# Getting paid in £ by UK employer



## alnicol (Jan 26, 2009)

I'm thinking of moving to Canada in the next year or so but am likely to keep working for my current UK employer (it's software support, so from their point of view they love the cover the can provide while the UK is sleeping!).

I just wondered if anyone else is doing this and what problems it presents? My partner will be the one who Canada wants (she is a GP) whereas I'll just get in as 'cohabiting partner' status. The company is only based in the UK, so I'll effectively be UK employed but based in Canada.

From what I can tell, I'll pay Canadian tax (which seems to work in my favour) but equally I'll be at the mercy of the exchange rate (since I'll still be paid in pounds sterling). This currently means my salary will be slightly down against the average for my field, but if it returns to $2 to the pound, all will be good again.

Any gotchas or advice on things to watch out for? I'm particularly interested in how I'll ever get finance (for cars, loans etc) if I don't have a Canadian employer ... are they more/less strict than the UK when it comes to this sort of thing?

Thanks!


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## kaz101 (Nov 29, 2007)

I'm was doing a similar thing in Australia (although I was a contractor and not an employee) and I had a GBP account set up at a local Aussie bank so I got paid in GBP and it stayed in GBP until the exchange rate was in my favour and then I would transfer to the AUD account. You may be able to do a similar thing in Canada. 

Regards,
Karen


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## Bevdeforges (Nov 16, 2007)

You'll be liable for Canadian taxes (due to your residence) and all Canadian "withholdings" (social insurances). You should check with the Canadian tax authorities to see how an independent contractor (which is what I suspect you'll be considered) has to register and pay tax and social insurances on income from abroad.

It's possible that your tax rates in Canada for the social insurances will be somewhat higher than if you were working for a Canadian company, since your UK "employer" (considered your customer/client) won't be kicking in their share.

Since you won't be an "employee" for the UK company, you may also have to set up some nominal company structure in Canada and invoice the UK company for your pay. 

I'll warn you that, in North America when folks go out on their own as "contractors" rather than employees, they generally require a higher fee for their services in order to cover expenses (which the "employer" no longer covers). You get to deduct these expenses from your gross take for taxes. I would also check the Canadian GST regulations for small businesses, to see if "services" also have to bill and pay GST (Canadian equivalent of VAT).

Rule of thumb in the US used to be that contractor fees needed to be as much as 2x the prior salary level to remain even. Though that may have changed over the years.
Cheers,
Bev


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## louiseg (Nov 17, 2007)

from credit rating perspective you can get an international credit rating from Equifax for mortgage purposes. Once you establish a history with a bank account, credit cards, paying bills on time etc you should be OK for bank loans lines of credit etc.


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## KingdomLeaf (Apr 4, 2010)

Hi There, I thinking of doing the same thing. I'm currently working as a contractor in Ireland, but all of my income is derived in the UK. I am a sole trader for tax purposes and do not have to charge VAT because I provide 4th scheduled services (consultancy). I now pay less tax than I did as a PAYE worker in the UK, but without the pension and healthcare coverage, which were poor to begin with. I am thinking of moving to Canada and continuing in the same line of business. I'm interested in whether I will have to charge GST on my invoices for a financial consultancy, if anyone knows?
On the currency cross rates front, you'll often find that banks are good with up front charges but turn around and nail you with the spread. I've found CurrencyFair to be excellent on the spread. You will need to have an account in both countries to make it work though.


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