I’m finding a lot of conflicting information regarding previous earnings and was hoping someone can help. I’ve been reading this form for a while but this is my first post.
I’m planning on applying for Tier 1 (General) and proving my earnings as a contractor since everything I make goes into my personal account and isn’t retained within the business.
My earnings period will be January to December 2008.
The first 10 months my salary was paid into a UK bank account in GBP. The last two months were paid into a Canadian bank account in CAD.
Because I’m a contractor I have some minor expenses that I pay to run a home office.
I was planning on submitting:
a)Bank statements showing deposits into accounts.
b)Statement my accountant has prepared showing my gross and net earnings in GBP. For the last two months where I was paid in CAD he used the oanda currency rates for November 31st and December 31st. For the expenses (paid in CAD) as they happened throughout the year he used the average rate for the entire year. My gross earnings thus exactly match my bank statements but of course my net earnings do not.
c) Canada revenue assessment statement for 2008 tax year. This is a form provided by the government after filing my tax return showing my total income after my expense. This number is in CAD so I have to show a little work on how it matches the net income on the accountants statement in GBP.
d) Letter from my client who I contracted for detailing all payments made in the 12 month period.
e) Two contracts covering our arrangement including payment details.
f) Invoices signed and stamped by client.
Problems I’m having:
1. I invoiced my client for December on December 27th but was not paid till January 2nd, 2009. Will this be a problem? I’d adjust my earnings period but then the tax assessment wouldn’t make much sense as it only covers 2008. This December amount was accounted for as income in 2008 since that’s when it was earned.
2. My assessment form shows total income (this is the amount after all my expenses) but then has a line called net income which to the Canadian government is the amount of income that is taxable. This is $2000 less as I made pension contributions and they consider that an expense and allow you to effectively lower your income so you won’t be taxed as much. Will this cause problems? Should I explain this in the cover letter?
3. The accountant’s statements has one page on letter headed paper and the rest are not. He seems to think this won’t be an issue, should I ask him to sign and stamp each page?
Anything else I’m missing? Anyone who has experience applying as a contractor have any pointers?
Thanks so much for you time.
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