SARS Matters & Directors: November Newsletter
/We want to congratulate both Grizelda and Ntsako in our team! Both lovely ladies got married recently 🎉
In the accountancy SA magazine for November, there was a brilliant piece on the CEO of Deloittes Africa, Ruwayda Redfearn where she describes what it means to be a leader.
As you know Anlo as a company loves using coaching techniques in our everyday work and life, and we thought her story and advise was really powerful so we thought we would share our highlights
She pointed 5 things out that we thought we would quote here:
Earn a reputation as a problem-solver - Be good at your job but be willing to go above and beyond to help. Choose to succeed and use your skills to help the team overcome their challenges
Don’t check your job description − Instead, strap on your helmet and volunteer to help the team.
Make your bias towards action - Spend your energy providing direction and decisions for those who point fingers and wait. By understanding the information, you can absorb it and then act. Ask: ‘Is there something I can do right now that will bring value?’
Focus on helping other people win - Empower them to get better at solving their own problems. Harnessing and optimising other people’s skills to make them better takes more energy but creates more winners.
A rising tide lifts all boats − By helping others improve, the company improves, and everyone wins.
SARS Matters
For the years of assessment ending on 31 March 2023 and later the rate of Corporate Income Tax payable is 27%. This means the February 2023 financial year end of most companies will be the last tax year where 28% corporation tax will be charged.
We are entering the holiday season in South Africa, and we would like to encourage provisional taxpayers to remember to put monies aside for the February 2023 provisional tax return. Even better if you can update your accounting records, and do a provisional tax calculation and keep a provision for corporation tax aside. If you would like us to assist you in the calculation or planning process, please get in touch.
There is a problem on the ITR12 (Income tax return) when an individual wants to update their non-residency status. In the past, individuals could update their tax residency status on the ITR12, but from 2022, this now needs to be updated through a RAV01 form. The RAV01 form first needs to be updated before the 2022 ITR12 is submitted. The RAV01 information is supposed to pull through to the ITR12 but at this stage it doesn’t. SARS is following up on this.
We would like to remind our clients of the difference between capital and revenue rules and when expenditures are deductible for income tax purposes or capital gains purposes. There are 3 tests to use:
‘Once and for all’ – If an expenses is only going to be incurred once, then it could be possible that the expense is of capital nature
‘Enduring benefit’ test – when an expense is incur to bring into existence an asset or an advantage for the enduring benefit of a trade
Income earning structure versus income earning operations test. This is important as expenses are deductible for income tax purposes and decreases your corporation tax liability and capital expenditure forms part of the cost price of an asset.
Claiming input VAT - We would like to encourage our clients to make use of Hubdocs or Xero to send their invoices to us. This helps us allocate and process your accounts more accurately but it will also help you when you do get audited by SARS.
Let’s refresh the basics about VAT
In terms of section 7 of the VAT act, VAT is levied on the supply of goods or services by any vendor in the course or furtherance of any enterprise.
The VAT act says that a VAT vendor may charge VAT on the supply of goods or services. Where a VAT vendor buys or acquires goods or services and the price paid includes VAT, this VAT is then referred to as input VAT and can be deducted from the output VAT that is charged on goods and services.
VAT is not the business’ money. It is SARS’ money.
BEST PRACTICE: Set aside the VAT portion of cash received from clients
For VAT to be added in terms of the VAT Act, there must be a supply of goods or services in the course or furtherance of an enterprise for consideration.
Businesses who have a turnover of R1000 0000 and over have to register for VAT. You may also voluntarily register for VAT if your turnover exceeds R50 000.
Executive and Non-Executive Directors
Written by Roulon du Toit
Both executive directors and non-executive directors (NEDs) may earn income from the companies in which they hold office. However, the tax treatment of these earnings—and the related expenses incurred—vary greatly between these two types of directors.
