wbexpat

Hey gang
Im a Brit/Canadian dual national.
I make a living via a Nova Scotia Ltd Co (fixing computers).
I may for personal reasons end up taking a 6-12 month contract back in the UK.

Im trying to get ahead of the tax and corporate issues. If anyone's been down this path I would welcome some words of wisdom.

1. Dual citizen, so I can work wherever no problem there.
2. I will be in UK, family will be in CA.
3. Both CA AND UK will consider me resident for tax purposes no?
4. Do I start a UK Ltd Co? Or continue to operate through Canadian Ltd Co?
5. There's a tax treaty but I dont want CRA AND UKRevenue both with their hands out so is there one structure better than another?
6. Anyone know an accountant that knows how to do this?

Any other recommendations?

I do intend to take professional advice but most of the accountants I know are like deer in headlights with this scenario.

jerry brewer

Hi
I have uk income but live in canada,
the tax treaty for me means i pay tax in uk & tax in canada,
then reclaim my uk tax
might be similar for you ?
cheers
jerry

wbexpat

When you say "reclaim the uk tax" do you mean there's a box in your CRA return called "reclaim tax already paid in the UK" or "get credit for tax already paid elsewhere" similar?

jerry brewer

Hi
No, nothing with CRA, they just tax me on it at the end of the tax year,
This is how it works for me , the UK tax office sends me a letter, about mid year, agreeing i have not earnt enough in the UK to pay tax, then some weeks later they send me a cheque in £'s.
But it seems after two years i may have stopped paying tax in the UK
Which is good, as for a few months i pay tax in canada and the UK, until i get the refund cheque from the UK.
Cheers
Jerry

wbexpat

Righto. Thanks for clarification.
All sounds reasonably straightforward.
Thanks

jerry brewer

hi
Yeah it was suprisingly quite easy
Cheers
Jerry

Steve_

I assume you're not on someone else's payroll?

Well you can either do it two ways, have a UK payroll for your Canadian company or be self-employed in the UK. You could set up a UK company and invoice back and forth but that sounds overcomplex for a short stay.

If it's less than six months then you could just remain on the payroll of your Canadian company. That company invoices the UK client. GST/HST is zero-rated on the export of services. Avoid creating a "permanent establishment" in the UK in that scenario.

If you have a UK payroll you are taxed via PAYE obviously on your UK-source income and then have to claim a foreign tax credit on T2209.

Does make it simpler if you can go on the client's payroll, because then they do all the payroll stuff for you, you tell HMRC you still live in Canada and then you only really have to worry about claiming the foreign tax credit.

Steve_

But he's talking about staying for 6+ months, so I'm assuming he would have earned enough to pay UK tax.