Mike's first point, to talk to a chartered accountant, is crucial. You might also consider the option of forming a UK limited company (it only takes a day or so to set one up and there are specialist companies that do this; it helps to use an accountant who has done this already/had it done). This avoids the employee/contractor question that Mike adduced. However, you then have to arrange an hourly or daily fee with your Canadian client (as they would be) and bill them for actual hours worked (and they may or may not be OK with that; if they are not OK with it, then you will have to think hard about why that may be). The accountant will help you get the sums right. You can't really do it by yourself ab initio.  

I don't see the exchange rate as a problem: you agree with them to bill in GBP and that is what they give your company (there are of course transaction fees, which will have to be acknowledged and agreed). 

The UK limited company sounds like a plan, but now I starting to think that since they don't want this hassle of setting up a UK business, that it has now fallen to me. I am now taking this hit, perhaps I should be pushing back on them to do this. Although if I do set up the UK limited company I guess it gives me scope to do other things and perhaps to employ people and so on. Thanks for this advice. Now I need to do some sole searching into what I really want to do and what do i really want to take on.

The UK limited company sounds like a plan, but now I starting to think that since they don't want this hassle of setting up a UK business, that it has now fallen to me. I am now taking this hit, perhaps I should be pushing back on them to do this. Although if I do set up the UK limited company I guess it gives me scope to do other things and perhaps to employ people and so on. Thanks for this advice. Now I need to do some sole searching into what I really want to do and what do i really want to take on.

Once you know what is going on, keeping the company going is not a huge amount of work if it remains small (1-3 people). I have both England&Wales and German limited companies. The E&W is easy. The German one with two employees, by contrast, is serious hassle.

Agree with Peter, - a surprising number of UK companies exist that are one person at a residential address, that seem to own one desk and one car ,and submit half a side of A4 to companies house each year shewing profits or losses so small as to not trouble the scorers.

Again any accountant who specializes  in contracting companies will be on the ball with the pros and cons of various approaches and any recent changes to regulations. I have been told the UK  is a lot easier than a Canadian or US company registration, though personally I do not know.

(some of the cheap options are so cheap you have to wonder quite what is missing ... )

Mike

My feeling is now very much that if they're so keen to have me than they can go through this rather than me. If I wanted to contract or run my own company I'd probably be doing it by now. But I'd rather be simply employed.. With your information I think I have an answer to whether I want to take this opportunity.. Thanks.