Congratulations on registering your company. The question on most minds is now what? Some of these questions may have come to mind:
- What is required from me in terms of the laws and regulations in South Africa in order to keep my
- Do I need to register for VAT?
- How often do I need to do my company taxes?
- Is there a difference between my personal taxes and my company’s tax if I am the only employee at
- How often do I need to pay PAYE?
- What is provisional tax?
… and many more questions.
Here’s a quick guide to the basics for having your own company.
CIPC: Every year you will be required to submit your annual return to CIPC and pay a small fee based on your annual turnover. The annual return is a statutory requirement in terms of the Companies Act of South Africa. If this return is not lodged every year, this can lead to your company being deregistered.
If there are any changes to the details that were used to register your company, i.e. change in directors, change in registered address etc, these changes will need to be submitted and filed with CIPC.
How can we help you: Smith and Rossi will file your annual return each year and update any required changes to your company with CIPC to avoid non-compliance with the Companies Act.
SARS: There are a few statutory requirements involving South African Revenue Services (SARS), see each summary below.
Income and Provisional Tax – Companies:
Provisional Tax: Provisional tax is merely a method used by SARS to ensure timely collection of income taxes. Therefore, income tax and provisional tax is one in the same.
1st Provisional Tax Submission: By the last day of the 6th month of your financial year, you are required to submit your first provisional tax return to SARS, and make your first payment if required. This is based on either the previous assessment or your estimated taxable income for your financial year.
How can we help you: Smith and Rossi will calculate and submit your 1st provisional tax return. We will calculate the first payment taking into account all considerations.
2nd Provisional Tax Submission: By the last day of your financial year, you are required to submit your second provisional tax return to SARS and make payment if required.
How can we help you: Smith and Rossi will calculate and submit your 2nd provisional tax return. We will calculate your company’s estimated taxable income for your financial year taking into account all considerations to ensure that your total taxable income as disclosed to SARS is as accurate as possible.
3rd Provisional Tax Payment and Income Tax Return Submission: This is a top-up payment if there has been an under-estimation of income tax. If the estimate has been underestimated by too large a figure, penalties and interest can occur. Therefore it is imperative that the provisional tax calculations are done to be as accurate as possible.
How can we help you: Smith and Rossi will complete your income tax return and submit it to SARS. The income tax calculation takes into account all adjustments per the Income Tax Act. It is important that all applicable deductions and inclusions are considered during the calculation of the 2nd provisional tax return, in order to avoid penalties and interest.
VAT: A company is only required to register for VAT once it has reached a turnover of R1m for a period of 12 months. However, you may voluntarily register for VAT. If you have not yet reached the R1m threshold, you will need to consider from a business strategy point of view if you should voluntarily register for VAT.
How can we help you: Smith and Rossi can help you in the consideration of voluntarily registering for VAT. Once you decide to, or are required to register for VAT, we can assist in the registration process. We can also do the VAT reconciliation, return and submission as required by SARS, be it on a monthly or bi-monthly basis.
PAYE (Pay As You Earn): All employees and personal service providers as defined per the Income Tax Act are subject to PAYE deductions when remunerated. An EMP201 is prepared monthly and the payment of PAYE, UIF and SDL (if applicable) are then paid over to SARS by the 7th of the following month.
How can we help you: Smith and Rossi can manage your monthly payroll, which includes the EMP201 submission.
In addition to the above statutory requirements, we can provide you with monthly management accounts, budgeting and cash flow analysis and so much more.
Let us take the reins on your accounting and tax needs, giving you more time to do what you love and focus on your core business.
Contact Smith & Rossi today to set up a consultation.