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SMEs: Don't leave your tax submissions too late


Johannesburg, 05 Feb 2019
Read time 3min 30sec
EasyBiz Technologies Managing Director, Gary Epstein.
EasyBiz Technologies Managing Director, Gary Epstein.

It is critical for small to medium enterprises (SMEs) to be properly prepared for the upcoming tax season. This means keeping abreast of amendments to tax regulations and affording the business enough time to adjust to any changes.

EasyBiz Technologies Managing Director Gary Epstein says last year's VAT increase had a significant psychological impact on the South African market. After the initial shock of the increase, as there hadn't been a VAT increase in 25 years, most businesses adapted quickly.

"Anti-avoidance rules for trusts to address evasion of donations tax and estate duty through the transfer of assets to trusts on loan account also made waves in 2017 and 2018," he adds.

Businesses that do not keep abreast of regulatory changes may find themselves scrambling to ensure compliance at the last minute. This is why it is important for taxpayers to pay careful attention to the finance minister's annual budget speech and acquaint themselves with any changes.

Epstein says there really is no excuse for not knowing what is going on. "Just about every media house, financial services organisation or legal firm takes it on themselves to summarise the highlights of the speech in layman's terms or product booklets aimed at keeping assisting individuals and businesses apprised of the most important considerations.

At EasyBiz, we make the process easier for our customers by providing them with a tax guide, tax calculator, as well as a succinct pr'ecis of the Budget Speech straight after the Budget Speech has concluded."

He offers several tips to SMEs as they prepare for the upcoming tax season:

Pay, don't play

SMEs must ensure they have sufficient cash flow to make the necessary provisional taxes and assessed tax payment, even in these difficult economic times. "Gone are the days of pulling the wool over the taxman's eyes; SARS is one of the best revenue services in the world, so my advice is 'pay, don't play'," says Epstein.

Get help from a tax specialist

The average small business owner has limited tax knowledge and South Africa's Income Tax Act can be quite complicated and overwhelming. If the business doesn't employ a competent financial expert, it should consider engaging the services of a tax specialist. An expert would be able to provide the necessary tax advice, possibly saving the business thousands in taxes.

Use SARS online resources

Preparing income tax and provisional tax returns can be a daunting task. SARS provides taxpayers with excellent and user-friendly guidelines on how to complete the various returns. These can be found on the SARS Web site at http://www.sars.gov.za/TaxTypes/PIT/Tax-Season/Pages/default.aspx.

Address SARS queries timeously

SARS audits more companies and individuals annually than ever before. This is why it is imperative that all SARS queries are addressed timeously and accurately to avoid penalties and interest.

Apply for small business tax allowances

Small businesses are afforded favourable tax rates by SARS if they meet various criteria, for example, a turnover of less than R20 million. "This can be a saving grace for small businesses, but it is not just awarded to any small business. Business owners need to do their homework, establish what the necessary criteria are and apply for the better tax rates," explains Epstein.

Keep financials up to date

Epstein says business owners should be on top of their financials at all times. "A good system such as our QuickBooks offering will give the accountant or auditor the necessary ammunition or data to complete tax returns efficiently. "Our software, in particular, offers some of the best, most detailed and user-friendly reporting functionality that allows accountants to pull VAT reports, making their lives much easier when it comes to submitting tax returns," he concludes.

Editorial contacts
Eclipse Onela Z Mafu (0861) 325 472 onela.mafu@eclipsepr.co.za
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