Life after Lockdown
Lockdown day 28. It feels like 17 years ago, when I started the firm in my spare bedroom. Having to read and listen to the latest changes to regulations, what government and private assistance are available to you our client, meeting job deadlines while leading our team.
Having to perservere and stay committed to my calling in business. Not letting fear take over.
For many, this season has been marked by uncertaintity, as small businesses were forced to close their doors, or change their operating models to adjust to the new reality.
We at LEAD have been working hard to assist our clients, giving advice to help your business survive and even some thrive during this season. We have helped you in staying compliant, implementing and provide training on cloud solution, keeping accounting records up to date, submitting finance applications and claiming UIF benefits.
It is such an honor to continue serving you and guiding you during this season and we are excited about the journey after lockdown. Helping you to implement systems where you can focus on doing what you do best, making your business thrive, and allowing us to take care of the “rest”.
Please keep a look out for our next newsletter that will be released next week, we are going to share some exciting news!
SMME Covid-19 relief funds and other support measures
We will continue to assist our clients with applications. Additional state support for SMMEs:
President Cyril Ramaphosa on the 21st of April 2020 announced a series of additional relief measures for small businesses affected by Covid-19 which include:
- For businesses who can prove that they’ve been negatively impacted during this period, SARS will not enforce any penalties on late payments.
- Individuals and businesses who donate to the Solidarity Fund will be eligible for a 10% donation tax deduction.
- All businesses will receive a four-month skills development payment holiday.
- Pay as your earn (PAYE) deferrals have been increased from 20% to 35% for the four-month deferral period.
- The previous turnover threshold for tax deferrals is being increased from R50 million to R100 million a year.
We will be in touch with all our clients about the additional measures as soon as we have received more information on the initiatives, and how they will be implemented.
The new financial year for individuals started on the first of March 2020.
Therefore, individuals who receive a travel allowance, or have right of use of a company car, are reminded to keep an accurate logbook. Without it, you will not be able to claim any travel expenses from SARS.
Small Business Corporation tax rates
The tax brackets for Small Business Corporations (SBCs) were slightly adjusted for the 20/21 tax year to BENEFIT small businesses.
The SBC tax rate means that businesses with a turnover of less than R20 million a year, and meet certain criteria, do not pay the 28% standard corporate tax rate.
This means small businesses only pay tax on profits exceeding R83 100.
How to qualify for SBC tax rates:
The basic requirements for businesses to qualify for the SBC tax rate are:
- All shareholders in your company should be natural persons (so no trusts or other companies).
- The shareholders in your company should not have any shares in other companies.
- Your company’s gross income for the year should not exceed R20 million.
- Not more than 20% of your gross income should come from rendering a personal service.
- Your company should not qualify as a personal services provider.
And if it does, it should employ at least 3 persons, who are not connected persons.
If you do not qualify:
You might still be able to qualify for the SBC tax rate by restructuring your business.
We will guide you on how to implement to meet the minimum requirements.
Take care of yourself, your family, your team, your clients and your community.
Implement new systems and ideas and monitor your finances
We are here to help and add value to your legacy.