FEBRUARY 2010

INTRODUCTION

Brace yourselves! Inflation is about to spiral thanks to Escom.

TECHNOLOGY

In Excel, one can move data between sheets without using the cut and paste commands. Simply highlight the range that you wish to move, hover the cursor anywhere over the border of the range other than the bottom right-hand corner, hold down the left mouse button and the ALT key simultaneously and drag the cursor over the destination sheet tab and then to the desired location within that sheet. Upon releasing the mouse and ALT keys, the range will appear in its new location.

TAXATION

Travel allowances

Whilst this will reach you after the end of February, it is worth reminding those persons in receipt of travel allowances of the necessity to keep an accurate logbook that details both private and business travel. To facilitate its preparation, the odometer reading on 1 March 2010 should have been recorded. The following is a specimen based upon the logbooks that is available, with usage guidelines at www.sars.gov.za.

Scams

SARS has posted a warning on its web site relating to email scams that attempt to obtain the recipients banking details. The emails emanate from either returns@sars.gov.za or refunds@sars.gov.za and contain a link that directs the unsuspecting to a fake SARS website that is similar in appearance to the real thing where the targeted victim is required to complete his/her banking details. Avoid responding to these emails. Even clicking on the link may lead to additional fraudulent emails. When in doubt as to the veracity of an email, contact your local SARS office or your Tax Practitioner.

PAYE

A new monthly declaration process is to be introduced to replace the existing EMP201 form. Although not stated in the promotional material, presumably, the implementation will be in effect for the March 2010 submission that is due by 7 April. Full details of the drastically changed system are set out in a pamphlet entitled “EMP201 A guide for employers to the new monthly declaration process”. A small stock of these pamphlets is available at our offices or copies may be obtained at your local SARS office or at www.sars.gov.za by clicking on the PAYE 2010 Changes button.

Reminder

For those businesses involved in trading activities, it is not too late to take a physical stock count. The stock levels obtained may be adjusted by transactions that have taken place since the year-end. This adjustment will be easier for those businesses with accurate stock records.

BUDGET

Our summary of the tax implications of Budget 2010 are available on our website. An item that is not mentioned is the announcement that companies that hire young people with no work experience will be subsidised. A fuller announcement on this programme will be made later in the year. It is hoped that this will cushion the impact on unemployment that is touched on elsewhere in this issue. Also to be announced later are details of the voluntary disclosure programme – an amnesty of a sorts.

VAT

Interest is charged when there is a shortfall between the amount declared on the VAT201 and the amount actually paid. Previously, if it could be shown that the short-payment did not result in a financial benefit to the vendor and that the State did not suffer from the under-payment, SARS had the discretion to waive the interest. These conditions were hard to meet. With effect 1 April 2010, the vendor will need to show that the shortfall was due to factors beyond its control.

VAT Voluntary Threshold

With effect 1 March 2010, the threshold, above which an entity may register voluntarily for VAT, has been increased from a turnover of R 20000 per annum to R 50000 per annum. Any existing vendor who, during the previous twelve months, did not achieve an annual turnover in excess of the new threshold will be targeted for de-registration. SARS will be sending notifications to affected vendors. If you did not receive such a letter and your turnover for the year ended February 2010 fell below the new threshold, you will need to determine from SARS whether you still qualify as a vendor. If you do not qualify and wish to de-register, you will need to submit a VAT 123 form. However, the implications of deregistration may be quite onerous as:

• Larger customers may not wish to deal with you if you are not registered

• You will have to pay exit VAT on the lesser of cost or market value of assets and stock on hand.

If your application precedes the letter from SARS, you may apply to pay the exit VAT in six equal monthly instalments.

ECONOMY

The chances of a decrease in inflation or in unemployment are slim. In the main, this is thanks to Escom and the knock on effect of electricity rates. And do not expect your electricity bill to increase by only the amount of the announced percentages. Municipalities are entitled to, and probably will, add their mark up to the tariff increases. These increases will add to the cost of manufacture and this will be passed onto to the consumer. In addition, the significant increases in fuel costs, announced in the budget, will further escalate manufacturing costs. All these increases will add to inflation, so, do not expect the Reserve Bank to come to your aid by cutting interest rates. In fact, the shrewd planner will factor in a series of interest rate increases over the next few years. All consumers of electricity would be well advised to implement some power saving measures now. For tips and articles on power saving see http://www.electricitymonitor.co.za/articles.html.

DEADLINES

Promotion of Access to Information Act- 31 December 2011

Annual Duty – end of the month following incorporation date

Consumer Protection Act – October 2010

New Companies Act – no new CC registrations – approx. July 2010

REMINDER

“Snippets” is designed to keep readers abreast of developments affecting their daily business life. It contains important legislative changes of which the reader should be aware. As it is not financially feasible for us to communicate these changes to clients as and when they occur, each month, a copy of this newsletter is posted on our website, www.accounting4.co.za. Therefore, it is advisable for you to access this site on a regular basis. Readers who do not have internet connectivity are welcome to request us to post them a copy.

TAILPIECE

“Excellence can be attained if you care more than others think is wise, risk more than others think is safe, dream more than others think is practical and expect more than others think is possible.” – (Anon)