Top ten tips for maintaining a strong cash flow

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	22A Church Street DURBANVILLE 7550	Tel: 021 970 4600 Fax: 021 975 6780 Email: info@sdkca.co.za
Website: www.sdkca.co.za

2023 FIRST PROVISIONAL TAX RETURNS AND PAYMENTS DUE 31 AUGUST 2022

August sees the first provisional tax deadline for 2023 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:

Provisional tax is not a type of tax, it should rather be seen as a pre-payment of your income tax.
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.
It is highly recommended that the taxpayer should not submit an estimate which is less than the basic amount.
Payments to SARS should be made by 29 August 2022 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:

Electronic Transfer (EFT)
Making payment at your bank using the tax statement as proof
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 then basic amount. The type of supporting documentation that you should have ready should it be requested from SARS is:

Current year management accounts used to calculate the estimate income
Tax Computation
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 2022 NEWSLETTER

Top Ten Tips for Maintaining a Strong Cash Flow

Cash flow has been called the ‘lifeblood’ of a business, and all business owners can attest to the harsh reality that cash flow can make or break a company, particularly in the still-constrained financial circumstances of the post-pandemic business world, in which inflation and rising interest rates are creating further cash flow challenges.

Given the crucial importance of proactively managing the cash flow in your business – and the fact that it is one of the biggest challenges most business owners face - we share in this article ten top tips you can implement in your business immediately to maintain a positive cash flow and ensure adequate cash flow reserves are always available as the end of the year approaches.

The Importance of a Good Credit Score

Credit. If you own your own business, it's very likely you already understand the valuable role that having a good credit score can play in a person's private life, but it is just as valuable for your small enterprise.

Business credit is one of the most important tools in any entrepreneur’s toolkit. Building a good credit reputation helps the business qualify for credit facilities such as business credit cards and loans, and can open up many other funding opportunities. Your business’ credit begins when you register your new company and is likely to become an important aspect of your success.

So how can you build your credit score to ensure you have the best possible score when the time comes that you need it?

Choosing Accounting Software for Your Small Business

When it comes to managing a small business, no tool will be as important as your accounting software. Accounting software allows entrepreneurs to track accounts receivable and accounts payable, have a clear understanding of their profitability, and be prepared for tax season, all of which are essential for keeping cash flows intact and fulfilling obligations.

There are, however, a myriad of accounting software solutions available on the market, most of which have features or services a small company may never use. Investing in the wrong accounting software can be like going to the dealership for a small runabout and coming home with a Ferrari. So where does a small business owner begin and just what should they be looking for when it comes time to buy this vital piece of software?

Is Your Trust Registered and Ready for Income Tax?

SARS recently issued a reminder that all trusts – whether dormant or active - need to be registered for income tax, and that the trust income tax return must be filed by the applicable 2022 tax season deadline dates.

Many business owners and individuals have trusts, set up to manage and protect assets for nominated beneficiaries, for example, holding the shares of a business or the title to a property.

In this article, we look at why trusts are used by business owners, how trusts are taxed, how the tax return for a trust must be completed and submitted, and why assistance from an accounting and tax practitioner is essential to avoid the many potential pitfalls, as well as the penalties and interest that will be levied for late returns, late payments, and non-compliance.

Your Tax Deadlines for August 2022

5 August – Monthly Pay-As-You-Earn (PAYE) submissions and payments
25 August - Value-Added Tax (VAT) manual submissions and payments
30 August - Excise Duty payments
31 August - Value-Added Tax (VAT) electronic submissions and payments & CIT Provisional 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 professional, detailed and appropriate advice.

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