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2013 SARS Employer Filing season is now open

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03/04/2013

SARS has announced the annual PAYE reconciliation submission season for the period 01 April – 31 May 2013.

All South African employers are required to reconcile and submit PAYE, UIF and SDL contributions for the period 01 March 2012 to 28 February 2013. SARS requires employers to submit accurate and complete employee tax certificates and a reconciliation of contributions for the year.

The first step for companies is to ensure that they download the latest version of the e@syFile™ Employer system from the SARS website www.sarsefiling.co.za.

“It is critical that companies download and install this software before conducting their PAYE, SDL and UIF reconciliations to ensure accuracy and compliance with SARS requirements,” says Philip Meyer, technology director at payroll and HR software specialist Sage Pastel Payroll & HR.

Companies must take note that any information submitted using a previous version of the e@syFile™ Employer system, will not be accepted by SARS.

Companies are advised to backup their current information on their computers prior to installing a new version of e@syFile™ Employer, as the installation may delete the current information.

SARS will reject tax certificates that do not have an income tax number and the e@syFile™ Employer system will issue the submitting company a message declaring that penalties can be raised on the employer as a result of the missing information. Employers must confirm the company’s assent to the SARS penalties procedure before their companies can continue with reconciliation and submission. SARS also intends increasing employer penalties applying to employee tax certificates that do not have a registered tax number.

If companies want to register employees for a tax reference number, they can either go into a SARS branch, or they can log onto the e@syFile™ Employer system and load their employees manually. To follow the verification status of the tax reference number, companies can use the ITReg functionality of the e@syFile™ Employer system and follow a synchronisation process to obtain a CSV file with their employees’ tax reference numbers.

Companies using an automated payroll software solution can obtain employee tax reference numbers via the Bulk ITREG functionality and the e@syFile™ Employer system to simplify the reconciliation.

Those using automated payroll solutions need only capture employees’ information and their payslip details.

During the year end procedures, the electronic tax certificates are generated automatically in the IRP5.13 file. This file can be imported directly into the e@syFile™ Employer system and the payroll EMP501 Reconciliation Report to complete the PAYE, SDL and UIF reconciliations. Meyer emphasises that this saves businesses considerable time and cost compared to manual calculation and capturing to complete the PAYE reconciliation submission.

“Companies are advised to submit sooner than later, to provide them with ample time to rectify any reconciliation problems,” says Meyer.

Nifty Links to assist Companies:

Download the latest e@syFile ™ Employer System, click here.
Attend a SARS e@syFile Workshop, click here.
What is eFiling? Read more.

For the latest legislative news, connect with Sage Pastel Payroll on Twitter (Payroll News) or LinkedIn.

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Softline Pastel launches portal for its cloud applications

Filed under: Latest News, SME/SMME — 2 Comments

06/11/2012

Softline Pastel, South Africa’s leading developer of business and accounting software, today launched a portal for its range of online applications. The platform, known as Sage Pastel Online, provides the entrepreneur on-the-go one central location to access the company’s bouquet of cloud-based business tools, making running a small business a little easier.

Pastel Accounting launched South Africa’s first online accounting program, My Business Online, in May 2009 and since then has brought several online innovations to the local SME market.

“Times have changed,” says Steven Cohen, managing director of Pastel Accounting. “We have entered an age where technology is pervasive, allowing us more mobility than ever – and business has to be part of the revolution to remain competitive.”

The portal can be found at www.sagepastelonline.com and offers online accounting, payroll and marketing services – allowing business owners the freedom to run their businesses at any time from anywhere. Additionally, Pastel’s BEE one-stop-information-hub, BEE123 and brand new free-to-all-users personal finance applications are also available in the same location.

Pastel My Business Online is a full-function accounting program, designed specifically for the small business owner. All accounting lingo has been changed to simple English, so even the layman can manage the business’s books. It’s a multi-user system with dashboards, graphs and drill-downs to source transactions that provide a bird’s eye view of the business. The system allows users to manage customers, suppliers and inventory items and keeps track of sales and purchases. It comes with a comprehensive list of reports so that month-end management packs are quick and easy to create.

Pastel My Payroll Online is a simple payroll solution that allows SME owners to pay their employees anywhere, anytime. It’s a SARS compliant system aligned to even the most complex legislation, including PAYE and UIF. Users can also process leave online with leave types already defined according to the BCEA requirements. Like, My Business, My Payroll contains no confusing jargon.

Did you know 70% of SMEs don’t have a website, or at least one with limited marketing capabilities or integration with smartphones and social media. Pastel My Webspace is an online marketing engine for SMEs with an HTML5 website builder designed for optimal marketing and e-commerce capabilities. In addition My Brand will manage users’ search engine optimisation, and mobile and social media integration. My Brand effectively integrates everything for the user and provides an all-in-one e-marketing service with analytics, social media insights, and creating and mailing a fully dynamic newsletter with marketing feedback.

“Moving your business applications online is a must for anyone who wants to ensure that they remain at the cutting edge of service delivery,” said Cohen at the launch event that celebrated the mobile business of the future.

As part of Pastel’s drive for business mobility, it has also formed a relationship with Samsung Enterprise Mobility. Selected Samsung devices will now come preloaded with the My Business Online Android app and Pastel is a reseller of Samsung’s SIII, Note and Tablet devices; all preloaded with a year’s free access to Pastel My Business Online. The devices will be available for purchase via the Pastel Webstore.

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Record keeping is critical

Filed under: Latest News, SME/SMME — Leave a comment

19/10/2012

In some cases, just hearing the words ‘tax man’ or ‘receiver’ can raise the blood pressure of small business owners. There are many ways to ensure your tax return is in order, one of which is keeping your tax submission records safely filed for easy filing and accessibility should you need to refer back.

If you’re a small to medium sized business owner, it’s up to you to maintain records of all documents pertaining to your tax return. These records should not only be kept during the course of the tax year for filing purposes, but you are also required to maintain these records.

According to the SME Toolkit South Africa, the retention periods in terms of the Companies Act and the Close Corporation Act are:

For Closed Corporations (CCs)

DOCUMENT	RETENTION PERIOD
1. Founding statement (form CK1)	Indefinite
2. Amended founding statement (forms CK2 and CK2A)	Indefinite
3. Minute book as well as resolutions passed at meetings	Indefinite
4. Annual financial statements including annual accounts and the accounting officer’s report	15 years
5. Accounting records, including supporting schedules to accounting records and ancillary accounting records	15 years
6. The microfilm image of any original record reproduced directly by the camera – the “camera master”	Indefinite

For Companies

DOCUMENT	RETENTION PERIOD
1. Certificate of incorporation	Indefinite
2. Certificate of change of name (if any)	Indefinite
3. Memorandum and articles of association	Indefinite
4. Certificate to commence business (if any)	Indefinite
5. Minute book, CM25, CM26 and resolutions passed at general/class meetings	Indefinite
6. Proxy forms	3 years
7. Proxy forms used at Court convened meetings 3 years	3 years
8. Register of allotments after a person ceased to be a member (section 111)	15 years
9. Registration of members	15 years
10. Index of members	15 years
11. Registers of mortgages, debentures and fixed assets	15 years
12. Register of directors’ shareholdings	15 years
13. Register of directors and certain officers	15 years
14. Directors attendance register	15 years
15. Branch register	15 years
16. Annual financial statements including annual accounts, Directors’ report and an Auditors’ report	15 years
17. Books of account recording information required by the Act	15 years
18. Supporting schedules to books of account and ancillary books of account	15 years

If you hang on to your records and information, it will improve your accuracy when submitting your tax return and also assist with forecasting should you need to issue a payment to SARS. For more information visit the SARS website at www.sars.gov.za.

Tags: CC, Closed Corporation, Closed Corporation Tax, efiling, efiling login, how long to keep company records, Record keeping, sars, sars e-filing, sars efiling, small business, small business tax, SME, SME record keeping, SME Toolkit South Africa, SMME, submission, tax

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Seeking help with your tax return

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18/10/2012

The submission for manual tax returns has now passed. The deadlines for efiling submissions is the 23^rd of November 2012 and in this post we’ll be exploring why it is sometimes necessary to seek out professional advice with your tax return.

There are many examples of incorrect tax returns which have ended in large sums of money being owed to the South African Revenue Service, and even court proceedings. A recent article on the Moneyweb news website states that in one such case, the tax court in Pretoria had to consider an objection by a tax paying company against assessments issues by a SARS auditor. Of course, SARS had issued this assessment based on the tax return submitted by the company and their accompanying financial statements.

Despite many arguments from the company on if they were suitably qualified to be submitting tax returns on behalf of the business, and other issues, SARS won the case. The court ultimately found that the company had underpaid tax on several fronts and was now liable to pay the outstanding tax as well as the interest on the aforementioned amount.

This is just further proof as to why businesses, large and small, should seek the assistance of professional tax consultants when it comes to that time of the year. The help of a professional might cost far less that the penalties involved in an incorrect tax return.

Tags: e@syFile, EMP501, employee tax certificates, interim PAYE reconciliation, IT3(a), Pastel Payroll, PAYE, Sage Group, Sage South Africa, sars, SARS e@syFile, small business, SME, Softline, Softline Pastel, tax

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The SARS Interim PAYE Reconciliation season is open for all SA businesses

Filed under: Entrepreneur, Latest News, SME/SMME — 1 Comment

03/10/2012

SME companies should brace themselves for the interim PAYE reconciliation that is due from 01 September 2012 to 31 October 2012. Employers are required to fully reconcile and submit their employee tax certificates and EMP501 reconciliation for the period 01 March to 31 August 2012, by the end of October 2012.

Employers need to make use of the new SARS e@syFile software release, e@syFile V 6.1.0. to successfully submit their interim PAYE reconciliations. If they don’t, they will not be able to transfer their data electronically as the new software release will not recognise the old format.

“Companies have no choice,” says Philip Meyer, technology director of payroll and HR software developer Softline Pastel Payroll, part of the Softline Group and Sage Group plc.

Legislation dictates that each and every employee in a company must be registered on the SARS database with their own tax number. Therefore individual income tax reference numbers must be reflected in the interim PAYE reconciliation. If one or more tax certificates do not include the tax reference number, companies will receive an error notification in e@syFile and with effect from 01 September 2012 companies will be penalised.

“New legislation that took effect in March this year means that medical aid contributions are no longer allowed as a tax deduction for employees under the age of 65. The medical aid capped amounts have also been replaced with Medical Aid tax credits. If companies did not make use of the medical aid tax credit method, their submission will be rejected and they will be required to manually recapture the details on e@syFile”, adds Meyer.

A new IT3(a) reason code for tax certificates has been introduced by SARS for non-deduction of PAYE and must be applied on interim tax certificates. Code 08 will indicate a zero PAYE liability due to medical aid tax credits applied. There are also new source codes for fringe benefits and tax deductions that must be applied to interim tax certificates, replacing the consolidated values SARS required prior to the 2012 tax year. Most automated payroll software systems already cater for these codes.

Companies can receive step-by-step assistance from a SARS Contact Centre agent with Help-You-eFile. Help-You-eFile is a new service innovation from SARS which gives companies access to SARS Contact Centre agents online.

For a smooth interim PAYE reconciliation, opt for a reputable payroll software solution that can automate the reconciliation process for the company. Some automated payroll software providers require that users only load their employees’ information and payslips. Therefore no manual calculations are requires and companies can simply upload the file to e@syFile.

For further assistance with the interim PAYE reconciliation season, companies can attend the SARS interim submissions seminar, hosted by Softline Pastel Payroll. Make contact on +27 11 304 4390 or go to seminars@pastel.co.za

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Proposed Changes to Tax Law for Payrolls

Filed under: Latest News — 2 Comments

05/09/2012

By Rob Cooper, Softline VIP payroll and legislative expert

Proposed changes to the Income Tax Act were issued for public comment in July 2012, some of which have a direct impact on employers and computerised payroll systems.

Rob Cooper

One change in particular constitutes a major shift in approach from the legislators, but first, a brief overview of the other changes.

Medical Tax Credit Principle to be Extended

From March 2012, we saw the introduction of medical tax credits (tax rebates) for employees under 65 years of age who contribute to a medical scheme. Changes were also made to the income tax relief granted on assessment to individuals for their out-of-pocket medical expenses subject to certain conditions.

The draft changes now extend the medical tax credit principle for contributions to include those employees who are 65 years of age or older. The values proposed for their tax credits are the same as those currently used for under 65 year old employees, and are based on the number of dependents.

Then the deduction system of income tax relief for out-of-pocket medical expenses has been replaced by a medical tax credit system, with varying degrees of relief for over and under 65 year old employees, and for those who are disabled or with a disabled spouse or child dependent.

What is of concern is that the tax relief granted for medical contributions and out-of-pocket medical expenses has been whittled away by the changes made last year and the proposed changes in the draft legislation, particular for those taxpayers who earn above the 30% marginal tax rate.

Individuals over the age of 65 and those who are pensioners in particular have been hit hard in recent years by dividend tax changes and interest tax relief amongst other measures. A further reduction in the assistance from the state for medical contributions and medical expenses is going to hurt these individuals.

The same can be said for families with a disabled person – surely these individuals deserve more support, not less?

Employment-related Insurance Policies

The taxation of employer-owned insurance policies that impact on employees has been the subject of complex changes to the law over the past two tax years. Just when it seemed that the dust had settled, the draft legislation proposes some more changes that are too complex and too confusing to discuss here.

The words “unintended consequences” again come to mind …

Learnerships

Some fine tuning has been made to the provisions which allow employers a deduction from income of R30 000 at the start and the end of a learnership. These changes address the delays in registration of the learnership with a SETA which can reduce the value of the incentive, as well as the disallowance of the incentive will be limited to learnerships that the employee failed while working for the current employer.

Accrual of Variable Remuneration

One of the pillars that our tax law stands upon is the concept of ‘accrual’.

Amounts are generally interpreted to have accrued when there is an unconditional entitlement to that amount. This causes problems for payroll systems that have to withhold employees’ tax on amounts that accrued in one tax year, but were only quantified and processed in the next tax year. Adjustments to monthly payments to SARS, tax certificates and reconciliations are the inevitable result of adjusting amounts back into a tax year that has already closed.

In one of the most significant changes to employees’ tax requirements in decades, the accrual principle is proposed to be relaxed for variable remuneration items such as commissions, travel payments, overtime and bonuses.

At this early stage, much thought still has to be put into the practical implications of this change, but there is no doubt that it will significantly simply payroll administration over the tax year end for employers and for SARS and is to be welcomed.

Closing thoughts

Lastly, there are some items that have been proposed in the Budget by the Minister of Finance for a number of years and which, while still bubbling away, have not yet made their way into draft legislation.

These include the standardisation of taxation rules for retirement funds, and some changes to the Unemployment Insurance Legislation.

Unfortunately, the political football that the Youth Subsidy has become has been booted into touch, to be replaced by a Job Seeker grant system which has not even been discussed or quantified.

Tags: Accrual of Variable Remuneration, Employment-related Insurance Policies, Income Tax Act, Learnerships, Medical Tax Credit, Minister of Finance, Rob Cooper, sars, Softline, South Africa budget, tax rebates, tax relief, VIP Payroll

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Tax Return FAQ 4

Filed under: Entrepreneur, Latest News, SME/SMME — 5 Comments

28/08/2012

If you’ve been reading the previous posts on SARS submissions, you might know that the deadline is now on the horizon. Manual returns have to be submitted by the 28^th of September, and SARS efiling submissions need to be completed by the 23^rd of November 2012. Of course, if you’re a provisional tax payer, then you have a little more time. Your submission is only due in January next year. In today’s post, we will be addressing tax directives:

What is a tax directive?

Each month, an employer will deduct PAYE and SITE from an employee’s income based on guidelines from SARS. If that employee earns commission as part of his or her income, and the commission is greater than 50% of their total earnings, then that employee could apply for a tax directive.

The directive would fix your tax at a prescribed percentage regardless of what the employee might have earned in that tax year. Ultimately, this results in a tax saving on a monthly basis and an ‘advance’ on what you would have normally received at the end of the year when submitting your full tax return.

How do I go about applying for a tax directive?

As a starting point, consulting with a tax expert would be advisable to ascertain whether a tax directive is viable for you.

Application forms are available for application of a tax directive and are easily accessible at www.sars.gov.za. When applying for a tax directive, the employer must ensure that the correct application form is used to detail the nature of the amount payable to the employee.

According to SARS, to avoid a delay in the issuing of a directive, the following information is required:

Tax year;
Personal detail of the employee
Surname and full names;

Date of birth and ID number or other unique number (e.g. passport number, work permit number or non-resident identity number);
Annual income (e.g. annual equivalent of current tax year’s income or the total remuneration for the last 12 months);
Physical address and postal code; and
Postal address and postal code;

Income tax reference number [if the income tax reference number was not entered, the reason for non-registration (e.g. SITE, unemployed) must be supplied];
Name of employer or fund;
Postal address and postal code of employer / fund; and
Reason for directive (the relevant reason must be marked on the application form).

For more information on directives and to download the relevant forms, visit http://www.sars.gov.za/home.asp?pid=221.

Let us know if you have any questions and we’ll do our best to assist.

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Tax Return FAQ 3

Filed under: Entrepreneur, Latest News, SME/SMME — Leave a comment

14/08/2012

In the post last week, we covered the ins and outs of e-filing via www.sars.gov.za. Now, we understand that there are still those people who prefer to take their manual return and drop it off, or walk into a branch and submit electronically onsite. If this is your preference, today is your day! We’ve included some details below on alternative ways of submitting your return.

In terms of deadlines, you need to know the following:

- If you are taking your information and dropping it manually into a SARS drop box, the deadline for this type of submission is the 28^th of September 2012

- If you are filing electronically at a SARS branch, then the deadline is the 23^rd of November.

Manual filing

If you choose manual submission (completing your tax return in writing) then you need to call the SARS Contact Centre on 0800 00 SARS [7277] or visit a SARS branch and order your Income Tax Return (ITR12). It will then be posted to you. Once you have the form, you can complete it honestly and completely and pop it in the post, or drop it in a SARS branch drop box.

Filing electronically at a SARS branch

First, you’ll need to know where to go, so visit http://www.sars.gov.za/home.asp?pid=2921 and check out where your nearest SARS branch is. The next step is to ensure you the correct documentation for submission.

Checklist for filing your tax return at a SARS branch

Your original ID or passport, plus a certified copy or, in the absence of an ID/passport, an affidavit together with a temporary ID/passport
Original bank statement with bank stamp that is not older than three months
Original proof of residential address not older than three months with your name and residential address (e.g., municipal account)
Medical aid certificates and receipts/retirement annuity certificates
Your IRP5/IT3(a) certificate(s), which you will receive from your employer
Travel logbook (if you receive a travel allowance)
Tax certificates that you received in respect of investment income IT3(b)
Completed confirmation of diagnosis of disability (ITR-DD) (if applicable)
Information relating to capital gain transactions (if applicable)
The approved Voluntary Disclosure Programme (VDP) Agreement between yourself and SARS for years prior to 17 February 2010 (where applicable)
Financial statements (if applicable, e.g., business income)
Any other documentation relating to income you received or deductions you want to claim

Good luck, and post your comments and questions below.

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Tax Return FAQ 2

Filed under: Entrepreneur, Latest News, SME/SMME — Leave a comment

08/08/2012

With today’s post we hope to assist you with your online e-filing return, and answer any questions you might have. We hope you read last week’s post answering the basics, but if you have any burning issues, post your thoughts in the comments section below, and we will endeavour to assist you as quick as possible. Alternatively, connect with us on Twitter: @SageGroupZA

There are various ways to submit your tax return, one of which is online at www.sarsefiling.co.za. The process of online submission is termed e-filing, and the deadline for this is the 23^rd of November 2012 for Non-provisional taxpayers, and the 31^st of January 2013 for provisional taxpayers. E-filing is free and is the easiest and most convenient way to submit your return as it can be done from the comfort of your own home or office.

The steps to submit your return via e-filing are as follows:

Register online for e-filing at www.sarsefiling.co.za to gain secure access to your own tax information. You will need to have on hand your tax registration number, your identity document number and a few other personal details to complete the process. Be careful to follow the instructions as you are able to register as an individual, a tax practitioner or an organisation, and this needs to be correct from the outset
When you have completed the registration process, you will be directed to a page that is already populated with your personal information as well as your IRP 5 information from your employer (if you are registering as an individual)
At this point you will be asked to complete a questionnaire on the first page of the ITR12 which will create the additional fields required to complete your submission
Complete the second and third pages ensuring that your personal information is correct, and completing any fields that might not have inserted information already
At this point you will need to declare you investment income or details of any additional income you made over the course of the tax year – this includes rental income of any sort.
It is required that you outline your medical expenses if you paid your own medical scheme contributions as well as your retirement annuity and income protection payments. Also required is any travel-related claims against your travel allowance.
Once you have completed all of the above, click on the button indicating ‘save online’, and then use the online tax calculator to get an indication of your assessment. When you’re ready to submit to SARS, click the ‘file’ button.
Once submitted, you will receive an ITA34 Notice of Assessment within 48 hours of submission assuming your return was complete and accurate. This notice should indicate if you owe any money to SARS or if you should expect a refund.

If you need more detail, a step by step guide to e-filing is available on the www.sars.gov.za website. Alternatively, post your question below so we can assist! Happy e-filing!

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Tax Return FAQ

Filed under: Entrepreneur, Latest News, SME/SMME — 7 Comments

01/08/2012

As mentioned in a previous post, tax season 2012 is now upon us. Manual returns have to be submitted by the 28^th of September, and SARS efiling submissions need to be completed by the 23^rd of November 2012. Provisional tax payers have a little more time with their submissions due in January next year.

To assist you with your returns, and answer any questions you might have, we will be posting two frequently asked questions on the blog each week for the next few weeks. If you have any burning issues, post your comment in the comments section below, and we will endeavour to assist you as quick as possible. Alternatively, connect with us on Twitter: @SageGroupZA

If you are unsure if you should submit a tax return, or what format it should be submitted in, take a look at the below list.

In the period of 1 March 2011 to 29 February 2012,

Did you conduct any trade* in South Africa?
Did you receive an allowance such as a travel, subsistence or Office Bearer Allowance?
Do you hold any funds or assets outside South Africa that have a value of more than R50 000?
Did you have a local Capital Gain/Loss exceeding R20 000?
Did you receive any income or Capital Gain in a foreign currency?
Do you hold any rights in a Controlled Foreign Company?
Did you receive an Income Tax Return or were you requested to submit a Income Tax Return for the year in question?

If you answer yes to any of the questions, you are required to submit a tax return.

There are three ways to submit your return:

eFiling: The most convenient and quickest way to do it
Filing electronically at a SARS branch
- Completing your return in writing and posting it to SARS or popping into a SARS drop box

Next week we will cover the ins and outs of eFiling, but if there is something you urgently need to know, get in touch with us below.

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