November 2011

INTRODUCTION

As the year draws to a close, it may be of benefit to redefine our performance goals for the New Year. One such goal may to improve service delivery. In these tough economic times, we can ill afford to alienate our customers but, at the same time, we must attract quality clients. We touch on this topic below.

TECHNOLOGY

In Excel, when a workbook has multiple worksheets, it can be laborious to use the mouse to move to the desired worksheet. An easier method is to use CTRL+PageDown to move to the right and CTRL+PageUp to move to the left. By holding down the keys, you can move from sheet to sheet rapidly.

Adjusting the width of multiple columns can also be time consuming if each column is changed a column at a time. Provided the columns to be changed are adjacent to one another, multiple columns may be changed simultaneously. To do this:

• Click the first column heading – this will select the entire column
• Hold down the shift key and click the last column. All columns in the range will be selected.
• On the column headings, position the cursor on the border between two of the selected columns. A black cross will appear with left and right arrows.
• Drag the desired arrow until the column is the width that you require. Once the mouse button is released all the columns in the range will be the same width.

TAXATION

Medical Expense Claims

For the 2012 tax year, a taxpayer who is under 65 is entitled to claim R700 per month for himself and his first dependant and R 440 per month for each successive dependant of any contributions made by him to an approved medical fund. For taxpayers who are under 65, any contributions in excess of these limits may be claimed. However, the amount of that excess will be reduced, on assessment, by 7.5% of the taxpayer’s taxable income before the deduction of medical expenses.  These limits do not apply to persons over 65 years of age.

The Act also permits claims in respect of physical impairments and disabilities.  The Act distinguishes between the two categories by stating that a disability is a moderate to severe limitation of a person’s ability to function or perform daily activities as a result of a physical, sensory, communication, intellectual or mental impairment, if the limitation:

• Has lasted or has a prognosis of lasting more than a year, and
• Is diagnosed by a duly registered medical practitioner in accordance with criteria prescribed by the Commissioner.

There is an extensive list of the type of practitioner that is approved to diagnose an equally extensive list of impairments. In addition, in making his/her diagnosis, the practitioner is bound by a list of diagnosis criteria. Thus, physical impairment can be stated as being one that has a minor limitation on a person’s ability to function normally.

Physical impairment expenses are subjected to the above 7.5% reduction. Disablement expenses are deductible in full. For the latter to be claimed, the claimant must be in possession of a form ITR-DD that has been completed by the appropriate medical practitioner. A new such form must be obtained each year.

With effect from 1 March 2012, the method of claiming a deduction for medical expenses will change. However, taxpayers who are over 65 will continue to use the present system. The allowance for disabled family members will fall away.

The new scheme will consist of three elements:

• A tax credit of R 216 per month in respect of each of the taxpayer and his/her first dependant plus R 144 per month for each subsequent dependant. The amount so calculated will be deducted from the actual tax bill
• A deduction from taxable income of the amount by which the actual medical aid contributions exceed the above allowances multiplied by 4
• A deduction in respect of medical expenses not met from the medical aid scheme. This amount will be reduced by 7.5% of taxable income.

DEADLINES

Annual Duty – end of the month following incorporation date

Promotion of Access to Information Act manual – 31 December 2011

Disposal of a residence from a company or trust – 31 December 2011

Income Tax Returns – 2011 Individuals:

Efilers: Provisional taxpayers – 31 January 2012

             Companies – 12 months after their year end                     

BUSINESS

It is essential that procedures are in place to ensure quality service delivery.

The first step in designing those procedures is to define where the delivery takes place and by whom is it delivered.  Various such points may occur in the same business, e.g., front office, telephone, email. A standard of service must be defined for each of these areas and for the person that delivers the service. The latter can range from the driver to the managing director. Each person who interfaces with the customer, whether by direct contact or by preparing the goods for delivery, will have an influence on a customer’s perception of the service that you provided.

The standard should deal with such topics as turnaround times for orders, queries or complaints, the number of times a phone rings before it is answered, how long a customer may reasonably be kept waiting before receiving attention and returning calls promptly. These are just some examples from an endless list.

Of course, the standard can only be defined accurately with input from the client and should be regularly  updated to cater for changes in the client’s perception of your performance. Surveys play an important part in defining your standards. These should be carefully designed so as to get to core information without wasting any of the customer’s time. Of course, these surveys should be analysed by management on a regular basis.

Action should be taken to eradicate sub-standard performance and to encourage quality service. Regular training sessions should help to improve performances whilst monthly awards may result in an improvement in the quality of service.

ECONOMY

With at least two European countries making contingency plans for the collapse of the Euro, it seems only a matter of time before this actually occurs. The fallout from this will impact on all world economies and ours will not escape the consequences. Europe is one of our major trading partners and any reduction in that region’s economic activity will result in a reduction of South African exports. Quite apart from the loss of jobs that this will surely generate there is a possibility of riots as has been experienced in other countries It is hoped that our government has put contingency plans in place to cater for these eventualities.

In the meantime, the debate over nationalisation of the country’s mines continues and a report on this is due to be presented to the ANC’s National Executive Committee in the near future. It is hoped that any recommendations will take into account the impact that nationalisation has had in the countries to the north of us.

However, a glimmer of hope has been offered by a recent announcement a global plan to provide liquidity to the financial system by central banks in the US, Canada, Japan, Britain, Europe and Switzerland.

Certainly, there has been a lot of talk of how jobs are going to be created but, apart from a very slight reduction in unemployment numbers; there is no evidence of any positive steps to treat this matter as urgent. In the meantime, inflation is on the rise and this signals the possibility of an interest rate cut early in the New Year. Whilst this is good news for individuals and business with large debt burdens it will mean that those persons living on investment income will have to tighten their belts somewhat.

ANNUAL CLOSURE

This year, we will be closing our offices on 15 December 2011 and re-opening on 3 January 2013. We wish all our client and their families a peaceful and joyous festive season and thank them for their support during 2011.

TAILPIECE

“As long as man continues to be the ruthless destroyer of lower living beings, he will never know health or peace. For as long as men massacres animals, they will kill each other. Indeed. He who sows the seed of murder and pain cannot reap joy and love.” - Pythagoras