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IT’S YOUR BUSINESS - May 2014

A lot of smaller business owners do not have the time or expertise to ensure they comply with relevant laws and regulations and good business practice.  Your accountant can help as they will have the required skills and professionalism to assist you in your business affairs.  Some tips are:

• Keep your accounting records up to date.  A monthly management account assists you to see what has happened and where you are going over the year and highlights problems earlier.
• Keep all your expense slips and invoices - it is impossible to remember a few months later what they were for if not clearly marked.  It is also expensive to request older bank statements from the bank.
• Issue sales invoices in sequence and keep the ones that were cancelled.
• Ensure that your purchase invoices comply with the VAT act to enable you to claim everything you can.
• Ensure you retain your documents for at least five years.
• Back up your electronic records on a regular basis and preferable store this in another location.
• Ensure compliance with tax laws and submit returns on time.  Avoid penalties and interest.
• You may qualify for the new employee tax incentive scheme and get some tax back.
• Payrolls must adhere to several Acts and calculated correctly – this changes very year.
• You may qualify as a level 4 BBBEE contributor.
• Your company or close corporation may qualify as a small business corporation and have a bigger tax break.
• Home office expenses can be claimed in certain circumstances
• Ensure that your tax practitioner is registered with SARS.
• Check that your company or close corporation is up to date with CIPC annual fees to avoid deregistration and ensure details are up to date with them.
• Your company may not need an audit or AGM anymore – change your memorandum of incorporation.
• Use an accountant that is registered with one of the professional bodies in SA.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.  


IMPORTANT DATES:

VAT returns and payments - within 25 days of end of VAT period
PAYE/UIF/SDL EMP201 submissions and payments  - within 7 days of the next month
CIPC annual return and payment - annually on anniversary of registration of company or close corporation
Annual financial statements - within 6 months of year end
Tax returns for companies and close corporation - within 12 months of year end
Provisonal tax returns - six monthly
Tax year end for individuals and trusts - 28 February

28 February 2014 - tax year end - update logbooks

28 February 2014 - deadline for 2nd provisional tax payment for 2014

31 May 2014 - end of employer's tax season - EMP501 reconciliation and IRP5 certificates

1 July 2014 - start of personal tax submission season

27 September 2014 - deadline for submission of manual tax returns

31 October 2014 - end of interim employer's tax reconciliations of EMP501

22 November 2014 - deadline for submissions of personal tax on efiling

December 2015 - deadline for submission of document on access to information for small businesses in terms of the Public Access to Information Act.


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IT’S YOUR BUSINESS - April 2014

Amendments to legislation may affect your business and some of the latest changes are:

1. New PAYE rates which will affect the amounts deducted from employees – ensure that you make the adjustments on your payroll.
2. New medical aid credits which will affect amounts deducted from employees whom belong to a medical aid.
3. Employment Incentive credit can be claimed against PAYE paid for certain new employees under a certain age – lower your PAYE amounts payable.
4. If you are registered for VAT and you want to claim the VAT on purchases above R5 000 from a registered supplier, then both the supplier’s and your VAT number must be on the tax invoice.
5. BBBEE legislation has changed and if you turnover is below R10 million you may qualify as an exempt micro enterprise and count as 100% BBBEE credit for your customers – use this as a marketing tool.
6. The Protection of Personal Information Act aims at protecting personal information you may hold of your clients, how you may use it and how it must be protected and destroyed
7. National Credit Act is applicable to your enterprise and any interest charged on overdue customer accounts must comply with the Act.
8. The Public Access to Information Act requires that a manual on access to your company or business information must be in place by the end of December 2015.
9. Tax clearance certificates can be obtained on efiling.

The 2014 tax period to reconcile and submit EMP501 and final IRP5 for employees has opened and submissions are due before end of May 2014.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.  


IT’S YOUR BUSINESS - March 2014
The 2014/15 budget has just been released and I list some tax highlights affecting small businesses and individuals:

1. Increase in tax thresholds.  Maximum tax rate for individuals remain at 40%
2. No tax is payable on taxable income of less than R70 700 if you are under 65, R110 200 if you are under 75 and R123 350 above 75.  
3. The reduction in your annual tax will be about R646 if you earn R75 000 per annum; R1 272 on R180 000; R2 064 on R360 000 – the saving reduces as your income increases.
4. The first R23 800 of interest will be tax free if you are under 65 and R34 500 if you are older.
5. Monthly medical credits increase to R257 for taxpayer and first dependent and to R172 for other dependents.
6. Tax preferred savings accounts to be introduced on which all interest will be tax free.  Contributions limited to R30 000 per annum to a maximum of R500 000 over your lifetime.
7. Lump sums on retirement funds on retirement and retrenchment are now tax free up to R500 000.
8. Corporate tax rate remains at 28%
9. Tax rates for trust remains at 40%
10. Proposals made to lessen tax on micro businesses.
11. Proposal on small business corporations will replace reduced tax rates with an annual refundable tax compliance rebate.
12. The employment tax incentive system will be improved to include refunds.  Employers may qualify for this incentive based on the age of their employees.
13. The requirement that public benefit organisations to spend 75% of donations received within one year will be relaxed.
14. From 1 March 2015, you can deduct contributions to retirement funds up to 27.5% of your taxable income up to R350 000 per annum.
15. Subsistence and travel allowance rates changed.

PAYE deducted based on the new rates to be amended effective from 1 March 2014.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.


IT’S YOUR BUSINESS - February 2014

Property ownership has income tax impacts whether you are selling or renting your property out.   I list some pointers below to keep in mind.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.

Whether you hold your property in your personal name, in both your names if you are married, in a company or a trust will have tax implication.  In general, from purely a tax perspective, to hold the property in a trust will result in the most tax payable, then a company and then in your individual name (depending on your tax bracket). Non-residents will be taxed on their South African income.

If you rent your property out you will be liable for the profit on the rentals received and you will have to register for tax.  If you are married in community of property, the profits will be split. Expenses such as the interest on the bond, rates, taxes, levies, repairs, insurance, cleaning can be claimed against the rent received.  You can only claim these if rentals are generated. Losses might be ring fenced and not set off against your other income but is then carried over until such time as profits arose.

If you are a non-resident and you sell your property, a withholding tax of 5% for individuals, 7.5% for companies and 10% for trusts is payable on the selling price above R2 million.  The purchaser must withhold this tax from the amount they pay to you.  You can obtain a directive for a lesser amount.

Transfer duties will be payable by the purchaser on a sliding scale above R600 000 or VAT depending on your VAT status.  

Capital gains tax is payable on the profit on the sale.  The profit inclusion rates are 25% for individuals and 50% for companies and trusts.  As this is not your primary residence, you can only claim the R30 000 exemption if the property was registered in your personal name.  

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.


IT’S YOUR BUSINESS - January 2014

Starting out in life has new challenges and grown up things to consider.   I list some pointers below to keep in mind.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.

• Start with good financial discipline and make it a habit all your life.
• Ask for advice – even if it is from your parents.
• Do a budget and stick to it – it helps you live within your means and also shows you on what you actually spend your money.
• Start saving from the beginning – a small amount builds up with interest over the years.
• It is always beter to pay cash than to get into debts.
• Repay your debt with the highest interest rate first.
• If you get into financial difficulties, speak to your lenders and make arrangements that you stick to – you don’t want to be blacklisted.
• Shop around for a bank account that suit your needs and is cost effective. Bank charges can be expensive.
• Check your bank statements – this helps you pick up errors and keeps you in touch with what you have available.
• Draft your will and keep it up to date.
• Review you financial health every few years to see if you still have what is the best for you.
• Keep important documents in a safe place – most Acts require you to keep documents for at least 5 years.  
• Register for tax as soon as you start earning income – you may even get a refund on taxes deducted especially if you don’t work for a full year.
• Insure your valuables.
• Ensure that you are covered for medical emergencies.
• Spoil yourself from time to time.
• Parents can donate in total a R100 000 per annum tax free.
• Bona fide bursaries are tax free.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.  


IT’S YOUR BUSINESS - December 2013

Foreign non-residents are subject to special tax rules in South Africa.   I list some pointers below to keep in mind.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.

• You are a generally regarded a non-resident if you spend more than 183 days a year outside SA, subject to other tests.
• You will be taxed on your SA income (salaries, director fees, interest, rental income, capital gains)
• You will have to register for tax if you taxable income is above R67 111 if you are younger than 65 or R104 611 if younger than 75 or R117 111 if older.
• You are taxed on worldwide income but can claim credits for tax paid in foreign country.
• Foreign losses cannot be set off against SA income
• Double taxation agreements may be applicable that contain special rules.
• Royalties and payments to sportsmen and entertainers are subjected to a 15% withholding tax.
• If you sell your SA property for more than R2 million, capital gains tax must be withheld by the purchaser at a rate of 5%.  
• Foreign pensions are not taxed in SA but must be declared on your tax return.
• Foreign tourists can claim VAT paid back on goods taken out of the country.
• Goods purchased and exported directly out of the country by the vendor is zero rated.
• A tax clearance certificate is required on emigration from SA
• Non–residents are not liable for donations tax.
• Customs duty is not payable on importation of household goods when you immigrate to SA
• Foreign resident can be a shareholder or director of a SA company but the company’s public officer must be a SA resident
• A work permit is required to work in SA and other residence application must be made at the Department of Home Affairs
• Reserve Bank regulations must be adhered to for loans granted by resident companies and individuals to non-residents.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.  


IT’S YOUR BUSINESS - November 2013

Pensioners do receive tax breaks. I list some pointers below to keep in mind.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.

Be careful of quick rich schemes – ask for a second opinion.
Keep some savings ready accessible for unforeseen events.
Make use of pensioner’s discounts and rebates.  Claim benefits if you qualify.
Regularly review your insurance and life cover.
Make provision for you funeral costs.
Ensure that you have a valid and current will and review it regularly.
Keep all you important contracts and account numbers in a safe place and Let someone trustworthy know where it is.
Make use of experts and ensure they are registered to provide financial, legal, tax or estate planning advice.  

Keep taxes up to date, you may get a refund depending on your circumstances.
You may not need to submit a return if your income is less than R250 000 in certain circumstances.
You only start paying tax if your taxable income is above R117 111 when you are older than 75 and R104 611 if you older than 65.
You get the first R34 500 of interest earned on SA investments tax free if you are above 65 and can add that to the above thresholds.
SA dividends are tax free.
Keep all your qualifying medical expense records - you can claim against tax.
Special tax rates apply on your lump sums withdrawals when you go on retirement.
Rental income is taxable but you can claim certain expenses.
Capital gains tax must be kept in mind when you purchase and sell property especially for investment purposes.
Donation up to R100 000 per year is tax free, above that there is a 20% tax payable.
In most cases, estate duties is payable at 20% above R3.5 million and executor remuneration may be payable.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.  


IT’S YOUR BUSINESS - October 2013

Employee taxes are applicable to all business owners and can become quite complex.  I list some pointers below to keep in mind.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.

• The definition of an employee and remuneration must be clearly understood to ensure that you calculate your taxes correctly.  Special rules apply if you make use of a labour broker’s employees, independent contractors or personal service providers.
• PAYE is to be deducted either at the rates and scales promulgated annually or at 25% in certain cases or as per a tax directive issued by SARS.
• A specific calculation is required for annual payments to ensure the correct tax is deducted.
• UIF is calculated at 1% of gross income of an employee up to a limit of R148.72 per month.  You as employer must also contribute an equal amount.  UIF is deducted on any employee, including directors, working more than 24 hours a month.
• SDL is also levied at 1% and payable once your payroll is above R500 000 per annum.
• Workman’s Compensation contributions must be paid annually
• SARS can also appoint you as an agent that has to withhold amounts from your employee for their taxes due.
• A monthly EMP201 return with the PAYE, UIF and SDL payable must be submitted and paid by the 7th of the next month.
• A bi-annual EMP501 reconciliation return is normally due before the end of October and end of May of each year.
• A penalty of 10% is immediately levied on late submission and payment and interest is also charged on outstanding amounts.  You may also be liable for administrative penalties.  It is an offence to deduct taxes and not pay them over.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.  


IT’S YOUR BUSINESS - September 2013

Surviving in the current climate takes hard work, dedication and your eye firmly on your business objectives.  Here are some tips that may help.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.

• Revisit your business plan and adjust.
• Prepare a realistic budget and stay within it
• Expand your market reach but only retain the effective marketing channels that do work for you
• Ensure your prices are competitive and cost effective
• Look at your product/service offerings and mix – ensure that all are profitable
• Take control of your costs - see where you can save and make changes to the way you do business
• Compare bank charges and package your bank offers.  Minimise the transactions that are costly.
• Ask for advice from your accountant, financial adviser and bank manager.
• Ensure your sales bring in the cash as quickly as possible – follow up immediately on long outstanding debt – charge interest on overdue accounts
• Delay your payments but only if your supplier agrees to it and it is cost effective
• Save on the small things – electricity, consumables, printing, telephone and entertainment – they all add up
• Vet client that you sell to on credit to ensure that they will pay and you don’t sit with bad debts
• Ensure your employees are productive
• Refinance burdensome debts – specialist advice are required and ensure that it benefits you in the long run
• Ensure you have adequate controls in place to prevent losses and fraud within your business
• Pay the correct amount of tax – never evade tax and pay on time to avoid penalties and interest
• Look for networking opportunities to market your business – word of mouth is the cheapest and best advertising
• Sell unproductive and idle assets
• Reduce stock

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.


IT’S YOUR BUSINESS - August 2013

Tax season for 2013 is now open.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed and ensure that it is a registered tax practitioner.  

You have to submit a tax return when any of the following applies:
• You have income from a profession, trade, business, calling, occupation or venture, including the letting of any property and the receipt of taxable interest
• You have received a salary with travel, subsistence and other allowances
• You have received a salary without any allowances from more than one employer or if you only worked for one employer, if the taxable salary was above R250 000
• You hold overseas assets or funds above R100 000
• Your local capital gains/losses exceed R30 000
• You have any foreign income or capital gains
• You are a shareholder in a company or a member of a close corporation
• You have been requested by SARS to complete a return or received one from SARS

You will not pay tax on the following:
• The first R22 800 interest income if you are under 65 and R33 000 if you are older.  Married in community of property couples must split their total interest income equally.
• Total taxable income (including taxable interest) of less than R63 556 if you are younger than 65; R99 056 between 65 and 75 and R110 889 if you are older than 75.

Deductions can be claimed for medical aid contributions and costs, pension and retirement annuity contributions, travelling expenses (if log book is kept), income protection premiums and other business expenses for which you received an allowance.  

All documents must be retained for at least 5 years.  Get your return submitted as quickly as possible especially if a refund is due to you.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.  


IT’S YOUR BUSINESS - June 2013

Tax season for 2013 opens soon.  Ensure that you have your documents ready to meet the deadlines and avoid paying penalties and interest.   As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.  

It is always prudent to use a qualified tax practitioner to complete your annual returns to ensure that you comply with the law and claim what you are entitled to ensure you pay the correct amount of tax.

An important change will occur from 1 July if you use another person to complete your tax return.  These tax practitioners or persons will have to be registered with SARS and with one of the recognised professional bodies approved by SARS.  Ensure that the person you use are registered and approved- they should have a tax practitioner’s number and a membership number.  I am registered with SARS and with SAICA and am thus allowed to complete your tax returns

The tax season for individuals and trusts for 2013 tax year is as follows:
• Submission of manual tax returns – 27 September 2013
• Submission of returns on efiling – 22 November 2013
• Submission of returns of provisional taxpayers on efiling – 31 January 2014

All company and close corporation tax returns must be submitted within 12 months of year end.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za

IT’S YOUR BUSINESS - May 2013

Growing your business requires constant attention and hard work – hopefully some of these tips can point you in the right direction.   As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.  

• Have a clear and long term strategy for your business which is supported by a business plan for the short and longer term. Review it regularly.
• Ensure good employee relations and develop your staff to grow with you.
• Ensure you provide the highest quality of service or goods and keep abreast of the latest developments in your industry.
• Keep your customers happy and address all concerns as quickly as possible.  Word of mouth is the best advertising.
• Join your local business association, Chamber of Commerce or networking events as this is a valuable opportunity to build business relations, training opportunities and to network.
• Market your business to the correct target market and in the appropriate media.
• Stay abreast of the latest legal and regulatory frameworks you have to comply with.
• Form a partnership with your accountant and lawyer; they can be of valuable assistance to you.
• Keep accounting records up to date.
• Prepare and annual budget and work towards it.
• Ensure that your assets, including yourself, are adequately insured.  
• Have a succession plan in place if something happens to you.
• Ask for help when needed and be prepared to pay for it.
• Give of yourself and your business to community events and charities.
• Be environmentally friendly in your business.
• Have fun!

Your 2013 EMP501 annual PAYE/UIF reconciliation has to be completed by 31 May 2013.
Personal tax returns to be submitted between 1 July up to 27 September for manual submissions and 22 November for efiling.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za.

IT’S YOUR BUSINESS - April 2013

Tax changes have been announced in the budget – here are some of the highlights.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.  

• Tax free income threshold for individuals increase to R67 111 if you are under 65; R104 611 up to 75 and R117 111 over 75
• Tax free interest portion increase to R23 800 if you are under 65 and R34 500 if you are older.
• Medical rebates increases
• Lump sum termination tax free portion increases to R315 000
• Capital gains tax remain the same with maximum effective rates of 13.3% for individuals, 18.6% for companies and 26.7% for trusts
• Income tax rates for business and trusts remain at maximum of 40% and 28% respectively.
• Small Business Corporation tax free income thresholds increase to R67 111 and qualifying gross income increase to R20 million

In the pipeline are proposals for the following:
• Retirement savings reforms – fringe benefit tax on employer’s contribution up to 27.5% of total taxable or employment income can be deducted up to R350 000
• Preferred savings and investments accounts with tax free interest to be introduced
• Automated system for tax clearance certificates
• Simplified small business tax requirements to be introduced
• Special economic zones to be introduced with lower tax rates for businesses
• Tax treatment of trusts to be reviewed.

The 2013 EMP501 annual PAYE/UIF reconciliation period for IRP5s is open and has to be completed by 31 May 2013.

A permanent voluntary disclosure programme is in place and may reduce penalties and prosecution if disclosure is made to SARS and a standard matrix for understatement penalties is introduced.

Check that your company or CCs annual returns are up to date – CIPC has deregistered a lot of entities for non-payment with serious consequences for your business.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.


IT’S YOUR BUSINESS - March 2013

Knowledge is power – here as some resources of information for running your business.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.  

Your accountant, as a professional, should be a business partner to you and a valuable source of information.  They have a wide ranging skills set and should tell you if they feel they are not qualified to assist and can then refer you to another professional.  Even if a fee is asked, you are assured that you get the best advice relevant to your circumstances that could save you costs in the long run.

Make sure that you use an accountant that is registered with a recognised professional body as this ensures that he/she is subject to continued professional education, a Code of Ethics and a disciplinary code.  From July, all people that complete tax returns on your behalf will also have to be registered as a tax practitioner with SARS and they will have to belong to such bodies.  Only certain accounting professionals can sign off on the financial statements of a CC or a company.  

There are many resources available on the web that can provide you with more information on running your business, training or networking opportunities such as:
• Industry bodies
• Chamber of commerce
• SEDA
• SAICA , SAIPA, accounting and attorney associations and firms
• Entrepreneur SA
• Moneyweb
• Business Partners
• Banks
• Summit TV

If you have missed the 28 February 2013 deadline for recording you kilometer reading for your log book, your second provisional tax submission and payment or the filing of your CC, company or trust’s annual tax return for 2012, then do so urgently to avoid penalties and interest on late payment.  

The budget speech will be delivered on 27 February and I will next month provide a summary of all the changes to tax.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.


IT’S YOUR BUSINESS - February 2013

This month I will be discussing some pointers for when you have employees.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.  

As there are several Acts that refer to an employee, the definitions differ slightly, but in essense it is a person who has entered into, or works under a contract of service with an employer, whether the contract is expressed or implied, oral or in writing, and whether remuneration is calculated by time or work done, or is in cash or in kind and includes casual and temporary employees, working directors or members of a CC whom earn a monthly fixed salary but excludes sole business owners, partners or shareholders or non-executive directors who are only paid dividends or sharing profits.
The following are the most relevant Acts pertaining to employees (not all the Acts may be applicable in full to all businesses):
• Income Tax
• UIF Act
• Skills Development Act
• Workman’s Compensation Act
• Basic Conditions of Employment Act, Labour Relations Act, Occupational Health and Safety Act, BBBEE Act and other sectorial regulations for specific trades and occupations.

Records that needs to be retained by the employer (even after employee has left):
• Employment contracts
• Employee’s name and occupation
• Register, record or reproduction of the earnings, time worked, payment for piece work and overtime and other prescribed particulars of all the employees  
• Collective agreements
• Arbitration awards
• Prescribed details of any strikes, lock-out or protest action involving its employees
• Records for each employee specifying the nature of any disciplinary transgressions, the actions taken by the employer and the reasons for the actions
• Payslips
• IRP5 records

Tax year end for individuals is 28 February 2013, so remember to record your kilometer reading if you are claiming for a travel allowance and to have your log book up to date.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.

IT’S YOUR BUSINESS - January 2013

This month I will be discussing retention of documents for your small business.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.  

The basic requirement will be to keep source documents and transactional records for at least 7 years and all permanent documents indefinitely.  Various Acts may have an impact but this general rule will ensure you comply.

Every company must maintain the following:
1. a copy of its Memorandum of Incorporation, any amendment and any rules of the company;
2. a record of its directors;
3. copies of all reports presented at an annual general meeting;
4. annual financial statements;
5. accounting records;
6. notice and minutes of all shareholders meetings, including all resolutions adopted
7. any document that was made available to the holders of securities in relation to each such resolution;
8. copies of any written communications sent generally to all holders of any class of securities;
9. minutes of all meetings and resolutions of directors, or directors committees.

• Employee and salary records must be kept for at least 3 years after termination of employees
• Tax records and the documents supporting the figures submitted must be kept at least for 5 years after date of last transaction and assessment.
• Documents can be kept in hard copy or on microfilm or electronic storage provided that it can be converted to hard copy and that controls are in place that the records cannot be altered and are complete.  
• Ensure that you have backup of all electronic data and records, preferably at a separate location from your main computer/ laptop or operation.
• If you issue electronic invoices, the customer must approve the issue of electronic invoices to them and encryption standards must be employed for electronic transmission.

In terms of the Public Access to Information Act you must publish and lodge a disclosure document by December 2015 on how the public can request information from the company and what information is available.

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.

IT’S YOUR BUSINESS - December 2012

This month I will be discussing taxes for your small business.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.  I will assume you operate through a close corporation or company.

Income tax – rate of 28% on taxable profit.  Assessed losses can be set off against future profits. Provisional tax payable twice a year.  Tax return to be submitted within 12 months of year end.

PAYE – deducted from salaries & wages and payable to SARS by 7th of next month.  Monthly returns to be submitted as well as bi-annual reconciliation.  IRP5s to be issued.

UIF – 1% deducted monthly from employees earnings (up to a maximum of R148.72) plus 1% paid by employer.  Payable by 7th of the next month with PAYE submissions.

SDL – 1% paid by employer based on earnings of employees if annual salary bill is above R500 000.  Payable by 7th of next month with PAYE submissions.

Dividend tax- 15% withholding tax from dividend declared.

VAT – compulsory registration if annual turnover is above R1 million. Voluntary above R50 000.  Bi-monthly return and payment due by 25th of month after tax period.

CGT – based on capital profits at a rate of 66.6% of profit and thus effectively taxed at 18.6% of gain.

Micro business turnover tax – based on turnover up to R1 million at a sliding scale from 0% to maximum of 3.05%.  Include income tax and CGT and payable once a year but cannot register voluntary for VAT.

Small business corporation tax – sliding scale with first R63 556 of taxable income tax free up to 28% above  R350 000.  Certain conditions apply regarding shareholding, turnover and type of business.

Labour brokers – client must deduct tax at PAYE rates before invoice is paid unless you can provide exemption certificate.

Personal service companies – client must deduct 28% tax from payment unless you can provide an affidavit that you do not earn more than 80% of income from one source.    

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.


IT’S YOUR BUSINESS - November 2012
This month I will be discussing some basic accounting controls for your business.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.  The objective of controls is to ensure that your accounting records are accurate, complete, valid and can be substantiated.
   
• Keep all you source documents such as invoices, slips, receipts, supplier statements, delivery notes, bank statements etc.
• Don’t destroy cancelled documents.
• File documents in date order.  
• Update and record transactions as quickly as possible.
• Back up your electronic data regularly.
• Keep documents in secure and separate location.
• If you pay a business expense out of private funds, indicate this on the document and keep it.  
• Record all cash received even if the cash is then used for paying expenses without being banked.
• Check that transactions on your bank statements are correct.
• Do monthly bank reconciliations.
• Do regular cash counts for your till and reconcile with your transactions.
• Check bank account detail before you make payment
• Don’t cash cheques.
• Try not to accept cheques for payment.
• Check that you don’t duplicate payments.
• Don’t pay on a quote.  Insist on an invoice or receipt.
• If you are registered for VAT, ensure that purchase invoice above R3000 contain your VAT number as well as the vendor’s VAT number.  
• Ensure that your invoices issued are sequentially numbered
• Ensure customer signs for proof of delivery.
• Follow up regularly on outstanding debtors.
• Perform a stock count at least at year end.  Weekly or monthly is even beter.

You can record your transactions manually in a ledger or electronically in a spreadsheet or in an accounting package.

Remember the efiling tax deadline on 23 November!

For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.


UIF contribution increases

The upper limit on which UIF contributions is calculated has been increased from R12 478 to R14 872 per month, effective from 1 October 2012.  
This means that the maximum monthly contribution that must be paid respectively by the employer and employee increases to R148.72.

IT’S YOUR BUSINESS - October 2012
This month I will be discussing some accounting requirements for your business.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.    

Any business needs to know where it stands and how successful it is in financial terms.  Your accounting records will assist you in this.  The most important principle is to record all your business transactions.

Accounting records consist mainly of the following:
• Source documents such as sales invoices, cheques, bank statements, purchase invoices, till slips, journals etc.  Documents you generate should be in sequential order to ensure all transactions are recorded.
• General ledger – record of all your transactions per account.  You can use an accounting package, excel or a manual system to record the transactions.
• Monthly management accounts (optional) and annual financial statements which consists of an income statement, balance sheet, cash flow statement and notes.

Accounting records and financial statements are required to be kept in terms of the Income Tax Act and also the Companies Act, if you operate as a company or a close corporation.  There are also international accounting standards that must be applied to the financial statements for most companies and close corporations.

In terms of the Income Tax Act all documents have to be retained for 5 years and in terms of the Companies Act for 7 years.  Some documents must be kept permanently and there are also other periods if you are an employer or are regulated by other Acts.

I would recommend that your records are updated monthly.  You will have to update bi-monthly if you are registered for VAT, bi-annually for provisional tax purposes and then annually for the final reports.  The sooner you do this the easier to resolve queries and issues.

Next month I will be discussing basic controls for your small business transactions. For a consultation and assistance, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.


IT’S YOUR BUSINESS - September 2012

This month I will be discussing some VAT basics.  Be sure that you do it right before SARS impose penalties, interest and criminal charges.  As always, a consultation with a professional may be required to ensure that your specific circumstances are addressed.    

Registration can be voluntary, if estimated annual turnover is above R50 000 but is compulsory if it is above R1 million.  Registration documents are to be completed and a personal visit to SARS office is required.  Charge output VAT on your sales and claim input VAT on your purchases from VAT vendors.

A tax period (normally two months) will be allocated and you have to submit your returns by the 25th of the next month.

A valid tax invoice is the most important document to enable you to claim input VAT and you should ensure that you obtain a valid tax invoice:
1. Supplier’s business name (as registered for VAT purposes)
2. Supplier’s business address
3. Supplier’s invoice number
4. Date of invoice
5. Supplier’s VAT number
6. The words “tax invoice”
7. Your business name (as registered for VAT purposes)
8. Your address
9. Description of goods
10. Price of goods
11. VAT percentage charged or the specific VAT amount
12. Total amount of invoice
13. Your  VAT number
14. Quantity
Tax invoices below the total value of R3 000 does not require the last two items above and for a value of below R50, none of your details need to appear on the invoice. Make sure your sales invoices issued also comply.

No duplicates may be issued unless it is clearly marked on the original document as a “duplicate tax invoice”.  

Retain all documents for at least 5 years.

IT’S YOUR BUSINESS - August 2012

We are in the swing of the 2012 tax season (year to 29 February 2012) for individuals and sole traders.  Ensure that you are registered for tax and that you submit your return. As income tax can be complicated, a consultation with a professional may be required to ensure that your specific circumstances are addressed.    

The tax deadlines for 2012 are as follows:
1. Manual tax returns -28 September 2012
2. Efiling and electronic submissions at SARS offices - 23 November 2012
3. Efiling for provisional taxpayers – 31 January 2013

An administrative penalty of at least R250 per month for late returns and interest on outstanding amounts will be levied.  

Register for efiling, either by yourself or with your accountant, as this ensures the quickest assessment and refund of overpayments (usually within a day!).  Your accountant can also assist and ensure that you comply and that the return is completed correctly to ensure that you do not pay unnecessary tax.  Any changes to your bank details may require personal verification at a SARS office.  Documents need to be kept for at least 5 years.

You need to ensure that you have the following on hand for completion of your return:
• Travel log/book is completed and complies to enable you to claim against your travel allowance
• Medical aid certificates and summary and proof of medical expenses paid by yourself that is not covered by the medical aid
• Interest and dividend income certificates
• Retirement annuity certificates
• Sole traders will have to ensure that their business profits are calculated.
• Salary income and other on IRP5 or IT3 and all foreign income
• Capital gains calculated on assets sold
• Balances of personal assets and liabilities for provisional taxpayers and sole traders

Next month I will be discussing accounting basics for your small business.

For a consultation and assistance with registering for efiling and completion of your tax returns, contact Anton Gerber at AH Gerber Chartered Accountants on 082 422 3041 or at info@gerbercasa.co.za and visit our website www.gerbercasa.co.za.


IT’S YOUR BUSINESS - July 2012

The new Companies Act 71 of 2008, as amended, applies to all companies and impacts on close corporations.  You have some choice to insert or alter clauses in your Memorandum of Incorporation (MOI).  I will highlight just a few issues affecting small companies and a comprehensive consultation with a professional is required to ensure that your specific situation and requirements are met.  

• Company name and registration number must appear on all documents and notices.
• Registered office has to be at your place of main business.
• Company records can be in electronic format and minimum retention period is 7 years.
• Notice of 10 business days for shareholder meetings - can be done electronically.
• Annual general meetings not required.
• Director’s rights and obligation extended.  
• Make sure that you minute individual director’s objections to resolutions.
• Audits are not always required.  You may only need an independent review or a compilation report with your annual financial statements.  Close Corporations may also now require an audit.  This all depends on you public interest score and whether all the shareholders are also directors.
• Annual financial statements must be prepared within 6 months of year end.
• Annual returns must be submitted to CIPC.
• Company secretary not mandatory.
• Business rescue procedures introduced for companies in distress.

You should review your current Articles of Association/MOI and make changes to it before 11 May 2013 to ensure that you comply and make use of the opportunities afforded by the alterable provisions in the Act, especially if all your shareholders are also directors.

The tax season for individuals opens on 1 July 2012.  Deadline for manual returns is 28 September, efiling on 23 November and efiling for provisional taxpayers on 31 January 2013.  As it is tax season, next month I will be discussing tax issues for individuals and sole traders.


IT’S YOUR BUSINESS - June 2012
The most important issues to consider when you decide on the best format to operate your business in are the tax, legal, financial and administrative issues, not only for your business but also for yourself and your estate.  This article only highlights certain issues and a consultation with a professional is required to ensure that you obtain comprehensive advice.

• Sole proprietor – personally liable for tax, business debts and legal actions.  Minimal formalities to form and operate.  Tax rate based on profits and your other taxable income.
• Partnership – personally (jointly and severally) liable for tax, business and legal actions.  Require partnership agreement.  Tax rate based on your profit share and other taxable income.
• Company and CC – only personally liable for tax, business debts and legal actions in certain limited circumstances.  Formal registration required with Memorandum of Incorporation.  Flat tax rate dependent on taxable profit after director’s salaries.  

Some of the laws that will place obligations on your business, regardless of the business format chosen, are:
• Taxes – income tax, VAT, PAYE, skills development levy, capital gains tax, dividend tax, import duties
• Unemployment insurance, workman’s compensation, basic conditions of employment
• Companies Act (including Close Corporation Act) – registrations, directors duties and liabilities, possible audits, accounting records, annual returns
• Public Access to Information Act – manual to be prepared
• Prevention and Combatting of Corruption Act – duty to report
• Consumer Protection Act – contracts, advertising, warranties, product liability, quality and safety, franchises, business names, disputes
• National Credit Regulations – credit agreements and interest rates
• Municipal by-laws - business licenses, zoning
• Various other acts that regulate retention periods of documents and other operational and environmental issues


IT’S YOUR BUSINESS - May 2012
This is the first of a series of monthly articles on your business which will assist you in identifying issues and opportunities for improving your business and ensuring that you are compliant with relevant laws and regulations.  These articles only highlight certain issues and a comprehensive consultation with a professional is required to ensure that your specific situation and requirements are met.

I will be covering topics such as business formats, running your business, accounting, taxes, Companies Act, other laws and regulations and plan to provide you with some useful tips to ensure you stay on top of your business.

Here are my top tips for the month:
• Make sure you are passionate of what you want to do and have the guts to be and entrepreneur.  It’s hard work but should be fun and rewarding.
• Have a business plan and make sure you review it on a regular basis.
• Decide on an appropriate business format to use for your business.
• Ask and be willing to pay for advice from your accountant, auditor, lawyer, banker, broker and other specialists.  They can become important business partners and help you succeed.
• Run your business ethically and ensure you adhere to all the laws and regulations.
• Keep proper records of your transactions and always know where you stand financially.
• Cash is king and so are your customers and clients.
• Make sure you deliver a quality product or service.
• Treat your employees fairly and with respect.

Next month I will be discussing business formats and the major laws and regulations that may have an impact on your business.

YOUR SMALL BUSINESS - Short synopsis of presentation made to Gordon's Bay Business Forum network lunch on 13 April 2012.  Contact us for more detailed advice as there may be conditions attached not mentioned in this speech.

Tips for your business
• Stay on top of your finances; ensure your accounts are up to date on a monthly basis.
• Ensure you get your debts in as quickly as possible, try to delay payment of creditors without jeopardizing credit record and relationship
• Seek professional help when required
• Do SWOT analysis and concentrate on strengths – eliminate weaknesses
• Cut costs and be productive
• Quality product and service – retain customers!

SARS developments
• Employers tax season till 31 May 2012 – IRP5 and reconciliations
• Fake audits and refunds emails and telephone calls
• SARS compliance program to catch defaulted will concentrate also on small business, construction sector and high net worth individuals
• Administrative penalties of minimum of R250 (up to R16 000) per month and the interest and penalties(300% max)
• Free workshops at SARS or at workplace on income tax, provisional tax, VAT, PAYE, small business tax
• Retention of documents for at least 5 years or 7 years if a company

Individual tax
• Medical aid credit – R230 first two, then R154 credit after tax calculation to benefit lower income earners as
• Transfer duty of property out of trust without CGT and transfer duty implications till end of this year
• Retirement contribution changes in 2014 allowing up to 22.5 with R250 000 limit if younger than 45 or 27.5% deduction with R300 000 limit if older
• Capital gains tax inclusion rates increased significantly and effective rates are now 13.3% for individuals, 18.6% for companies and 26.7% for trusts
• Logbooks if receive car allowance

Businesses tax
• Dividend tax at 15% to be withheld by company. Tax free in hands of individual
• Small business corporations at 28% above R350 000 but first R64 000 tax free only for business all members  only involved in one business and turnover less than R14 million and not a personal service company
• Micro enterprises at 6% maximum based on turnover and turnover is less than R1 million.  Includes income tax and VAT

Companies Act
• No more CC but can continue and can convert to company
• CC to continue with accounting officers report (will be beter if change to company)
• Must change Articles with incorporation within two years
• No more audits under certain circumstances – owner managed companies and PIS less than 100.  Independent reviews.
• Changes to current Articles recommended relating to audit, transfer of shares and annual general meeting by special resolution.

Consumer Protection Act impact on all customer contracts, advertising, interaction with customers and clients

Public Access to Information Act (PAIA) disclosure document deadline December 2015.  You can specify what and how public will access to some of your documents and information

National Credit Act regulates interest rates that can be charged on overdue amounts (2% per month)

Labour Acts and regulations – new developments relating to labour brokers and high income earners

Prevention and Combatting of Corrupt Activities Act duty to report to Police if above R100 000 otherwise guilty to an offence.  You, your accounting officer and auditor also has duty to report


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