April 2011

INTRODUCTION

The upcoming municipal elections offer voters the opportunity to cast their vote to ensure that they put in place the ward councillor that is best qualified to influence programmes that will result in business growth and, thereby job creation. We urge you to use your vote with that in mind.

TECHNOLOGY

An Excel spreadsheet consists of workbooks. In turn, these consist of worksheets that are represented by tabs at the foot of the screen. In a workbook not all the sheets necessarily contain data. To copy the contents of a sheet that does hold data to an empty sheet, hold down the CTRL key and drag the sheet to the location of an empty sheet. All name ranges will be copied by this method. If you do not want to duplicate the name ranges, in the sheet to be copied, click on the selection square. This is the square above row 1 and to the left of column A. The entire spreadsheet will be highlighted. Right click and select copy. With your cursor in cell A1 of an empty sheet, right click and select paste. Of course, if you need the data in another location within the empty sheet or, for that matter, a sheet that already contains data, you may paste it to the required location.

TAXATION

Submission of tax returns

We have obtained further clarity on which taxpayers will be exempted from submitting tax returns. The following should be read in conjunction with the article on this subject in our last issue.

In terms of the current SARS practice, any taxpayer that derives remuneration of less than R 120 000 from a single employer and earns no income from any other source is relieved of the obligation to submit a tax return provided that any allowance received by the taxpayer is subjected to PAYE on the full amount. Thus a person who is in receipt of a travel allowance, which is subject to PAYE on 80% thereof, will not be permitted to take advantage of the exemption.

However, in certain circumstances, it may not be advantageous to take advantage of the exemption. If a taxpayer contributes to retirement annuity funds or to a medical aid fund and his/her employer does not take these deductions into account when calculating the employee’s PAYE deduction, it may be that a refund would result should a return be filed with SARS.

Therefore, we urge taxpayers who qualify for this exemption to provide us with their IRP5 and retirement annuity and medical aid contributions certificates, so that we may determine whether a refund in excess of preparation costs will result.

Request for change to bank details

SARS has advised that one of the biggest risks that the organisation has to address is fraudulent changes to taxpayers’ bank details. In an effort to contain this, SARS will no longer accept changes that are submitted via fax, post, drop-box or e-mail. Neither will holders of powers of attorney be able to affect these changes on another’s behalf. Therefore, the only acceptable means of amending bank details are:

• The taxpayer to attend in person at a SARS branch
• Via SARS Efiling, for registered eFilers (not yet available)
• When submitting Income Tax Returns (ITR12 or IT14) or the EMP501 Employer declaration

If the first option is used, individuals will be required to provide:

• Their income tax number
• An original identity document/passport and a certified copy thereof
• An original bank statement that confirms the account holder’s name, the account number, the branch number and branch code. This document must bear the bank’s stamp.
• Original proof of residence, e.g. a utility bill in the name of the individual. The bill must be not more than three months old. In the case where this cannot be provided, for example, where these accounts are in the name of a landlord, a form entitled Confirmation of Entity Residential Address (CRA01) must be provided. This form is available on the SARS website and from our offices

In addition, Companies must supply certified copies of their Certificate of Incorporation. Close Corporations must supply a certified copies of its Founding Statement and Partnerships a copy of the partnership agreement. These entities must also supply proof of the identity of their nominated representative and all the other requirements that are needed for individuals.

DEADLINES

Voluntary Disclosure Programme – 1 November 2010 to 31 October 2011

Annual Duty – end of the month following incorporation date

EMP 501 (PAYE Reconciliation) - 2011 – 3 June 2011

EMP 501 1^st period  2012 – 31 October 2011

New Companies Act – no new CC registrations – 1 May 2011

Disposal of a residence from a company or trust – 31 December 2012

ECONOMY

Many cities across the United States and Europe are facing bankruptcy. In other words, the funding requirements exceed their collections and they have resorted to borrowing from financial institutions in order to fund the deficit. The consequence of this situation is that those municipalities are having to curtail or reduce certain essential services such as refuse collection and policing. This can have disastrous affects on many aspects on the lives of the inhabitants.

Evidence of similar problems in our own country is slowly emerging. An example is the degradation of the roads within the suburbs and the delay in attending to them. Should the impact of these budget restraints extend to health and security, the consequences would be dire indeed. Therefore, it is in the interest of each ratepayer not only to pay his dues promptly but also demand a local government that is free of corruption and subject to sound financial management.

On a national level, concern has been expressed regarding the rise in food and oil prices and the impact that these aspects will have on the inflation rate. The SA Reserve Bank is monitoring this very closely and some commentators have expressed the view that a small hike in interest rates will occur when next the Monetary Policy Committee of the SARB meets. Those clients with a heavy mortgage burden should consider fixing the interest rate on their borrowings.

BUSINESS
Service excellence is what distinguishes successful businesses from the mediocre. Therefore, to succeed a business needs to formulate a service policy that is understood by all front line staff that should be encouraged to go the extra mile in implementing the policy. The policy should be designed in consultation with your clients. In other words, find out what your client requires of you and then decide just how far you are prepared to satisfy that requirement. Once you have made a commitment to your client, deliver on that promise.

A section on after sales service should form an integral part of the policy. Included in that section should be the policy regarding the return and repair of damaged goods. Personnel should be fully familiar with that policy and be encouraged not to treat clients in an adversarial manner when goods are returned. In addition, a few days after the goods have been replaced or returned, the client should be contacted to determine whether he/she is satisfied with the goods.

Client satisfaction ensures a loyal client base. It is cheaper to retain an existing client than to recruit a new one.

THE COMPANIES ACT

With the new act that is due to come on line on 1 May, it may be worthwhile to examine some of the features of the legislation.

The Act provides for two categories of companies, i.e., non-profit and profit companies.

The first of these are companies that are incorporated for a public benefit purpose. In our sphere of operations, these entities are seldom experienced.

The second category is one with which we will all come into contact. It comprises a further two categories. Firstly, companies that have no restrictions on the transfer of shares or on the offering of those shares to the public, i.e., public companies. The second of the companies in this category are those that place restrictions on the transfer of shares and prohibit the offer of shares to the public. These are known as private companies. This type of company will be the type more likely to be of interest to our client base. The Act is less stringent in its application in relation to these companies and, in particular, to those where all shares are owned by related persons or where all shareholders are also directors. Certain private companies that meet criteria that indicates a significant public responsibility will be required to be audited. The financial statements of all other companies must be voluntarily audited or independently reviewed.

TAILPIECE