Wellington Accountant | SME's | Film Industry | Investment Property

FILM INDUSTRY ACCOUNTING

New Zealand has a thriving film industry. Cornish Accounting provides accounting and taxation services to film industry contractors. With our office in Lyall Bay, close to the heart of the Wellington film industry, we have a large client base of film contractors, who are both local and national clients.

Film Contractors – Schedular Income

In normal course, film contractors, will receive income with withholding tax deducted, i.e., schedular income. Effectively self-employed.

Withholding Tax Rate Options-
  • Standard schedular payment tax rate for your activity
  • Choose your own tax rate
  • Apply for a tailored tax rate
  • Apply for an exemption from schedular tax (if using a company structure)

You can choose the standard tax rate of 20% or pick your own rate, provided it is no less than 10%, or 15% if you have a temporary entry class visa. It is important to note that if you chose a tax rate too low for your circumstances, you may not pay enough towards your end of year tax obligation. This may result in having to pay further tax in a lump sum and be liable for provisional tax.

 

Links:

IRD Understanding schedular payments for contractors – Fact sheet

IRD tax rate estimation tool for contractors

GST

If you are expected to earn more than $60,000 a year then you are required to register for GST.

When registering for GST, you chose how often you lodge GST returns and which accounting basis. We recommend filing GST returns 6 monthly on a payment basis so you don’t have to prepare the returns too often.

 

Expenses you can claim:

  • Business use of home if you have space there used for business purposes. These expenses include mortgage interest, rates, rent, insurance, power, internet, phone repairs and maintenance
  • Mobile phone
  • Computer consumables as well as the depreciation on the computer
  • Stationery
  • Course Fees
  • Travel costs to the industry meeting(s) etc. Both domestic and international
  • Costs associated with the film / media industry e.g., movie tickets or subscriptions e.g., Netflix, Amazon, Disney, etc
  • Some entertainment costs
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Allowances and per diems

Accommodation allowances

You may receive an accommodation allowance to cover the cost of accommodation expenses you may have when you work away from home. Accommodation allowances are treated as part of your gross income and are generally subject to tax on schedular payments.

Per diems

Per diems are payments you receive to cover the cost of meals and other minor expenses you may have when you work away from home. They are part of your gross income and are subject to tax on schedular payments.

On 1 July 2018, the Inland Revenue updated an expenditure determination about people working in the screen production industry. This determination means you are able to receive up to $80 per day in per diem allowances without having schedular payment deducted. If you receive $80 or less in per diems a day, you won’t need to keep your invoices and receipts for income tax purposes.

If all your costs are met by the screen production company, there will be no allowable deductions.

If your expenses amount to more than the per diem payment received, and you want to claim a deduction for the amount in excess of the pre diem, you must keep receipts and invoices for all the expenses claimed that particular day.

ACC levies

As a contractor you are responsible for paying your own ACC levies. Refer to our ACC page for more details…