Proposals and Relief in Terms of Tax
As per usual, we will be helping you to complete all the calculations and payments. We are awaiting finer detail on how the new proposals will be implemented.
You can now delay SARS payments, and therefore improve cash flow
Businesses with an annual turnover of less than R50 million, and who are tax compliant, will be allowed to delay 20% of their PAYE contributions over the next four months. A portion of your provisional corporate income tax payments can also be delayed for six months without incurring penalties or additional interest.
You can now claim more from the ETI incentive scheme
Businesses who employ young individuals and meet a certain set of requirements can already claim an incentive against the Employee Tax Incentive (ETI).
President Cyril Ramaphosa announced that these incentives will be increased by an additional tax subsidy of up to R500 per month for the next four months, limited to private sector employees earning less than R6 500 under the scheme.
Increased employee tax incentive payouts
SARS’ employment tax incentive reimbursements will also soon be paid out monthly instead of twice a year in a bid to get additional cash in the hands of compliant employers as soon as possible.
Initiatives from Banks and Government
A number of banks have introduced temporary debt relief measures to specifically support small businesses. The South African government has furthermore established a fund, and introduced various support initiatives to help business owners during this period.
The basic requirements for state support will be:
• the business must be 100% South African owned.
• at least 70% of employees must be South Africans.
• recipients must be tax compliant.
Businesses who require support or funding can register on the www.smmesa.go.za website developed by the department of small business development.
On Tuesday our SMS said only businesses with more than 51% black ownership will qualify for state support. This requirement has, however, since been removed and the aforementioned criteria now apply.
Other Measures Being Considered
Various other initiatives are currently being considered, and we will keep you updated as soon as these are announced or confirmed.
President Cyril Ramaphosa said he is currently completing consultations to establish a special dispensation for companies that are in distress due to the COVID-19 epidemic. The proposal will mean that employees may receive their wages or salaries through the Temporary Employee Relief Scheme (TERS), which will enable companies to pay employees directly during this period and therefore avoid retrenchment.
The state is also considering utilising reserves funds within the Unemployment Insurance Fund (UIF) to extend support to employees in SMEs and other vulnerable businesses who are faced with a loss of income. Details of the initiative are expected to be released within the next few days. Ramaphosa is also exploring a temporary reduction of employer and employee contributions to the UIF and employer contributions to the Skill Development Fund.
Final lockdown regulation published (see link below).
Press release on how to apply for “Continuing doing business during lockdown” (see link below).
Template for permit of essential service (see link below).
Finally, Ramaphosa is also exploring a temporary reduction of employer and employee contributions to the UIF and employer contributions to the Skill Development Fund.
Business as Usual at LEAD
LEAD will be operating as normal during the weeks ahead. Over the last few years, we have embraced technology aggressively and our team is fully capable of working remotely.
We will, however, no longer be having physical meetings. Instead all meetings will be completed virtually. Certain organisations or divisions within the organisations such as SARS and the CIPC will also be closed during the national lockdown which will have a direct impact on our service delivery.
Feel free to contact us on email@example.com or our office cellphone 066 051 3156 during office hours between 07:30 am and 4pm, Mondays to Fridays, if you have any questions or concerns.
Additional Support to Our Clients
We look forward to supporting our clients, and will help to implement whatever relief measures are available to assist you during this time. Our paid-up retainer clients will receive additional support at NO ADDITIONAL COST which will include:
1. Registering your business on the www.smmesa.gov.za website on your behalf if your business has been negatively impacted by COVID-19 and require financial assistance.
2. Weekly video where we will provide some thoughts on how to survive during the COVID-19 during this period.
3. Support in the preparation of documents that you might need for bank assistance.
Please contact us if you need assistance with the above.
If you require ANY additional support, please let us know. We are more than happy to accommodate you outside our normal working hours where needed.
Our advice to business owners is simply to remain calm, be positive and be decisive. This crisis will pass and the aim is to have your business in the best shape possible when it does. You are not alone.
Take care of yourself, your team, your clients and your community. Seek the opportunities that will undoubtedly arise and monitor your finances closely. You have our full support.
Together, we’ll do this!