‘Working from home’ again became a government directive at the end of June, as the third wave of Covid-19 swept across the country and an adjusted Alert Level 4 lockdown was imposed on South Africans.

It again brings to the fore the question of how to deal with the expenses of setting up and maintaining home offices, which many employees are now incurring either because they are working from home by choice, or because they are compelled by government to do so unless it is ‘absolutely necessary to perform work on-site’. 

Find out when home office expenses can be deducted from your taxes; what can and cannot be deducted; the pitfalls to avoid if claiming these expenses; and why a cost-benefit analysis is crucial to ensure the right decision is made whether to claim or not. 
 


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22A Church Street
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  Tel: 021 970 4600
Fax:  021 975 6780
Email: info@sdkca.co.za		  
Website:  www.sdkca.co.za 
 

 
     
  2022 FIRST PROVISIONAL TAX RETURNS AND PAYMENTS DUE 31 AUGUST 2021

August sees the first provisional tax deadline for 2022 of all registered provisional taxpayers with February year ends.

While SDK is in the process of working with you to determine your first provisional tax payment and to ensure compliance with SARS, here are a few factors to consider:

  1. Provisional tax is not a type of tax, it should rather be seen as a pre-payment of your income tax.
  2. The first provisional tax period is generally an estimate of what you anticipate your taxable income to be in the next tax year of assessment.
  3. It is highly recommended that the taxpayer should not submit an estimate which is less than the basic amount.
  4. Payments to SARS should be made by 27 August 2021 to limit the risk of payments be deemed late.

SARS PAYMENT METHODS

Please note that SARS no longer accepts payment per cheques. Alternative payment options are the following:

  1. Electronic Transfer (EFT)
  2. Making payment at your bank using the tax statement as proof
  3. Credit push channel through E-Filing

How is the first provisional tax calculated?

Step 1: The total estimated taxable income for the year x the relevant tax rate = Tax payable for the whole year.

Step 2: Then the tax payable for the whole year is divided in half to obtain the portion of tax due for the first six months of the year.

Step 3: Any tax credits (such as employees tax, foreign tax credits and medical tax credits) are deducted from the tax amount calculated in step 2 to obtain the amount that needs to be paid to SARS by 31 August.

SARS verifications and first provisional tax declarations

SARS has started to request supporting documentation for the first provisional tax declarations that have been made, mostly where the declaration is less than the basic amount. The type of supporting documentation that you should have ready should it be requested from SARS is:

  1. Current year management accounts used to calculate the estimated income
  2. Tax Computation
  3. Reasons for amounts used in declaration.

The above list is not extensive, and SARS may request any information they deem necessary to verify the declaration made.


  
     

 
August 2021 NEWSLETTER
Home Office Expenses: To Claim or Not to Claim?

‘Working from home’ again became a government directive at the end of June, as the third wave of Covid-19 swept across the country and an adjusted Alert Level 4 lockdown was imposed on South Africans.

It again brings to the fore the question of how to deal with the expenses of setting up and maintaining home offices, which many employees are now incurring either because they are working from home by choice, or because they are compelled by government to do so unless it is ‘absolutely necessary to perform work on-site’. 

Find out when home office expenses can be deducted from your taxes; what can and cannot be deducted; the pitfalls to avoid if claiming these expenses; and why a cost-benefit analysis is crucial to ensure the right decision is made whether to claim or not. 
read more
6 Tips on Surviving the Failure of a Big Client
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It's no secret that the business environment is tough, particularly for small enterprises where the margins are always a little thin. One late payment from a client can cause consternation, but what happens when that client fails? The chances of one of your major clients collapsing before paying you is very real and sometimes there may not be any warning whatsoever.

This situation can be a death knell for a company that has already spent the expected money. So, when a client goes bankrupt, how do you avoid slipping under with them? Here is a list of six things you can do to ensure your client's misfortune doesn't become your own.
   
read more
Alternative Funding for Your Small Business
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Entrepreneurship has been increasingly encouraged by government in the past few years, as the barrier for entry is continuously being lowered to stimulate participation in business. Funding has however proved to be a high hurdle for entrepreneurs.

When South Africa recorded a 32.6 percent unemployment rate a few months ago, the general concept of entrepreneurship, and small business funding, got more attention than usual. The thought is that small-scale entrepreneurs are underfunded due to the large demand for capital and that new entrepreneurs need to demonstrate their likely ability to stay afloat before any cash injections are directed their way. These two considerations are critical in a country where 70 – 80 percent of small businesses fail within 5 years.   

Let’s have a look then at the funding alternatives available to your small business…
   
read more
Audit Your Employee Taxes, Before SARS Does
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Employers in South Africa are now under increased and intensified scrutiny, with SARS and the NPA teaming up in ‘a joint venture to prosecute’, which will initially focus on non-compliant employers - those that do not file their returns and deduct employee taxes and levies without paying these over to SARS.

Whether employing one or a hundred thousand people, companies in South Africa are compelled to deduct employee taxes and levies every month, declare the deductions on a return and pay the amounts over to SARS, with annual reconciliations, creating a substantial administrative and financial burden, accompanied by stiff penalties for non-compliance. 

Find out here how to conduct an audit of your employee taxes to ensure they are accurate and compliant, and when it is time to call in professional assistance.  
   
read more
Your Tax Deadlines for August 2021
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  • 7 August - Monthly Pay-As-You-Earn (PAYE) submissions and payments
  • 25 August - Value-Added Tax (VAT) manual submissions and payments
  • 30 August - Corporate Income Tax (CIT) Provisional Tax Payments, where applicable
  • 30 August - Excise Duty Payments
  • 30 August - 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 your professional adviser for specific and detailed advice.

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