Which country to pay tax?

[pjb71]

Hi there,
I am a UK citizen, and have been working in Canada (BC) on a temporary working visa which has 2 years remaining.
My circumstances are such that I have to return to the UK for 6-12 months, but my employer in Canada is allowing me to work from the UK for that period.
What I need to ascertain is if it's (a) Legal, and (b) less costly, to continue getting my salary paid in my Canadian bank account and therefore taxed in Canada, or to get paid and taxed in the UK. The complication is that there is no registered office in the UK for my employer.
Would I also need to register myself as a self employed individual and pay tax that way? I read other forum posts with similar suggestions, but my circumstances are slightly different.

Thanks in advance,
Paul.

[RMC]

Presumably before your recent return to the UK you worked full-time in Canada for at least one full tax year (to 5th April), qualified to be treated as not resident from departure from the UK and only Canadian deductions were made from your salary. Canadian deductions should end on your return, and you should register with HMRC for the Direct Payment Scheme – for details see:-
http://www.hmrc.gov.uk/nic/work/embassy.htm

[pjb71]

Thanks RMC.
I originally left the UK for Canada in July 2010, and will return this month, so does that fit with your "one full tax year" ? I'm reading that as 'no'.
But if I read this correctly, I will still pay Canadian taxes on my salary, but on top of that I register with HMRC and pay national insurance manually in the UK ?
I don't get re-taxed on my income ?
Please can you clarify?

Paul

[RMC]

Assuming that before your arrival in Canada you were resident and ordinarily resident in the UK and your employer is aware of this, all Canadian deductions should stop when you start working in the UK.

When declaring your income on UK tax returns (will need to complete 2010/11 as well as 2011/12), you can claim relief for Canadian tax deductions, so you will not be taxed twice.

By the way the situation would be very different if you were a Canadian resident with a UK passport.