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jb_1
Level 1
posted
‎April 21, 2021 12:18 PM
last updated ‎April 21, 2021 12:18 PM

Canadian working in the UK and paying taxes there and Covid preventing her to come back at this point

Does a Canadian working in the UK and paying taxes there, need to file a tax return here in Canada? I understand that she needs to inform CRA of her status by going to work in the UK, but with COVID she could not return to Canada by December 2020. So she kept her position in the meantime for 2021 and until Covid travel restrictions are lifted. What and how to report her income in a T1. I have her forms of UK work, I know to convert the currency but how and where are the deductions she paid in the UK entered? I would suspect that my client would need to file a return in the UK since taxes were withheld there.

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Best answer April 22, 2021
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janisbossenberry
Level 7
‎April 22, 2021 09:54 AM

Canadian working in the UK and paying taxes there and Covid preventing her to come back at this point

She will still be considered a Canadian resident (and a Canadian taxpayer) since she has not make a "clean break" from Canada.  Her move is only temporary.  She does have to file a Canadian T1 reporting her world-wide income.  Taxes paid on that income in the UK are claimable as a foreign tax credit.  Other deductions from employment are not usually claimable. You have to watch the time period - I believe the UK reports on a non-calendar year for employment income.  She likely does not have to file a UK return as over there you usually only file a return if there were not source deductions.  However, you do need to check the tax treaty to be sure.

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janisbossenberry
Level 7
‎April 22, 2021 09:54 AM

Canadian working in the UK and paying taxes there and Covid preventing her to come back at this point

She will still be considered a Canadian resident (and a Canadian taxpayer) since she has not make a "clean break" from Canada.  Her move is only temporary.  She does have to file a Canadian T1 reporting her world-wide income.  Taxes paid on that income in the UK are claimable as a foreign tax credit.  Other deductions from employment are not usually claimable. You have to watch the time period - I believe the UK reports on a non-calendar year for employment income.  She likely does not have to file a UK return as over there you usually only file a return if there were not source deductions.  However, you do need to check the tax treaty to be sure.

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jb_1
Level 1
‎April 22, 2021 10:59 AM

Canadian working in the UK and paying taxes there and Covid preventing her to come back at this point

Thank you for your advise, it was much appreciated.

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