Still working out best way to make this work long term.

I initially thought I could simply get a No Tax code (NT) in uk and just declare in my tax returns in Canada, though spoken to some accountants who have advised employer may be liable to a fine as they are not deducting tax/ei etc at source on payslip. They do not have a Canadian entity.

Come across companies who provide POE/EOR services and essentially become the 'middleman' and provide Canadian payslips, though this service seems to be quite costly.

Third option is self employed route, do I have to open a separate bank account for this? and do i need to create a website for my services. Is this route viable? Do i need to worry about employee miss-classification?

Appreciate any help and guidance?

Siouxie

Hello and welcome to BE!
I would recommend the self employed route (why pay a 3rd party a percentage of your hard earned income every month, just to be the middleman for you!) Send the company in the UK an invoice once a month for your services - it's rated at 0% HST as they are overseas and you are providing a service, not a physical item.

You will be a freelance contractor and they won't have any liability to deduct NI/Taxes. (there are also tax advantages in Canada - use of home office) https://www.canada.ca/en/revenue-age...ed-income.html

Open a borderless account with Transferwise or similar, so then you pay their fee rather than an incoming wire transfer fee in Canada. You can give your clients in the UK your 'virtual' bank account with them.

You don't need to create a website, but you could (there are free and very low cost hosting available) - or just put an advert in Kijiji or similar You have just moved to a new country - you are building your business, this is your first client



You can open an RBC small business e-account, if you want to - $5 a month

Bhav88

Thank you Siouxie! Appreciate your response. Agree with why pay a middleman!