Read more about the article Are You Ready for the Next Provisional Tax Deadline?
Tax

Are You Ready for the Next Provisional Tax Deadline?

“Death, taxes, and childbirth! There’s never any convenient time for any of them.” (Margaret Mitchell)

What is provisional tax?

Provisional tax allows corporate and individual provisional taxpayers to pay their annual income tax in advance by making two or three payments during a tax year.

The aim is to prevent taxpayers from facing large income tax liabilities that are only revealed at the end of the year of assessment, when the annual personal income tax (PIT) return ITR12 or the annual corporate income tax (CIT) return ITR14 is filed in January.

While provisional tax payments can assist taxpayers by spreading their income tax liability over the tax year, they also create additional administrative obligations such as completing and submitting a provisional tax return (IRP 6) on time, twice or thrice a year. What’s more, they increase the risk of penalties, most notably under-estimation penalties.

Luckily you have us in your corner.

Are you a provisional taxpayer?

Companies are automatically provisional taxpayers. Individuals who receive income other than a salary may also be provisional taxpayers, depending on various criteria. Because SARS places the onus on you to determine if you are liable for provisional tax, it’s best to check your provisional tax status with us.

The 3 provisional tax payments

The first compulsory provisional tax payment is due within six months of the start of the year of assessment. So, if your or the company’s 2025 tax year commenced on 1 March 2024, the first provisional tax payment was due on 31 August last year.

This forward-looking payment is based on half of the total estimated tax for the full year, less employees’ tax already paid and any applicable tax credits and rebates. 

The upcoming second compulsory provisional tax payment deadline is the last working day of the year of assessment (on 28 February if your tax year started on 1 March). It works somewhat differently, and the rules are far stricter – with harsh penalties for under-estimating taxable income for the year.

A third optional payment can be made after the end of the tax year, but before the issuing of the annual income tax assessment by SARS each year.

Crunch time!

The provisional return for the second period to 28 February is retrospective and based on the total estimated tax for the full tax year (less the first period provisional tax and employees’ tax already paid, and any applicable tax credits and rebates).

The second estimate must be quite accurate as heavy under-estimation penalties apply.

  • Where the taxable income is less than R1 million; and the second period estimate is less than 90% of the actual taxable income and less than the ‘basic amount’ (taxable income assessed for latest preceding year of assessment), a 20% penalty is imposed on the difference between the employees’ and provisional tax already paid and the lesser of normal tax on 90% of the actual taxable income or normal tax on the basic amount, after deductible rebates.
  • Where the taxable income is more than R1 million; and the second period estimate is less than 80% of the actual taxable income, a 20% penalty is imposed on the difference between the employees’ and provisional tax already paid and the normal tax on 80% of actual taxable income after deductible rebates.  

Bear in mind that SARS can ask for your estimate to be justified, so you will need accurate records of all the source documents and calculations used to determine your estimate. Even so, SARS can increase the estimate if they are dissatisfied with your amount, and this is not subject to an objection or appeal.

To avoid this, SARS provides the following advice: “the amount of the estimate must be determined sensibly and by careful reasoning and judgment, in a mathematical manner, and using experience, common sense and all available information”. 

We can ensure this holds true for your provisional tax, be it corporate or individual.

Further penalties to watch out for…
  • Even if you or your company owes no tax, a ‘nil’ return showing taxable income as equal to zero must still be filed timeously. Failing to do so will attract administrative penalties.
  • If an IRP6 is filed more than four months after the deadline, SARS will consider a ‘nil’ return to have been submitted. Unless the actual taxable income really was zero, an under-estimation penalty will also apply to a late submission. 
  • Not making your provisional tax payments on time will also result in an immediate late payment penalty, calculated at 10% of the provisional tax amount, regardless of whether it’s not paid at all or simply paid late.   
  • Interest will also be levied on the underpayment of provisional tax because of under estimation, and on late payments.
Rely on our expertise 

The rules of provisional tax are daunting and confusing, and yet SARS holds provisional taxpayers responsible for their tax affairs. That’s why it makes sense to allow the experts to prepare and/or review your provisional tax and income tax returns prior to submission.

We will proactively take care of all the necessary steps to correctly calculate the estimated taxable income for the year of assessment, and to submit timeously, ultimately saving you time, money and hassle. 

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 us for specific and detailed advice.

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January 29, 2025
Read more about the article Building a Business: Should You Bring in Funders or Go it Alone?
Group of business people assembling jigsaw puzzle and represent team support and help concept
Business

Building a Business: Should You Bring in Funders or Go it Alone?

“As an entrepreneur, one of the biggest challenges you will face will be building your brand. The ultimate goal is to set your company and your brand apart from the crowd.” (Ryan Holmes, Founder and CEO of Hootsuite)

Trying to get a business off the ground is challenging. Every step of the process requires a mountain of time and investment. Choosing between going it alone or involving others as partners or investors is a decision that should not be taken lightly. In this article we’ll break down the options available and take a look at the pros and cons of each.

1. Going it alone

Self-funding, also known as bootstrapping, is when a business owner goes it alone, providing all funding, time and energy themselves.

Pros of bootstrapping

Whether you’re finding the money from savings, or your monthly pay cheque at another job, bootstrapping is perfect for the entrepreneur who wants full control over their business. With no partners on board, all decisions are yours to make, and all the profits, achievements, and losses are yours alone.

Apart from the independence it offers, bootstrapping can also be easier. There’s no time spent filling in application forms or putting together pitch decks to impress would-be investors. There is also no accrued interest on the debt involved and no loss of equity in your own business. This makes running the business far simpler.

Cons of bootstrapping

On the downside, bootstrapping can be much slower. Each cent spent on the business needs to come from your own pocket and so necessary investments need to be prioritised from month-to-month. Things that are essential for success may need to wait another month – and this can mean your break-even point takes longer to arrive.

Bootstrapping also increases your chances of failure, as some expenses simply can’t wait if you want to make money. Bootstrappers are also more likely to become frustrated with the slow pace and give up.   

2. Tapping into venture capital

Venture capital (VC) is one of the most popular routes for finding funding in entrepreneurship. This is where a company or an individual provides funding to your business in exchange for a percentage of ownership.

Pros of VC

Venture capitalists are able to offer significant investment in the company and can often provide all the funding necessary to take the company from start-up to established business. What’s more, venture capitalists likely come with significant experience in business and a strong network of contacts.

Cons of VC

Working with venture capitalists requires that you give up some control of your business. This new partnership can create friction if the person who pays the bills doesn’t share your ideas of where the company should be headed. In some instances, their investment may even give them a majority stake and the dream you had of being your own boss might now be a thing of the past.

3. Touched by an angel (investor)

Angel investors are also happy to provide the financing necessary for your business to thrive. Unlike VC, however, they are typically looking to take a more background role and are hoping to cash in when your company has become established. 

Pros of angel investors

Angel investors generally offer more flexibility than VC. They aren’t looking to get involved – they’re looking for business owners and ideas that stand a good chance of succeeding without their intervention. This means they’ll often provide funding to businesses others may not touch.

Cons of angel investors

Angel investors are looking for part ownership of the business and you should therefore expect to lose some of the equity in your company. Because they’re investing without getting involved, angel investors know they may lose their money. This means they are generally unwilling to invest as much time or money as a venture capitalist might, so you should expect to still do some of the bootstrapping yourself.

Remember that angel investors are interested in one day getting a big payoff. They are looking for that moment when the company can be sold or listed on a stock exchange. This means they may pressurise you to make decisions that aren’t necessarily in the company’s best interests.

4. Borrowing from the bank

An old-fashioned bank loan is another way of bringing money into a business. 

Pros of bank loans

Taking out a bank loan gives you the money you need to grow the business. You also do not lose any equity in your company.

Cons of banks loans

The interest on a loan can be problematic and over time may add up to a significant amount – often the cost of debt is much higher than the cost of giving away equity to investors. If the company fails, you may still be required to pay off the loan in your personal capacity. There may also be some trouble securing the loan in the first place: banks want to know that they are lending to people who can pay them back!

The bottom line

Accessing funding is a decision you should consider carefully. Ask yourself what you need from your business, what you can afford and just who you would be going into business with.

As your accountants we’re here to help you so please give us a call before you make any big decisions.

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 us for specific and detailed advice.

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January 29, 2025
Read more about the article What Your Balance Sheet Says About Your Business
Accounting / Business

What Your Balance Sheet Says About Your Business

“It sounds extraordinary, but it’s a fact that balance sheets can make fascinating reading.” (Mary Archer)

A balance sheet reveals a company’s “book value” by showing what assets it owns, what liabilities it owes, and the equity or net worth attributable to its owners, at a specific point in time. 

Because all resources or assets are either funded by borrowing (liabilities) or owner investments (equity), the fundamental accounting equation that underpins the balance sheet is: 

Assets = Liabilities + Equity. 

Key components of a balance sheet
  1. Assets are resources controlled by a company that are expected to generate future value. These include current assets, such as cash, accounts receivable, and inventory; and non-current or long-term assets such as property, equipment, trademarks, and patents.
  2. Liabilities are obligations the company owes to external parties. These include current liabilities, such as accounts payable, payroll and short-term loans, and non-current or long-term liabilities like bonds, leases and deferred tax liabilities. 
  3. Owners’ equity represents the net worth of a company after liabilities are deducted from assets and includes retained earnings and contributed capital, among others.
What your balance sheet says about your business

The balance sheet is an important tool for evaluating your company’s financial health and operational efficiency. 

By providing an overview of the assets and liabilities of the company and how they relate to each other, the balance sheet can help answer questions such as whether your company has a positive net worth, whether it has enough cash and short-term assets to cover its obligations, and how indebted it is compared to its peers. 

The balance sheet will show when a company is borrowing too much money, if the assets it owns are not liquid enough, or if it has enough cash on hand to meet current liabilities. 

For this reason, balance sheets are also used to secure capital, private equity funding, business loans or bank finance, as they allow stakeholders to assess the financial health of a company, its solvency, and its ability to repay short-term debts.

Using your balance sheet for better management

Business owners and managers, as well as other stakeholders such as lenders or investors, can leverage the balance sheet alongside other financial resources to enhance decision-making and performance.  

When analysed over time or comparatively against competing companies, a balance sheet can reveal ways to improve the financial health of a company.

Financial ratios are important tools that draw data directly from the balance sheet and other sources and are used for fundamental financial analysis. Some common ratios include:

  • Liquidity and solvency ratios show how well a company can pay off its debts and obligations using existing assets. They also allow for monitoring long-term liabilities to maintain sustainable debt levels.
  • Financial strength ratios, such as debt-to-equity ratios, measure the relative proportion of debt and equity used to finance a company’s assets. A higher debt-to-equity ratio shows that a company is more heavily financed through debt, showing an increased leverage. These ratios indicate how financially stable a company is and how it is financed.
  • Activity ratios focus mainly on how well the company manages its operating cycle, which includes receivables, inventory, and payables. These ratios can provide insight into the company’s operational efficiency.

The balance sheet can also contribute to planning for growth, for example, by showing if the company has the assets, resources and capacity to expand, or if reinvestment or additional funding is required. 

We can provide and interpret your financial reports

A balance sheet is an invaluable strategic management tool – provided you know how to interpret it.

We can provide your company with this important business tool (along with other key financial reports such as your income statement and cash flow statement). We can also help you to understand and use these reports to make better business decisions, enhance financial health, and drive sustainable growth.

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 us for specific and detailed advice.

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January 29, 2025
Read more about the article The Enormous Benefits of Non-Profit Collaborations
charity, donation and volunteering concept - happy smiling male volunteer with clipboard and woman taking box of food at distribution or refugee assistance center
Business

The Enormous Benefits of Non-Profit Collaborations

“The unfortunate need people who will be kind to them; the prosperous need people to be kind to.” (Aristotle)

Strategic business partnerships are an integral part of any successful business and yet very few entrepreneurs think of the opportunities which arise from partnering with non-profit organisations. Collaborating with NGOs and charities has been shown to offer many of the same benefits achieved through regular business partnerships – as well as a few additional, and perhaps unconsidered ones. Here’s why helping others may also end up helping you.

Make the circle bigger

Like any other business partnership, aligning with a non-profit gives businesses shared access to one another’s contacts and opens up doors that previously may have been locked, or not considered. By hosting combined events you’re sure to not only meet the leaders of other companies in your position, but may also uncover new talent, enthusiastic and empathetic leaders and creative mentors and volunteers.

Greater brand exposure

By moving into these new areas, brands stand to not only make valuable business allies but are also likely to expand their own customer base. By partnering on events or activities with a non-profit, your brand immediately becomes exposed to the non-profit’s audience in a way that’s real, and likely to generate a warm first impression. According to research conducted by Consumer Goods, 82% of shoppers want a brand’s values to align with their own. When a charity’s audience sees you offering your support, they know you care about the same things they care about.

Improve employee happiness

In a survey commissioned by former Unilever CEO Paul Polman in 2023, a whopping 76% of respondents said that they want “to work for a company that is trying to have a positive impact on the world”. The study further found that more than half of employees said that “they would consider resigning from their job if the values demonstrated by their employer did not align with their own”, while 35% of respondents claimed to already have quit a job for this reason.

Improve your image

How your business is presented in the media impacts consumers, current and potential employees, and prospective partners. Good press is therefore vital for business expansion – and assisting a non-profit is a great way of ensuring that what’s being said is positive. When you help a charity, you put your brand values and ethics front-and-centre for people to see and admire. This goes a long way toward fostering goodwill toward your company and building positive brand association.

Reap the tax benefits

There can also be tax benefits to assisting charities and non-profit organisations. The donations made can be in cash or kind, and must be made to qualifying public-benefit organisations (PBOs). These organisations are registered with SARS and will issue donors with a certificate in terms of section 18A of the Income Tax Act. The total deduction must comprise no more than 10% of your taxable income for the given year of assessment and must be made with no strings attached. 

It’s a fairly complicated area, so be sure to get professional advice. Your accountant will be able to help you maximise the benefit of these deductions and ensure they are made in the best interests of both parties.

Make it happen

In addition to these business benefits, partnering with a non-profit also helps you to make a difference in the world, building your own self-belief in the value of your work, and helping those who are in desperate need. Put together, it’s clear to see that working with a non-profit should be an essential part of every business plan in 2025. 

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 us for specific and detailed advice.

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January 29, 2025
Read more about the article Your Tax Deadlines for February 2025
Tax

Your Tax Deadlines for February 2025

  • 07 February – Monthly PAYE submissions and payments
  • 25 February – Value Added Tax (VAT) manual submissions and payments
  • 27 February – Excise duty payments
  • 28 February – VAT electronic submissions and payments, Corporate Income Tax (CIT) Provisional Tax payments where applicable, and Personal Income Tax (PIT) Provisional Tax payments. 

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 us for specific and detailed advice.

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January 29, 2025
Read more about the article 3 Things You Have to Do to Position Your Business for Growth in 2025
Business

3 Things You Have to Do to Position Your Business for Growth in 2025

“There are no secrets to success. It is the result of preparation, hard work and learning from failure.” (Colin Powell, United States Secretary of State)

Of course you plan for your business to grow. But in an environment of constant change, it can be hard to know where to place your energy. These three focus areas will help you position your business for growth, regardless of the external circumstances.

1. Clean up your finances

A business that’s ready for growth is one that understands its finances. How much money can you afford to spend on advertising? What investments need to be made to maintain infrastructure or hire the right staff? And can you afford to keep going if there’s a disruption in your supply lines? Businesses with tidy finances are able to answer all of these questions and more. 

If you can’t answer every conceivable question about your finances, then you need to ask your accountant (that’s us) to help you get them in order. Here are a few pointers:

  • Separate business and personal finances

    Business finances that are intermingled with personal ones create confusion and make it difficult to get a clear picture of just where the business is headed.

  • Introduce bookkeeping software

    You may not have the time to stay on top of your finances when you’re running the business – but that’s okay. Using bookkeeping software can keep you one step ahead of the game, and it will definitely save your accountant time.

  • Regularly update your financial statements

    Ask us to keep a set of financial statements up-to-date and on hand at all times. Financial statements can open doors, allowing you to get necessary funding, apply for awards or government incentive programs and/or build an accurate business strategy.
2. Optimise your client base

Improving company finances doesn’t have to mean introducing new products or expanding into new territories. It’s far simpler to maximise the benefit you’re getting from your current market. Do this by ensuring your sales and marketing teams are functioning at the best possible level, getting the right information to your clients, and then maximising the impact they have on those clients. 

Focus on building genuine relationships with your customers by engaging with them and their needs, providing top-level service and offering value beyond the sale. If you truly care for your customers they will care for you, and you will find yourself at the front of the queue when it comes to new market information and advice on how your product could be improved. Your sales team should also be encouraged to follow up with potential new clients to ensure opportunities aren’t being missed. 

3. Analyse your existing offering

Growth can also be generated by making sure you’re offering the products your clients need at the right price. It’s no good pouring money into a product that’s not right, or which isn’t as good as its competitors. The first step to finding out if you’re on the right track is to ask yourself the question, “If we stopped operating today, would anyone miss us?” If the answer isn’t a resounding yes, then you need to immediately investigate what changes need to be made. 

Do you need to bring on new products to fill the missing gaps in your offering? Is there an essential thing that your product could be doing better? If you aren’t continually striving to deliver the best product in the perfect price range, then you’re probably falling behind.

The bottom line

A company is like the human body. It needs to be perfectly optimised to run at its best level. Making the changes to improve your business health today will pay off in the long run. If you need any help with the financial side of things, please speak to us.

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 us for specific and detailed advice.

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January 8, 2025
Read more about the article Tax Compliance in 2025: Help Is at Hand
Tax

Tax Compliance in 2025: Help Is at Hand

“Being tax compliant and ‘paying your fair share’ is not just good for you, but also contributes to the positive growth of our country’s economy which in turn benefits all South Africans.” (SARS)

Being tax-compliant is a legal requirement for all South Africans. 

SARS says it will be unrelenting in driving voluntary compliance in pursuing the 2024/25 tax revenue target of R1,840.8 billion. 

To expand the tax base, detect dishonest taxpayers, deal with tax avoidance, expand debt collection, and improve service levels, SARS will:  

  • Deploy more data science and artificial intelligence (AI).
  • Broaden the tax base via third-party data sources (banks, medical schemes, fund administrators etc.
  • Use predictive modelling to ensure all taxpayers and traders are registered, filing returns and paying dues. 
  • Build detection capability using machine learning models and AI. 
  • Enforce Customs and Excise trade laws against the illicit economy.
  • Focus on dispute prevention and resolution.

Importantly, SARS is ready to act against those who willfully and defiantly ignore their legal obligations by misrepresenting their true economic status. SARS will impose significant legal and administrative costs on taxpayers and traders who deliberately fail to meet their obligations.  

What does tax compliance look like?

Your company needs to:

  • Be registered with SARS for all the tax types applicable to your company.
  • Have either merged or declared all registered tax reference numbers on eFiling.
  • Timeously submit all tax returns and other documentation requested.
  • Keep all registered particulars updated.
  • Pay all tax debt on time, or timeously secure a payment arrangement or suspension of payment.
  • Deregister the business if it is liquidated or closed.

Remember that your tax compliance status is not static: it changes according to your continued compliance with tax requirements month after month. Also remember that SARS can impose both monetary and criminal sanctions to enforce compliance. This is a significant business risk, because the burden of proof, should a taxpayer disagree with a decision taken by SARS, lies with the taxpayer. In the event that the taxpayer fails to argue their case successfully, they may find themselves in a position where penalties are suffered even if the error was unintentional or administrative in nature.

Benefit from the advantages of tax compliance

When you comply with your tax obligations, you give your business some compelling advantages.

  • Eliminate the costs of non-compliance, like penalties, interest, and additional accounting and admin fees.
  • Avoid the risk of criminal offences, which may result in a fine, imprisonment or both. Common offences include not registering for a tax type, or simply not submitting tax returns. 
  • Proof of tax compliance is considered an indicator of good company management and legal good standing. 
  • Good standing tax clearance certificates are often required for tender applications, bidding processes or prequalification as a supplier. They can also be needed to receive payment, or for foreign investment allowances. 
  • Compliance enables companies to gain the confidence of clients, stakeholders and investors; take advantage of business opportunities; and prevent reputational damage.
Help is at hand

Now more than ever before, professional assistance is the best way to consistently meet all the tax compliance requirements across all the relevant tax types over the tax year, and in an always-changing tax landscape.

SARS itself recommends “employing an accountant, tax practitioner, or other tax professional to complete returns, or from whom to obtain advice before completing a return with entries that are not understood or adopting a position with tax implications” to ensure you have taken “reasonable care” when it comes to your tax affairs.   

We are well-versed in the requirements and deadlines of the various tax types and we’re also on top of the latest rules and processes. In a nutshell: we have the tax expertise to ensure you remain tax compliant all through 2025. 

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 us for specific and detailed advice.

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January 8, 2025
Read more about the article Starting a New Business? Here Are the Tax Implications…
Tax

Starting a New Business? Here Are the Tax Implications…

“A goal without a plan is just a wish.” (Antoine De Saint-Exupery, author of The Little Prince)

Want to start a business? SARS warns you to be aware of the tax obligations of running a business, whether it’s in the form of a legal entity or in your personal capacity. 

Considering the tax implications before starting a business will result in substantial benefits down the line. These include better budgeting and cash-flow planning, cost savings, and easier administration and compliance.

Pound of flesh

Depending on the type of business entity you establish, different tax rates and rules apply. On the flip side, certain tax incentives and opportunities to reduce the administrative burden may be available. 

Legal entities like private companies, close corporations (CCs) and non-profits are automatically registered with SARS for corporate income tax when they register with the Companies and Intellectual Property Commission (CIPC). 

This is not required for a non-legal entity like a sole proprietorship or partnership. In these cases, the owner or partners are taxed in their individual capacities on their share of taxable profits. Certain tax rebates and credits apply, which can reduce overall tax liability.

Legal entities may qualify for different tax incentives and preferential rates like the turnover tax system, the small business corporation (SBC) incentive, or accelerated deprecation relief available in Urban Development Zones.

Corporate Income Tax (CIT) 

Every business (legal entity or individual) is liable for income tax. But the rates of taxation – and the rules – can vary widely. 

  • For companies (including CCs) the standard corporate tax rate is 27%. In addition to filing an annual return, companies are required to submit provisional tax returns twice a year – and to make the required payments on time.
  • Turnover tax is a possible alternative for sole proprietors, partnerships, CCs and companies with a qualifying annual turnover not exceeding R1 million. This simplified annual tax, calculated on your turnover, replaces income tax, provisional tax, VAT, capital gains tax and dividends withholding tax (if the annual dividend does not exceed R200,000). This substantially reduced administrative burden is a significant benefit for small businesses. The first R335,000 of annual turnover is tax exempt – and the highest tax rate is just 3%.
  • Qualifying companies may register as a small business corporation (SBC) for additional tax incentives, including a tax exemption for the first R95,750 of annual taxable income, and a reduced corporate tax rate up to a taxable income of R550,000.
Employee taxes

Every employer must register for pay-as-you-earn (PAYE), deduct it from remuneration paid to employees (along with Unemployment Insurance Fund contributions) and pay it over to SARS. Once annual salaries, wages and other remuneration exceed R500,000, the Skills Development Levy (SDL) also becomes payable.

As an employer, you must submit monthly returns and payments to SARS. There are also two compulsory reconciliations during the year. 

Some relief is available through the Employment Tax Incentive (ETI), allowing for a reduction in PAYE for qualifying companies that employ young people.

VAT (Value Added Tax)  

VAT registration becomes compulsory if the value of invoices raised by an entity (or is expected to be raised due to a written contractual obligation) exceeds R1 million in any consecutive 12-month period. 

Your business can also choose to register for VAT voluntarily. This will benefit businesses with sizeable VAT input claims.

New businesses should factor in the increased administrative requirements of VAT registration and compliance. There are also cashflow implications as your business has a VAT liability before payments on invoices are received – a significant risk if invoices are paid later than expected.

Other taxes that may apply
  • Companies that import or export goods must be registered (and will be liable) for customs and excise taxes.
  • A dividends tax of 20% must be withheld by the company and paid to SARS when its shareholders earn dividends.
  • Depending on the industry and the specific business activities, further taxes such as carbon tax, sugar tax, transfer duties, and Capital Gains Tax (CGT) may be applicable.
Tax implications for business owners

Business owners who pay themselves a salary will already be paying PAYE. If there are no additional income streams, they don’t need to register for provisional tax.

If, however, a business owner receives any other income in addition to this salary, whether from another source, or dividends or investment income from the business, registration as a provisional taxpayer may be necessary if the requirements of the provisional taxpayer definition are met. 

New business owners often can’t draw a salary for some time. Personal expenses paid by the company can be allocated to a loan account, or the owner can draw down a loan. These expenses will unfortunately not be deductible for CIT purposes.

The most tax-efficient solutions for your new business 

When starting a business, tax planning is critical. It adds significant value and protects you against unexpected tax liabilities. 

Our team can help you determine the most tax-efficient structure for your new business – and we can ensure it remains tax-compliant. We’re passionate about saving you time, reducing costs, and contributing to the success of your new venture…

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 us for specific and detailed advice.

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January 8, 2025
Read more about the article Why Email is Destroying Your Business (And How to Stop it)
Business

Why Email is Destroying Your Business (And How to Stop it)

“There’s life and death in every email.” (Bill Gates)

Over the past 25 years, email has become synonymous with office life: a recent study found that the average worker sends between 9,000 and 15,000 emails a year. All of this is happening despite email being fundamentally flawed in multiple ways that choke businesses and, in some cases, even kill them off. Here are four reasons why email needs to go.

  1. It thwarts productivity

    The first thing most employees do in the morning is to check if they have any important emails. Undoubtedly, they do – but these are often buried among a slew of customer queries, spam emails, company newsletters, messages from business partners, employee announcements, HR updates and IT memos. According to one study, wading through these emails to find the vital pieces of information can take employees up to two-and-a-half hours every day.

    The need to constantly check emails can interrupt employee thinking processes and break the vital concentration they need to keep their workflow going. This can slow down projects at every step with the hours adding up dramatically over each project’s lifetime. Worse, the need to be permanently online can mean this is happening with personal emails too.

  2. It slows down collaboration

    For one-to-one communication, email retains a powerful role. But in groups, it’s seldom efficient. Email threads where some are always included, and others seldom lead to email dead-ends, lost information and uninformed team members. Even if you are kept in the loop, it can still be confusing. Is the version of the document in your inbox the latest one? Or has it been updated by someone else on another thread? 

  3. It’s damaging staff mental health

    The two challenges above lead directly to a third, perhaps more dangerous one – an attack on employee mental health. The need to constantly be available, connected and ready-to-reply is exhausting and can lead some employees into anxiety or depression. Humans simply aren’t wired to have their attention constantly divided. No wonder email overload can lead to a notable decrease in our ability to function, with one study suggesting this to be the equivalent of a 10-point drop in IQ. 

  4. It’s a threat to your safety

    The internet is full of scam artists, criminals and opportunists – all of whom are trying to find a way to steal your data and/or your cash. While antiviruses and firewalls may offer protection from many forms of attack, they can’t protect from everything. According to Seacom, 40% of cyber events that result in loss are Business Email Compromise (BEC) scams. BECs – emails designed to trick staff into giving up vital information or downloading malicious software – result in an estimated R53bn in global company losses each year. 
So, what can you do?
  • Train your staff  

    Email isn’t going anywhere. All enterprises, no matter their size, need to find the budget to adequately train their staff in the correct, most efficient way to use emails to reduce the burdens on themselves and their colleagues, while also reducing the threat from BEC scams. As your accountants, we can help you to ensure there’s enough money in your training budget. 

  • Implement email rules 

    While some countries (most notably France) have enshrined a “right to disconnect” in their constitutions, this is not the case in South Africa. That’s why it’s important to implement company rules that allow your employees to switch off and be unavailable – not just in the evenings and on weekends, but during the workday too. You can’t expect your employees to get any work done if they feel under constant pressure to check their emails. What’s more, you need to put your money where your mouth is, by sending fewer internal emails. 

  • Use shared communication spaces  

    There are loads of new technologies that can help your team communicate better. Shared digital workspaces allow team members to immediately see the latest versions of documents, leave notes for the entire team, and communicate important project information without being afraid that something will get lost in the process. If you aren’t using Google Workspace, Teams, Monday, Slack (Butterfield does have skin in the game), Trello, or similar, you need to speak to your accountant about making this a priority in your budget.

  • Leverage automation tools and technology

    The creation of AI has led to new solutions that can help your employees manage their email inboxes. These tools can sift out spam, and sort emails to help staff find the information they need while also deprioritising those emails that don’t need their immediate attention.

The world is getting faster every year, and your business can no longer afford to use email for the wrong reasons. Updating the way you work will have an immediate boost on your company’s well-being and productivity. Speak to us if you need help freeing up the budget to make it happen.

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 us for specific and detailed advice.

© AccountingDotNews

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January 8, 2025
Read more about the article Your Tax Deadlines for January 2025
Tax

Your Tax Deadlines for January 2025

  • 07 January – PAYE submissions and payments.
  • 20 January – End of Filing Season 2024 for Provisional taxpayers & Trusts.
  • 24 January – VAT manual submissions and payments.
  • 30 January – Excise duty payments.
  • 31 January – VAT electronic submissions and payments, & 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 us for specific and detailed advice.

© AccountingDotNews

Comments Off on Your Tax Deadlines for January 2025
January 8, 2025

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