One seldom associates the glitzy world of entertainment with something as boring as accounting and audits. But, it wouldn’t be wrong to say that financial services are the backbone of production companies and studios and for producers, directors, artists, and technicians who operate within the multi-billion pound entertainment industry.
For any production company, production accounting management is important – extremely important.
An accountant is a person employed to keep and convey financial records in any professional sector. And while that description may seem straightforward, it indicates a wide range of responsibilities, from simple bookkeeping for small businesses to auditing large firms.
In other words, the term “accountant” is used to represent a variety of closely focused, extremely particular tasks. The phrase “production accountant” is equally applicable to these situations, but it stands out from the crowd in that production accountants work on actual productions. Simply put, a production accountant is a specialist who oversees and controls the financial operations supporting each stage of bringing a production to reality.
This may be news to you, but the UK is no longer an EU member. This means workers who are not citizens of the EU, EEA, or Switzerland will come under the category of Skilled Workers as of October 11, 2021. Workers in the film industry may be considered Creative Workers, a class of Skilled Workers.
There are three primary working agreements in the UK. The PACT/BECTU Major Motion Picture Agreement (2021), the PACT/BECTU TV Drama Agreement (2017) & Guide (2019), and the PACT/BECTU Construction Crew Agreement (2020)
The purpose of these agreements is to formalize the hours worked and wages received by employees in the entertainment industry. The union’s primary goal is to ensure that its member is paid for every hour worked, as per BECTU guidelines
Suppose a worker (sometimes referred to as a contractor) offers their services to the customer through their limited business or another intermediary. In that case, the off-payroll working regulations may be applicable. The regulations ensure that contractors pay about the same income tax and national insurance payments as employees, even if they wouldn’t have been considered employees if they were offering their services directly to the customer. These regulations are sometimes referred to as “IR35.”
The organization that uses a contractor’s services is known as the client. They may also be referred to as the end client, engager, or hirer. If the regulations apply, fees must be reduced by Income Tax and employee National Insurance payments before being paid to HMRC. Employer National Insurance payments and apprenticeships are also included.
The new IR35 rules were implemented on 06 April 2021 and apply to all public sector businesses as well as medium or large-sized private businesses that become responsible for deciding the employment status of their workers. HMRC has provided specific criteria to be met for the roles, which will typically be treated as self-employed for the creative industry on their scheduled off-payroll working regulations. This has been created to protect workers’ rights and reduce tax avoidance.
A series of eight Corporation Tax reliefs known as the “Creative Industry Tax Reliefs” enables enterprises who qualify to enhance the amount of allowed spending. This may lower the corporation tax that the business must pay. If your business experiences a loss, you can turn some or all of it into a payable tax credit by surrendering the loss. The tax relief is a state aid that has been designated for the following;
To be eligible for tax relief on a movie production, the movie must be certified as British by The British Film Institute. Also, the production house has to be responsible for all aspects of the film, including the primary photography during pre-production and after-production delivery of the finished movie.
You can make an extra deduction to lower your earnings or enhance a loss. Your obligation to pay Corporation Tax will be lessened due to this. If you experience a loss, you may be entitled to relinquish all or a portion of that loss in exchange for a 25% payable tax credit. Of course, claiming tax relief for a movie will be a lot easier if you hire the expertise of a professional production accounting company.
All movies, TV shows, and video games must be recognised as British to be eligible for tax breaks for the creative industries. They must either meet the requirements of an international co-production pact or pass a cultural test. HMRC’s criteria for eligibility for tax relief are clear.
Although film and television production accounting requires the same “Accounting 101” skill sets, it would be false to imply that there are no variations between them. The timetable is the most obvious way they differ from one another.
Jobs as a film production accountant might range from a few weeks to several years, but they are all focused on a particular project with defined beginnings and ends. In contrast, television accounting must deal with a single project split into several episodes since pre-production, production, and post-production activities all take place simultaneously.
Accountancy in Europe is a well-established, professional accountancy firm established in 2011. The boutique firm offers a personalised accounting service that caters to all production accounting requirements during live productions such as Accounts Payable (AP) using Global Vista, PSL, PSM, Money Penny, Purchase Order using EasyPO or DPO systems, pension enrolment, registration and reclaims on VAT, Tax credit reclaims, production asset coordination using Sync On Set, cost reporting, support with Wrap.
Accountancy in Europe also provides reliable post-production accounting services such as close-off AP ledgers, supplier statement reconciliation, accounts for post-production costs, close of petty cash and float accounting, final bank reconciliation, payroll, pension, VAT, tax credits reclaim, final cost reporting, etc.
Accountancy in Europe doesn’t just provide production accounts but works with companies and individuals across many business sectors specific to their requirements.
If the Money Laundering Regulations apply to an accounting business, a supervisory body must monitor its operation under the law. The exchange of illegally obtained funds or assets for “clean” funds or other assets is known as money laundering.
While there is no apparent connection between clean money or assets and any illicit behaviour, regardless of how it was obtained, financing for terrorism is likewise included in the definition of money laundering. Accountants, financial service companies, estate agents, and solicitors are just a few of the industry areas to which these requirements apply.
A supervisory authority is required to oversee any business subject to the requirements. According to the regulations, a firm cannot operate without first registering with HMRC. Trading without a registered account is illegal. It may lead to acceptable or legal action.
The government implemented anti-money-laundering regulations in 2007.
Accountancy In Europe.com Ltd is registered (Reg. Number: XWML00000114895) for Anti-Money Laundering supervision by HMRC.
2018 saw the implementation of the General Data Protection Regulation (GDPR), a European Union (EU) legislation that governs data protection and privacy for all EU citizens. GDPR also covers the export of personal data beyond the EU.
Accountancy In Europe.com Ltd is registered with the UK’s Information Commissioner’s Office (Reg. Number ZA212852).
Filmmaking is a challenging process that calls for many moving pieces to come together swiftly and then separate just as quickly. A production accountant ensures that everyone complies with the law, that wages are paid on time, and that the production doesn’t break the bank. Every crew would benefit from having one; thus, in an ideal world, every production would have one.
A production accountant will work closely with the producer, line producer, and production manager, and because a production accountant is responsible for payroll administration, technically with every crew member on a production.
Accountancy in Europe,
Our ethos is to provide a fully inclusive package of services that are tailor made to the needs of each company or individual client.
Accountancy in Europe Copyright © 2022.