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A newsy update on current financial, tax, statutory and economic affairs and happenings as reported by Dave Bridges from Accounting 4 Associates.
JULY 2010INTRODUCTION From
the popular financial press, it appears that we have entered, not spring, but
what journalists refer to as the strike season. Strikes are detrimental enough
to our reputation as an investment destination without our press drawing
attention to the fact that we have a season for this economic upheaval. TECHNOLOGY In
Excel, in edit mode, to make a portion of a formula absolute, use the F4 key.
E.g., if, in the formula A1*B2, you wish the B2 to remain unchanged when copying
the formula to other cells, place the cursor either before or after the B and
press F4. The formula will then becomes A1*$B$2. If you need only the row number
to remain constant, pressing F4 again will change the formula to A1*$B2.
Pressing the F4 key once more will remove all absolute references. When not in
edit mode, the F4 key may be used to repeat formatting. E.g., Supposing that you
have formatted a cell to yield a number displaying two decimal places. In the
next cell, the number is shown with no decimal places. Place the cursor over
that cell and press F4. The number will now be shown with two decimal places. TAXATION Provisional Tax
The
recently announced changes to the provisional tax system left many taxpayers
confused. The letters distributed by SARS seemed to infer that unless you have a
liability to actually pay provisional tax you do not have to submit a return.
Therefore, in terms of that inference, if you qualify as a provisional taxpayer
but your estimate indicates that no tax will be payable at the end of August or
February, you do not have to submit a return. This is totally incorrect. There
has been no change to the law, which states that all persons who qualify as a
provisional taxpayers must submit an estimate in a form acceptable to the
Commissioner. Therefore, one needs to determine whether one is a provisional
taxpayer. According to the Act, any person who derives income other than from
remuneration, as defined, is required to register as a provisional taxpayer. The
exceptions to that rule are:
We
have advised all those clients for whom we have a current email address of this
fact. Copies of that communication will be posted on our web site, www.accounting4.co.za. First
bi-annual Employees’ Tax Reconciliation
Employers
are reminded that the first Employees’ Tax Reconciliation must be prepared to
reflect all payroll transactions for the half-year to 31 August 2010 for
submission on a date to be announced. That date is likely to be during September
2010. The IRP5 certificates will not be distributed to employees but it will be
necessary to prepare and submit them to SARS with the half-year reconciliation.
SARS will use the information on those certificates to verify the demographic
data of the employee against the information held on its database. It is
imperative that employers ensure that this data is correct before the
certificates are submitted. The employer as confirmation of the employee’s
particulars must retain evidence, similar to that required for FICA compliance.
It may be requested by SARS as proof of the information displayed on the IRP5.
If an employee is not registered for tax, SARS will issue a tax number to
him/her and advise the employer accordingly. On
those certificates there will be no necessity to split the tax withheld between
SITE and PAYE except where an employee ceased service with you during the
period. With that exception, all tax deducted will be recorded against code
4102. Where
an employee left your employment during the period, the calendar month that
forms part of the tax certificate number will be recorded as 02. Voluntary
Disclosure Relief
During
the budget speech, the Minister announced a limited form of amnesty. The
application may be lodged during a period of twelve months commencing 1 November
2010. Applicants will be required to make complete disclosure of any
infringement of the acts administered by the Commissioner of Inland Revenue that
occurred at least twelve months prior to 1 November 2010. Provided the applicant
is unaware of any audit or investigation that has commenced or is proposed,
penalties and interest that existed immediately prior to the application will be
remitted in full. If an audit or investigation has commenced and the
Commissioner is satisfied that the infringement would not have been detected by
the audit or investigation the applicable penalties may be remitted by 50%.
However, any actual tax that has been evaded will have to be paid. The bill,
which incorporates this scheme has still to be passed into law, also provides
for an agreement to be reached that includes payment terms. DEADLINES Promotion
of Access to Information Act- 31 December 2011 When the Act was originally promulgated in 2005, we assisted existing clients in the preparation of the manual that the Act requires to be submitted by all entities to the Human Rights Commission. Since that time, the composition of our client base has changed and it is possible that some clients have not complied with this requirement. Should you be in doubt as to your compliance, you are urged to contact one of our consultants. Annual
Duty – end of the month following incorporation date Consumer
Protection Act – October 2010 New
Companies Act – no new CC registrations – approx. last quarter of 2010 Income
Tax Returns – all taxpayers: Postal
submissions, i.e., hardcopy tax returns – 30 September 2010 Income
Tax Returns – non-provisional
taxpayers: Electronic submissions – 26
November 2010 Income
Tax Returns - provisional taxpayers:
Electronic submissions – 31 January 2011 NB:
The term “taxpayer” includes individuals, companies, close corporations,
individuals and all taxable entities ECONOMY A recent radio report referred to the fact that overseas investors, when choosing a country in which to establish their businesses, look for a number of factors. One of the most important is productivity. Productivity is the amount of output one can expect for the amount of pay expended. Unfortunately, South Africa cannot compete with the likes of China and India. Our wages are far too high and many of our workforce are unproductive. This is particularly true of big business, government and parastatals where the employee merely go to the office and not to work! The impact of recent wage negotiations is apparent in the rise in the Producer Price Index that measures the increased cost of production. Whilst the CPI continues to fall and, hopefully, encourage the SARB to reduce the repo rate before the end of the year, increases in the PPI do not auger well for such a reduction. Those involved in wage negotiations should ask themselves whether increases above the inflation rate are justified in the light of their constituents’ contribution to the economic well being of the country. BUSINESS Human Resources An
item that is omitted from the financial statements of small businesses is human
resources. And yet, without those resources, no business can survive. Therefore,
it is surprising that few small businesses evaluate the impact, both positive
and negative, that personnel may have on the bottom line. Staff
turnover, if prolific, can have an extremely adverse effect on net profits.
Consider the employee who continually interrupts others in the performance of
their duties and those that, through their continual negative remarks, cause
other workers to adopt a negative view of the organisation and its objectives.
The loss of such a person, whilst inflating the staff turnover rate, may have a
positive impact on productivity. Adversely, the demotivation and thereby the
loss, through whatever means, of an employee, who continually contributes more
effort than that for which he or she is remunerated and who always puts the
interests of the organisation above his or her own, will also inflate the staff
turnover rate. However, in those circumstances, the result, inevitably, will
result in increased training costs that, in the long term, are the cost of an
increase in staff turnover. Recruitment
also plays a significant factor in staff turnover. The recruitment of staff,
particularly those required to perform functions in a specialised field such as
accounting, cannot be left to someone with a little or no knowledge in that
field. It may cost a little more to ensure that someone with the requisite
skills oversees the entire recruitment process, but, in the long term, the money
spent in obtaining the right candidate for the position is what contributes to
the bottom line. TAILPIECE “Never look down on anybody unless you’re helping him up.” (Rev. Jesse Jackson)
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