Read more about the article Your Employer Annual Declaration is Due by 31 May
May 31 written on a calendar to remind you an important appointment.
Tax

Your Employer Annual Declaration is Due by 31 May

“Failure by an employer to comply with its obligations does not only harm that employer and the fiscus, but also employees. SARS vigorously pursues employers that fail to comply.” (SARS) Employers must submit their annual reconciliation declarations (EMP501) with accurate and up-to-date payroll information about their employees by 31 May this year. This is among the requirements imposed on employers by the Fourth Schedule to the Income Tax Act: deducting or withholding employees’ tax from remuneration, paying the above to SARS monthly before the 7th of the following month, reconciling employees’ tax during the annual and the interim reconciliation, and issuing tax certificates (IRP5s/IT3(a)s) to employees timeously. A SARS focus area The employer-reconciliation process is a focus area for SARS, not only to ensure compliance among employers, but also because it enables SARS to issue individuals with income tax auto-assessments. SARS uses the IRP5/IT3(a) certificate information submitted by employers through the annual reconciliation process to prepopulate the employees’ annual income tax returns (ITR12), and employees cannot change this information. This means the employer-reconciliation process is also a key phase in the Income Tax Filing Season, because incomplete or incorrect information will make it difficult for employees to fulfil their tax obligations and because employees require IRP5 and IT3 certificates to file their income tax returns in time during tax season. As such, SARS says it vigorously pursues employers that fail to comply and, where necessary, aims to make tax non-compliance hard and costly through hard enforcement, for example, court action, asset seizure and criminal prosecution. What needs to be done? Register employees who are not registered for income tax. Review the year’s EMP201 declarations that declare the total tax liability for each tax period for: Employees’ Pay-As-You-Earn (PAYE) tax, Unemployment Insurance Fund contributions (UIF), Skills Development Levy (SDL) Employment Tax Incentive (ETI) amounts (if applicable). Submit any outstanding monthly declarations (EMP201) and settle all payments due to avoid administrative penalties for non-compliance or late submission, and to reduce interest charges on delayed or outstanding amounts. Ensure the values on the EMP201 declarations and on the tax certificates balance to the actual payments made to SARS. If any discrepancies are identified in the EMP201 declarations, these must be corrected when submitting the EMP501. The EMP501 Annual Reconciliation Declarations must include: Monthly employer declarations (EMP201). Information about payments made (excluding penalties and interest paid). Employee tax certificates (IRP5/IT3(a) generated) covering the tax year from 1 March 2023 to 29 February 2024. Monitor the status of your submission to ensure the EMP501 has been successfully filed with SARS – a submission rejected as incomplete or due to a data error is considered not to have been submitted, and the taxpayer will be liable for non-compliance penalties. Keep accessible employer records with a register that contains each employee’s personal details and financial records as prescribed by the Commissioner for at least five years. Also complete the interim reconciliation process in September/October each year to enable an easier and more accurate annual reconciliation submission and an up-to-date…

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April 26, 2024
Read more about the article How and When to Save a Struggling Start-Up
Business / Business Rescue

How and When to Save a Struggling Start-Up

“Failure is simply the opportunity to begin again, this time more intelligently.”- (Henry Ford, founder of Ford Motor Company) Data from StatsSA has shown that more than 1,500 businesses closed their doors for good in South Africa last year. This can come as no surprise to anyone who conducts business in South Africa at the moment, with spiralling costs, high interest rates and other tough market conditions that include frequent load shedding at short notice. It is therefore highly likely that all business leaders will go through tough times and for those with start-ups they can often seem insurmountable. If your start-up is one of those failing businesses the first thing you need to do is determine if the company is worth the extra energy, investment and effort required to save it, and if the answer is yes, then take our steps below to ensure that happens. Save or close? The first step to deciding whether to save a company is to work out the root cause of the troubles. Often this will take a team of outsiders, but a conversation with us as your accountants should be the first step. We can help you quickly assess whether your troubles come from external issues such as competition, market conditions or new regulations, or whether they are from internal issues such as poor management, a high level of debt, bad hires or inadequate equipment. Next you need to be brutally honest with yourself. What was it that made you enter the market? What made you unique? Are these things still true? Is your product obsolete? And is your business still capable of turning a profit? Assuming you believe profit is still achievable, then the next step is a full evaluation of the finances, from assets to debits and invoices outstanding, so you can find out just how bad things are. From there, we can help you work out the costs of necessary adjustments. Do you need restructuring? New equipment? Or new staff? What will it cost to fix, and do you have the ability to go through the necessary changes? You will need to carefully consider all these steps. You have invested a lot of effort and emotion into this company, and making these decisions rationally can therefore be hard. Having brought advisors onboard, you now need to actually listen to what they have to say. If you have completed all the steps before this and still want to go on, then ask yourself one final question. Are there alternatives? Is there anyone who would buy the company? A competitor who might consider a merger? And why would one of these options not be better than you keeping things going? It is important to consider all of these options, so that when you commit you know you are on the right path. If, after all of this, you are still determined to save the business, here is what you need to do: Rank your challenges Being in a start-up can be overwhelming.…

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April 26, 2024
Read more about the article Beneficial Ownership Registers – Now Mandatory with CIPC Annual Returns
Company / Corporate / Compliance

Beneficial Ownership Registers – Now Mandatory with CIPC Annual Returns

“It is imperative that ALL companies and close corporations ensure compliance with the beneficial ownership filing requirements, to ensure good corporate governance and business continuity.” (CIPC) Following changes to the Companies Act on 24 May 2023, company directors and members of close corporations are obliged to lodge and maintain a detailed Beneficial Ownership (BO) Register, along with a list of supporting documents with the CIPC (Companies and Intellectual Property Commission). This register and documents must also be kept up to date within tight timelines and verified annually. Pre-existing companies with their anniversary date after the promulgation of the amended Companies Regulations were required to file their beneficial ownership information with their annual returns. Registers for new companies and amendments must be lodged within 10 days. This means that all entities in CIPC’s register must have filed their beneficial ownership information by 24 May 2024 – one year since it became mandatory. The Commission, citing a huge number of non-compliant entities that are yet to file their beneficial ownership and/or securities register information, is enforcing compliance by implementing more serious consequences. Consequences of non-compliance   A new “hard-stop functionality” has been implemented by the Commission. That will prevent any non-compliant entities from filing their annual returns, which brings its own consequences. The late filing of annual returns will incur penalties. Banks, service providers or customers often require businesses to have up-to-date annual returns before engaging in business. The Commission will take further and necessary enforcement actions with regards to entities which continue to be non-compliant, such as: investigation into the administration and governance processes of non-compliant business, issuing of compliance notices; and/or referral for deregistration and even final deregistration due to non-compliance. It is also a criminal offence to submit false or incorrect information to the CIPC. What is required for compliance?  Identify the beneficial owners of a company – these are individuals/natural persons who, directly or indirectly, ultimately own 5% or more of the company, or exercise effective control of that particular company. For each beneficial owner identified, collect the following: full names, date of birth, correctly certified copy of ID or passport; business or residential and postal address; email address; confirmation as to the participation and extent of the beneficial interest; supporting documents. Collate the information in a register, which must be filed with CIPC, and upload the supporting documents to CIPC’s website. Keep the register up to date, with changes filed with CIPC as soon as practically possible, but no later than 10 business days after notification. An updated register must also be submitted with the annual returns each year. The information must be treated as confidential and adequate precautions must be taken to prevent theft, loss, damage, destruction and falsification. Top tip for hassle-free compliance Our assistance will prove invaluable in ensuring your business remains compliant with both CIPC’s beneficial ownership requirements and annual return requirements, particularly following the hacking of the CIPC website and the problems and delays that followed. We can also guide you through the complexities of CIPC…

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April 26, 2024
Read more about the article Five Things You Need to do After the CIPC Hack
May 31 written on a calendar to remind you an important appointment.
Business / General Interest

Five Things You Need to do After the CIPC Hack

“The Internet is a worldwide platform for sharing information. It is a community of common interests. No country is immune to such global challenges as cybercrime, hacking, and invasion of privacy” – (Lu Wei, the head of the General Office of the Central Leading Group for Internet Security and Informatization from August 2013 to June 2016) On the 1st of March 2024, the CIPC admitted it had been hacked. The CIPC said in a statement that, “Our ICT technicians were alerted, due to extensive firewall and data protection systems in place at the CIPC, to a possible security compromise and as a result, certain CIPC systems were shut down immediately to mitigate any possible damage.” While they referred to the incident as “an attempt” to hack their systems they also added, “Unfortunately, certain personal information of our clients and CIPC employees was unlawfully accessed and exposed.” A few days later MyBroadband.co.za said they had been contacted by the hackers who allegedly proved they had access to the site since 2021 and the CIPC could be understating the damage done. Whether the claims made to MyBroadband are accurate or not, the possibility this hack has leaked private information from many or all of South Africa’s registered businesses and presumably given outside access to company registrations which potentially allows the hackers to make alterations to core business areas. Together with a long-standing issue at SARS that periodically sees clients receiving an email or SMS stating, “unauthorised changes were made to your personal details on eFiling”, it is clear that South African businesses need to be aware of the risks of online attacks at key government organisations and more importantly, know what to do about them. These are the main concerns: Private information leaked According to reports, the hackers may have gained access to the private credit card information used to make payments to the CIPC. MyBroadband quotes the alleged hackers as saying the CIPC was “processing and storing credit cards in the clear.” While most banks require access to an app as verification, the exposure of CVVs and expiry dates of cards is a risky proposition. When combined with other information stored on the site, such as the names, addresses and signatures of directors there is a real risk that company clients and contacts may be open to being scammed through fake profiles or other contacts generated by malicious third parties. Access to Company registrations If, as is alleged, hackers have gained unfettered access to the company registrations section and the login details for multiple clients, companies risk potential changes in their core information. Directors can be changed, addresses altered and critically, key documentation can be downloaded. The latter is of great concern as these documents could allow a fraudster to open bank accounts in a company’s name. After that it becomes simple to contact clients saying that bank account details have changed, and even offer them the proof that they are speaking to legitimate company representatives. From there money could easily…

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April 26, 2024
Read more about the article Your Tax Deadlines for May 2024
Tax

Your Tax Deadlines for May 2024

07 May – PAYE submissions and payments 24 May– Value-Added Tax (VAT) manual submissions and payments 30 May – Excise duty payments 31 May – VAT electronic submissions and payments, & Corporate Income Tax (CIT) Provisional Tax payments where applicable. Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice. © CA(SA)DotNews

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April 26, 2024

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