Working remotely in the UK?

Are any Canadians doing this? My current employer in Canada has said I can do this while I accompany my husband while he works in London for the next 3 years. I will have a Visa that his company is providing us with.

I have a few questions:

- Which country do I file taxes in? I will be back in Canada every 3-4 months, so filing my information here shouldn't be a problem.
- Does my canadian employer have to transfer pay to an English account and take off english taxes or can I keep payng the Canadian system? I would prefer to just keep my Canadian account open if possible.
- Is there any paperwork my work needs to fill out to make this legit?
- Would I still be able to contribute to RRSP's from my Canadian accounts while I am abroad?

Any insight to these questions would be really helpful.

The following answers are the best of our knowledge, so please consult an accountant or a fiscalist that specializes in both country for more certainty.

If you continue to work for a Canadian company, you'll have to continue paying taxes in Canada. You won't have to pay taxes in the UK as individuals don't usually pay taxes unless they are director of a company. Your canadian employer won't have to open and transfer pay to a UK account. You can continue to be paid to your Canadian bank account.

You will have to verify with your bank, but you won't be able to contribute to RRSP while you're abroad as you have to be a resident of Canada to be allowed to do so.

VisaWise | Immigration Consultancy
OISC Registered Immigration Advisers
London, United Kingdom
info@visa-wise.co.uk
http://www.visa-wise.co.uk

-- Thu Mar 31, 2011 5:12 pm --

The following answers are the best of our knowledge, so please consult an accountant or a fiscalist that specializes in both country for more certainty.

If you continue to work for a Canadian company, you'll have to continue paying taxes in Canada. You won't have to pay taxes in the UK as individuals don't usually pay taxes unless they are director of a company. Your canadian employer won't have to open and transfer pay to a UK account. You can continue to be paid to your Canadian bank account.

You will have to verify with your bank, but you won't be able to contribute to RRSP while you're abroad as you have to be a resident of Canada to be allowed to do so.

VisaWise | Immigration Consultancy
OISC Registered Immigration Advisers
London, United Kingdom
info@visa-wise.co.uk
www.visa-wise.co.uk

I think, from a tax point of view most of this answer is incorrect.
The question on visa remains unanswered, and visawaise seemed to skirt that issue.


From a tax point of view however, both UK regs and the treaty would require the payment of tax in UK rather than Cdn tax, since the person would be both resident and working in UK, and not canada. The person is not merely visiting UK and working temporarily, they are moving from canada, and thus becoming non-resident for tax purposes, by treaty. There is also the issue of social security funding which would need to be determined, based on where the person is working, not merely where the comapny is located.

The final destination of the wages is unimportant in this.

The matter of RRSP would be decided by the bank/fund company. There is no Cdn tax or other law that prevents non-residents from making RRSP contributions. However the laws which govern securities in the new country of residence, can force or encourage a bank to deny new contributions, to avoid the need to comply with foreign regulatory rules (this was the case for many years in ythe US, since solved on a state-by-state basis in the early 2000's.).

So, the question is still whether the person can legally live and work remotely in UK, without a status that allows it? If the answer is yes, baecause the accompanying spouse is granted such a status, then the tax issue can easily be addressed as above.

As this person would still have economic ties in Canada, we think that she would remain a resident of Canada for tax purposes but as we said, any taxes issues would have to be confirmed by a fiscalist.

As for the UK visa issue, we understand that she will be applying as her husband's Tier 2 Intra-company transfer dependent. Dependents of economic migrants are allowed to live and work in the UK.The fact that she will be working remotely is relevant for taxes purposes only.

VisaWise | Immigration Consultancy
OISC Registered Immigration Advisers
London, United Kingdom
info@visa-wise.co.uk
http://www.visa-wise.co.uk

Just as I suspected. Thanks for clarifying the visa issue, which is your expertise.

Now -- back in my wheelhouse -- Economic ties in canada including a job, RRSP and a mutitude of other secondary ties does not make one a tax resident of canada if one clearly has their 'centre of vital interest" in another country which has a treaty with canada.

Cdn-source income would be taxable, either at domestic or treaty-defined rates, as a non-resident.


What needs to be cleared up, most by the employer, is what steps they need to take with Inland revenue and DWP to correctly pay and withhold tax on a worker living and working in UK, as well as determine Social security coverage. Will this person be considered a UK employee, or will this person be considered to have transferred temporarily to UK, and is this temporary transfer for a definite period of less than 5 years, or is it more open-ended?

But in any event, whether the person is paid by the Cdn firm directly, or if the person is paid thru some UK payroll entity (to satisfy Inland revenue and/or DWP requirements), they will in all cases be considered Cdn non-resident, and UK resident for tax purposes, from the day she laft canada with her spouse.

You should apply for a self assessment account with HMRC as you will need to file a UK tax return. It may also be necessary to set up a direct pay scheme with HMRC for remittance of national insurance contributions as you are a UK based employee working for a foreign employer with no establishment in the UK. If you will be in the UK short term, less than 5 years, you may be able to avoid UK national insurance by obtaining a Canadian certificate of coverage confirming you will continue to contribute to Canadian social security.

-- Sat Apr 30, 2011 1:15 pm --

I am a UK chartered accountant / chartered tax adviser and Canadian CGA practicing in the UK. My main area of practice is providing tax advice and compliance services to UK, US and Canadian expats. For further information on the services I offer please visit my website www.uknats.com