PAYE Archives

Instead of declaring your drawings as salary, rather fix a monthly salary of, say R40 000, above what your start-up company can afford to pay you right now. Pay the PAYE on that fixed amount and credit the balance to your loan account. Then deduct any drawings from the loan account. When the company can pay you a good salary of, say, R70 000 per month, declare only R40 000 for PAYE purposes and take out the rest as repayments of the loan account. It works like this – How does it work? By paying a consistent amount of…

SARS are already hitting dormant companies with monthly penalties for failing to submit Income Tax returns. They are now gearing up to do the same to dormant companies that are registered as employers and have not submitted PAYE returns. They have started, as before, by sending out hundreds of demands for EMP201 and EMP501 returns warning that failure to submit can lead to penalties and legal action. So, don’t think that just because you haven’t traded or you don’t employ anybody, you’re off the hook. Yours is exactly the kind of company that they are going after. You can submit…

So, you’ve read Company Basics and Trust Basics. Now here are some Tax Basics for companies. 1) There are three tax returns each year. The first and second provisional returns which must be submitted in August and February of the company’s tax year if the company year end is February, then the Annual Tax Return which is also submitted in February, but a year later. 2) The first and second provisional returns are based on the last assessed income, so until the company has…

Many people continue to believe that it is better to provide their personal services, typically consulting, through a company rather than as individuals. Not so. A Personal Service Company is one which provides services such as consulting, bookkeeping, designing etc which are actually services provided by a person rather than product supplied or non personal services, such as rental property. In order for it to be classified as a Personal Service Company a number of tests are applied. You can research more deeply if you are unsure whether these tests are satisfied in your case or not. Remuneration. Does it…

PAYE

How a new company can save PAYE

Penalties for not submitting PAYE returns even if dormant

Tax basics

Tax law relating to Personal Service Provider Companies