Tax Tips for Seasonal Businesses in Canada (Food Trucks, Pop-ups…)

Summer in Canada means bustling streets filled with food trucks, pop-up shops, market booths, and seasonal services like tourism, boat rentals, or sports equipment leasing.

If you own a seasonal business, managing your taxes accurately and efficiently will help you:

• Maximize profits

• Avoid the risk of CRA audits

• Keep your business compliant and sustainable

TikiTax has put together practical, easy-to-apply tax tips for seasonal businesses across Canada.

1. Choose the Right Business Structure

The way you register your business will directly impact your tax reporting requirements and the amount of tax you pay:

• Sole Proprietor – Report income and expenses on your T1 using Form T2125.

• Partnership – Share income and expenses between partners.

• Corporation – File a separate T2 corporate tax return; may offer better tax advantages.

💡 Tip: If you plan to operate seasonally every year, consider whether incorporating makes sense in terms of cost and tax benefits.

2. Keep Detailed Records and Classify Expenses Properly

Eligible business expenses can be deducted, such as:

• Raw materials, food, packaging

• Vehicle rentals, booth rentals, or temporary location fees

• Advertising, website, signage

• Staff uniforms

• Wages for seasonal employees

• Depreciation on assets (e.g., food truck, generator, kitchen equipment)

🎯 Pro Tip: Use simple accounting software (like Wave or QuickBooks) to track expenses clearly—this will save you trouble if CRA asks for proof.

3. Handle GST/HST Correctly

Even if you only operate for a few months, you must register and collect GST/HST if your revenue exceeds $30,000 within four consecutive quarters.

• Under $30,000 – Registration is optional, but you may lose the ability to claim Input Tax Credits (ITCs).

• If registered – File GST/HST returns regularly (quarterly or annually).

⚠️ Common Risk: Many seasonal business owners forget or file GST/HST late, resulting in penalties and interest from CRA.

4. Plan for Income Tax (Personal or Corporate)

Seasonal income can be high in a short time, but you still need to report for the full year:

• Estimate your taxes ahead of time and set aside a portion of profits so you’re not short when CRA comes calling.

• If you’re a sole proprietor, you can still contribute to RRSPs, use your TFSA, or split income if you have dependents.

🎯 TikiTax Tip: We can help you calculate projected taxes and plan instalment payments to avoid end-of-year penalties.

5. Deduct Start-Up Costs

If you’ve just launched (buying a food truck, equipment, branding), certain expenses incurred before you start selling can still be deductible.

💡 Tip: Keep all receipts and detailed records from before your official start date.

6. Understand Tax Obligations for Seasonal Staff

If you hire temporary workers:

• You must deduct CPP, EI, and income tax from wages.

• Issue T4 slips and remit withheld taxes on time.

• Paying cash without reporting is a serious tax violation.

🎯 Pro Tip: Even if you hire only 1–2 short-term staff, use a payroll service to ensure compliance.

7. You Still Have to File Taxes Even if You Close After the Season

Even if your business stops operating after the peak season, you must:

• File your year-end tax return

• Clearly report your active operating period

• Submit a nil return if registered but with no income

Failing to file can trigger CRA warning letters, late-filing penalties, or suspicion of tax evasion.

Conclusion: Getting Taxes Right from the Start Protects Your Profits

Seasonal businesses can generate big revenue in a short time, but poor tax management can eat away your earnings.

TikiTax.ca can help you:

• Set up a solid tax system for your seasonal business

• Plan expenses and forecast tax liabilities

• File on time and avoid CRA penalties

📞 Book your free consultation with our tax specialists today—you focus on growing your seasonal business, we’ll handle the taxes.