What is this newsletter about:
This Weekly publication is issued by Aquilla Advisors cc (Specialising in Business Solutions to SMME's in all the various aspects of business) and Aquilla Financial Solutions cc (Specialising in Financial Services Advice and Intermediary Services).
It contains information useful to business owners, business advisors and managers
The Korean F1 was almost over before it started. Rain and more rain took a number of casualties amongst the favourites to win the race. Eventually Alonso walked away for Ferrari with the honours.
Have you remembered that you need to hand in a compulsory logbook for all your kilometers travelled at the end of this tax year if you want to claim against your car allowances. If you have not kept that and need some help, contact us for a free excel or open Calc spreadsheet to assist you.
This week we discuss:
1. CIPRO Annual Company Returns (Is Your Company Legal)
2. TAX Q&A's
3. Group Thinking Stifles Creativity
3. Filezilla - Open Source Software
4. Occupational Health Care
Have a great week, and may all your plans materialise and make you lots of money.
CIPRO Annual Company Returns (Is Your Company Legal)
CIPRO have said annual returns were re-introduced as a result of poor compliance on the part of businesses to update their information as required by law on their Company registrations.
"The data will help the Registrar's office who requires constant and vigilant updating to ensure that it is relevant, accurate and up to date."
Companies and CCs must lodge a return every year, not later than the end of the month in which they were registered. The new return kicked in from 1 May 2005 for companies and 1 September 2008 for Closed Corporations. It must be submitted together with a prescribed fees. If your information is outdated or outstanding on your company documentation, you will be required to complete a CK2 and CK2A for Cc's and relevant CM documents for a company. Please remember that as of August this year you will also have to submit proof of residence for each member/ director as well as a certified copy of the ID and each director / Member have to sign in person.
Companies is only allowed to lodge annual returns electronically. Cipro will not accept or receive paper documents or cash from companies. This means that your company must open an account with CIPRO and deposit money to that account to do online processing and payments for these submissions.
Businesses that are deregistered will have to go through the hassle of reregistering and pay and submit all outstanding annual returns. Please make sure that your company is still registered by checking the CIPRO website. It is your responsibility to regularly verify and check your company's information or to notify the relevant authorities about any changes.
If your company was deregistered you are operating without the protection that the legal entity offers you and your co-shareholders / members. You will then each be responsible for any claims from creditors in your personal capacity.
To find out if your company is still registered, go to CIPRO website or Contact Cipro at 0861 843 384, or contact our offices who will gladly assist you in the process. It will unfortunately be a paid service.
29 October 2010
Interim PAYE reconciliations
26 November 2010:
Non-provisional: Individuals and Trusts
31 January 2011:
Provisional: Individuals and Trusts
Deadline for Postal submissions/SARS Drop box
Here are some of the key issues readers have raised over the past few weeks:1. SARS provides for an allowance for future expenditure on contracts
My company receives large grants and funds from contracts, however the expenses will only be reflected later as the contract runs for many months. I have received quite large sums up to this month, my year-end month, but will only have the expenditure over the next few months. As SARS expects us to show revenue of payment or an invoice (whichever is earlier), I will have to show the revenue. But will I be allowed to deduct the expenditure occurred after year-end in this tax year?
You could consider using the Section 24C allowance. This section provides for an allowance for future expenditure on contracts.
Prepayments similar to your circumstances often happen in the construction industry. This assists in cash flow problems caused by a tax liability on the prepayment when the deductible expense will only be incurred in a future period. The prepayment will form part of gross income. The Commissioner can grant an allowance at his discretion.The main rules are that the future expenses related to the prepayment will have to be deductible expenses (under Sections 11(e), 11(o), 12B or 12C), and the expenses have to be part of a contractual commitment relating to the prepayment.
In practice the Commissioner should grant you the allowance if you can satisfy him that the amounts received were received in terms of a contract; and the future expenses will be deductible. In practice the Commissioner will apply the gross profit percentage on the contract calculation method to determine the future costs.
2. Foreign pensions are exempt from income tax
I'm an SA resident earning a pension from the UK, which I contributed to while working and living in the UK. Do I need to declare it and pay tax on it?
A pension received by or accrued to any resident of the Republic from a source outside the Republic will be exempt income in the Republic (Section 10(1)(gC)).
3. 5 circumstances in which a business qualifies as a Personal Services Company
We have a company and the income exists in consulting fees. There are 4 employees employed by the company, other than the owner: a receptionist, 2 accounting clerks and 1 other employee.
There is a difference of opinion between me and the auditor who will do the audit of the financial statements. The auditor is of the opinion that the company falls into the category of a personal service company and certain expenses will not be allowed as expenses and that the income of the company is subject to a tax rate of 35%.
My opinion is that it is not a personal service company because the income from one contract does not exceed 80 % of the income of the company. Could you please give me clarity on this issue?
For me to express an opinion I would have to review this in more detail, but it would appear that the company is not a personal services company (PSC) by definition, nor by intent. This definition is to prevent the avoidance of employees' tax, and not to hinder or levy additional tax on trades.
There are five big 5 factors I like to look at when determining whether a business is a personal services company. The services must be rendered on behalf of the company in one of the following five circumstances:
- The person who renders the service would be regarded as an employee of the principal if it was not for the PSC; or
- The person who renders the service is subject to the control and supervision of the principal as to the manner in which, or hours during which, the contractors' duties are performed; or
- The amounts payable for the services rendered consist of earnings of any description, which are payable at regular daily, weekly, monthly or other intervals; or
- More than 80% of the income of the PSC results from the services rendered to any one client or associated institutions.
- But excluding a Company or Close Corporation that throughout the year of assessment, employs more than three full-time employees (other than shareholders, members or connected persons) who are on a full-time basis engaged in the business of the Company/Close Corporation of rendering any service.
At first blush it does not appear as if you fall into one of these categories.
Remuneration payable to a PSC by the principal is subject to PAYE. The tax deductions of a PSC are limited to the amount of the remuneration paid to its shareholders or other employees.The income of a PSC is taxed at a rate of 35%.
As a manager, you are approachable, encouraging, and maintain a supportive culture in your organisation. Still, some of your employees are reluctant to share their ideas. Perhaps you have a case of “group think” quieting your meetings.
When group members feel they have a great idea and choose not to share, they might be surrendering to what Michael Ray calls the “Voice of Judgment” – the inner voice that uses fear of the unknown to stifle creative input. When you have a case of “group think,” it is important you find ways to encourage your employees to push this voice to the side when they feel they have a valuable insight to share.
We are using a method called Participlan very successfully in planning sessions, strategy sessions, feedback sessions and the like. The method is totally anonomous and non threatening for all levels of employees in the same group.
When employees are discouraged, they can be cancerous to the workplace. As their own production goes down, they often attempt to contaminate others around them. Discouraged employees can be easily identified. When you observe the signs, you should discover the source of the employee’s dissatisfaction and then customize a solution. While the best approach is to prevent your employees from getting discouraged in the first place, the same skills can be used to provide the treatment.
Rich in Web content, short on cash? This free, open-source FTP application is handy if you're looking for a solid tool to handle FTP transfers and don't want to part with your bucks.
The straightforward interface offers translations in most of the world's major languages. Caching directories speeds up browsing FTP sites, and multiple secure connection options ensure that you can move files around without concern. Bookmarking comes in two flavors: the Site Manager for all your major FTP locations, and QuickConnect for fast switching on the fly.
The program lets you download or upload multiple files at once from and to several servers. If your bandwidth is somewhat limited, you'll appreciate a feature that lets you automatically adjust transfer speeds based on the time of day or date. FileZilla also lets you browse FTP sites mid-transfer. The lack of a task scheduler is compensated for, in our eyes, by a powerful filter so you only see the files you need.
FileZilla is no monster, either, eating up a manageable 50 MB in memory. Clearly, this is one of the best FTP tools around.
Filezilla also have other software like Filezilla Portable, Filezilla Server etc.
This is a low cost product you can introduce as a benefit to your staff and volunteers, with tremendous benefits to your organisation.
Thank you for sending in your questions. Please continue so, and we will answer them as best possible in our Q&A section.