Small busi­ness wake-up call

Don’t fall into the trap of not declar­ing your taxes

Sunday World - - Jobs - Nonhlanhla Zaba

As a fol­low-up to our pre­vi­ous ar­ti­cle re­gard­ing know­ing your busi­ness, now comes the most im­por­tant part of the busi­ness: Tax.

Small busi­ness own­ers take ad­van­tage and do not want to get the pro­fes­sional ac­coun­tants to as­sist them. They end up ow­ing the SA Rev­enue Ser­vice (SARS) a lot of money and, to some point, de­cide to shut down their busi­nesses.

Most small busi­ness own­ers do not un­der­stand the im­pli­ca­tions of not com­ply­ing with SARS which could re­sult in their fail­ure to sub­mit an­nual tax re­turns.

There are var­i­ous tax re­quire­ments to con­sider when sub­mit­ting re­turns.

● Sole pro­pri­etor­ship: the owner must in­clude busi­ness in­come in the per­sonal an­nual tax re­turn as you do not regis­ter it with SARS. All prof­its and losses ac­crue to the owner be­cause you and the busi­ness are seen as one per­son, there­fore you will be li­able for in­come tax as an in­di­vid­ual.

● Part­ner­ships: each part­ner is taxed on their per­sonal ca­pac­ity as well as on their share of tax­able prof­its, also you will be li­able for in­come tax.

● Pri­vate com­pany: this is a sep­a­rate en­tity to the owner as it is a tax­payer on its own. There are few fac­tors that guide you to know which tax you will be li­able for, such as your turnover or pay­roll.

It is ad­vis­able to get reg­is­tered ac­coun­tant and tax pro­fes­sion­als to as­sist you with your book­keep­ing and sub­mis­sion of your an­nual tax re­turns as they will be able to ad­vise on min­i­miz­ing your tax. The other im­por­tant as­pect that most busi­ness own­ers pass is in­sur­ance.

When you take out a loan there must be a risk pol­icy to use as surety so that when some­thing hap­pens you know that your com­pany is safe. Also, as em­ployer you will need to sort out is­sues around the UIF, em­ployee ben­e­fits and med­i­cal aid.

■ Zaba is the owner of Tokoloho Fi­nan­cial Ser­vices, an in­sur­ance bro­ker­age. She is also the co-au­thor of Save In­vest Pros­per and is an ex­ec­u­tive mem­ber of the Fi­nan­cial Ser­vices In­ter­me­di­aries Net­work, work­ing on pol­icy in the in­sur­ance in­dus­try.

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