Thriving Through COVID-19

Thriving Through COVID-19

Thriving Through COVID-19

SA Business Relief Measures

 

The shockwave of COVID-19 has undoubtedly brought the world to its knees! Industries are seeking bailouts, the public is panicking, and the South African economy is in distress. It’s crucial at this time to know how an accounting firm can help small businesses thrive and not be swallowed up by this disastrous pandemic.

One of the best things you can do for your business at this time is to seek strategic advice from a good accountant. As your superhero accountants, we are remotely working around the clock and ready to help rescue your business!

Below is the SARS and labour relief measures that can help your business survive through the COVID crisis:

Firstly, it must be emphasised that all SARS and labour relief measures are only applicable from 1 April 2020.  Accordingly, any amounts that are due for periods ending up to 31 March 2020 must be paid in full…

It is also important to note that this is only available to small and medium enterprises with a turnover of less than R50 million whose existing status is tax compliant.

The below is the official offering from SARS regarding the deferment of your PAYE payment, as well as additional relief offered to companies already applying ETI.

 

Deferral of payment of Employees’ Tax

For a period of four months (from 01 April 2020 to 31 July 2020), businesses with a turnover of less than R50 million per annum will be entitled to defer 20% of their employees’ tax (PAYE) liabilities without incurring interest and penalties from SARS. The deferred PAYE liability must be paid to SARS in equal instalments over the six-month period commencing on 01 August 2020, i.e. the first payment must be made on 7 September 2020.

 

Note:

The initiative will not apply to employers that have:

  • failed to submitanySARS-related tax return (income tax, VAT, estate duty, etc.); or
  • Any outstanding tax debt.

 

Employee Tax Incentive (ETI) Programme

The ETI programme (that encourages employers to hire young job seekers) will be expanded for four months (from 01 April 2020 to 31 July 2020) as follows:

  • Increasing the maximum amount of ETI claimable during this four-month period for employees eligible under the current ETI Act from:
    • R1,000 to R1,500 in the first qualifying twelve months; and
    • From R500 to R1 000 in the second twelve qualifying months.
  • Allowing a monthly ETI claim in the amount of R500 during these four months for employees from the ages of:
    • 18 to 29 who are no longer eligible for the ETI as the employer has claimed ETI in respect of those employees for 24 months; and
    • 30 to 65 who are not eligible for the ETI due to their age.

 

In other words, ETI of R500 per month can be claimed for any employee earning less than R6,500 per month.

  • Accelerating the payment of employment tax incentive reimbursements from twice a year to monthly as a means of getting cash into the hands of tax-compliant employers as soon as possible.

 

Note:

The expanded ETI Programme will only apply:

  • In respect of employees earning less than R6,500 per month (the existing requirement for ETI); and
  • To employers that were registered with SARS on 01 March 2020.

 

Deferral Of Payment of Provisional Tax

For a period of twelve months (from 01 April 2020 to 31 March 2021), businesses with a turnover of less than R50 million per annum will be entitled to defer a portion of the payment of their first and second provisional tax liabilities to SARS without incurring interest and penalties from SARS. The first provisional tax payment due from 01 April 2020 to 30 September 2020 will be based on 15% of the estimated total tax liability, while the second provisional tax payment from 01 April 2020 to 31 March 2021 will be based on 65% of the estimated total tax liability. Provisional taxpayers with deferred payments will be required to pay the full tax liability when making the third provisional tax payment to avoid interest charges.

 

Note:

The initiative will not apply to taxpayers that have:

  • failed to submitanySARS-related tax return (income tax, VAT, estate duty, etc.); or
  • Any outstanding tax debt.

 

For your business to survive and stabilise through this pandemic, you must try to focus on your core business projects. Do not hesitate to seek expert help from experienced accountants. In this time of crisis, every step that you take will directly impact the future of your business. So be aware and make the right decisions, we are here to help you!

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