Do you need an accountant? (Spoiler Alert: Yes, You Do)
Let's say you won the filmmakers lottery, and earned a grant of one million dollars, no questions asked, to make your dream film. Here’s why your first move should always be to hire an accountant.
A disclaimer: I, nor Yearbook, nor Yearbook affiliates have any formal accounting experience. These experiences are all just what I’ve come to learn over the course of filing with the CRA. Please do yourself a favour, and consult with a registered accountant before making any assumptions about your own production taxes. And always have your own work double-checked!
GST Baby. On one short, we paid GST on every rental- cameras, lighting, trucks- and thought nothing of it. Months later, we realized we hadn’t filed properly to reclaim it. Thousands of dollars were just left on the table. But what are GST expenses, and how do you earn them back? For Canadian folks, when you register your production company for GST/HST, you’re essentially telling the government: “Hey, I’m running a business, and this business is making a film.” That registration allows you to claim back the GST/HST you pay on eligible expenses. So, things like equipment rentals, location fees, hotels, catering, even office supplies, all purcahsed with GST, are now eligible for you to claim the percentage back. Instead of just swallowing those taxes as sunk costs, you can file returns during production and recover them as input tax credits. It doesn’t feel like much when you’re paying $50 here or $200 there, but by the end of a shoot, it can easily be thousands. The trick is: you only get that money back if you’ve registered properly and your paperwork is airtight. Otherwise, you’re handing free money to the CRA.
Crew payroll is not like a restaurant or office gig. In film, you’re juggling multiple classifications at once, such as union crew members who need to be paid according to collective agreements (with fringes, health, and pension contributions), non-union employees who still require deductions like CPP, EI, and WCB, and then the occasional true independent contractor who invoices for their services. On one show, we tried to simplify things by treating everyone the same: some people were paid as contractors when legally they should have been on payroll. Others invoiced as though they were incorporated, but really weren’t. It all looked fine until tax season, when the CRA flagged the inconsistencies. Suddenly, we were looking at penalties, back-owed employer contributions, and a mountain of reclassification paperwork. What we thought was “streamlining” payroll ended up costing us weeks of cleanup and thousands of dollars in fees. For the average indie filmmaker, the easiest workaround is to avoid mixing your crews, and in a town like Vancouver, is easy enough.
Tax Credits. On another show I was on starting out, we assumed we’d receive the provincial production tax credit, only to find out our service company wasn’t set up properly, and we lost eligibility for a big chunk of financing. But at the time, the real error was in us not understanding how tax credits properly worked. Tax credits are government rebate incentives designed to attract productions and stimulate local economies. Instead of handing you money upfront, the government lets you claim back a percentage of your eligible production costs once the project is complete and you’ve filed all the proper paperwork. That’s why it’s super important to understand your eligibility up front, to ensure you arent banking on finances you won’t end up receiving.
Per Diems and Taxable Benefits. We handed out cash envelopes for per diems on an out-of-town shoot, thinking we were organized. Turns out, CRA considers untracked per diems taxable benefits. It was a headache for everyone at tax time. The CRA considers untracked per diems a taxable benefit unless they’re documented properly. Because we didn’t record who received what, or tie those payments to contracts and payroll records, they were technically seen as “extra income” that hadn’t been taxed. That meant backtracking, issuing revised T4As, and crew members getting surprise taxable income on their returns.
-and it didn’t happen unless there’s a receipt. One of the fastest ways productions bleed money is through the little things. On one shoot, our production coordinator was swamped, and crew kept fronting small purchases without bringing back receipts. By wrap, we had thousands in cash out the door that couldn’t be reconciled. To the CRA, no receipt means no expense, and you can’t claim it back as a business deduction, and it definitely won’t count toward tax credits. We ended up eating those costs, which added up to almost an entire shooting day’s budget.
