Written by Roulon du Toit CA (SA)

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.

In 2017, SARS released two Binding General Rulings (numbers 40 and 41) which provided more clarity on the treatment of NEDs.

SARS is doing auto assessments on taxpayers based on the information that they have received from 3rd parties i.e., banks, medical aids, investment companies etc. If this is your only source of income and you don’t have additional deductions, then you don’t have a problem and it is great that your tax return has been filed.

The 2021-2022 tax returns are open and ready to be filed to SARS.

Please send us all your documents as soon as possible if you would like us to file your return.

If you get an auto-assessment from SARS, please don’t just accept it. Read through and make sure you amend the submission before it is too late. Please remember that your auto assessment will not include all the deductions that you are entitled to. If you would like us to check your auto-assessment, please get in contact with us.

Written by Roulon du Toit

A lot of South African taxpayers are unaware that they could reduce their taxable income if they made donations to Public Benefit Organisations. When a South African resident makes a donation, it is important to realise that there are tax consequences which may lead to either an increased tax burden or tax relief.

First, it is important to note that donating may attract a Donations Tax liability. This is something that taxpayers are unaware of and can be quite costly. We will not be exploring this in this blog, but be aware that if you donate cash (or any other asset) there may donations tax, especially if the value exceeds R100 000. For example, if you purchase a car and then transfer ownership to your child it will likely attract Donations Tax.

If you are registered as a company or sole proprietor in South Africa, you can choose to pay either standard small business income tax rates or elect for turnover tax. Turnover tax is a simplified tax rate aimed at reducing administration for small businesses with an annual turnover of less than R1 million. If your turnover goes over R1 million, then you will need to register for VAT and pay tax on the standard tax rates.

You can be registered for turnover tax and also be registered for VAT (voluntary registration).

To make record keeping easier, the turnover tax system automatically estimates a company’s business expenses when calculating taxable income. This means businesses registered for turnover tax don’t need to track and report their tax-deductible expenses.

In May we celebrated Esmeralda’s birthday the Anlo way, with lots of cake, sparkles and love! If you ask her, she is 37 years old but to us, she doesn’t look a day older than 21, but with the wisdom and leadership of a life well lived. Thank you Esi, for everything you do and here is to another wonderful year for you.

We also raised money for slipper day at Anlo and here is a photo.

Annja and Roulon recently went to Accountex in London and it was amazing seeing the new developments that have happened since 2019, when we last visited. Regulations and governing bodies have made compliance for accountants stricter, but the standard of the accounting qualification is just getting better.

Now more than ever, the focus is on accountants helping businesses grow and helping the economy recover from what has been a very long hard period in everyone’s lives.

Esmerelda and I recently took ourselves on a week sabbatical to Dubai with our little girls, and it was AMAZING! Thank you to everyone that was patient with us during this time. We planned this break probably a year ago, with the hope that it will give us something to look forward to, and because of COVID and everything we kind of forgot about it because there was a chance we could not go, and we did not want to get our hopes up.

But we did manage to go, and it was so definitely needed. The break from the routine that has become a burden over the last 2 years was exactly what the doctor ordered. We swam in the sea and talked about the business’s future, about our hopes and dreams for ourselves, our families, and our business.

Written with Roulon du Toit

During the 2020 Budget Review, the government indicated that it intended to decrease the corporate tax rate by one percentage point from 28% to 27%. It has now been confirmed that this decrease will take place, effective for tax years ending on or after 31 March 2023. In other words, this will apply to any company whose tax year commences on or after 1 April 2022.