Hear that? It’s the collective shudder of South Africa’s small business community. Yes, the November tax season deadline is fast approaching, heaping pressure on accountants and bookkeepers across the land – and potentially wreaking havoc on your company’s Christmas preparations. The deadline for non-provisional taxpayers is 25 November 2016 and the deadline for payers of personal provisional tax is 31 January 2017. Time is of the essence.
But the process of readying yourself and your company for the tax season doesn’t have to be quite so stressful. Follow these four steps to make it easier.
E-filing makes life easier for individuals and businesses by facilitating the online submission of monthly, biannual, and annual returns to SARS. It’s much more efficient than providing paper records, and goes some way towards streamlining the process for you and your organisation.
E-filing also permits the immediate deduction of taxes from your company’s account. This automates some of the more annoying parts of the process and reducing your administrative burden. It allows you to associate individual payments with their corresponding taxes, it makes historical records easily and immediately, accessible, it supplies immediate proof of transaction to SARS – and it saves you a trip to the post office.
2. Gather your documents
Of course, as a small business owner, it’s incumbent on you to keep physical documents too. Trying to dig them out the second tax season arrives invariably leads to stress and frustration.
Your invoices, your payroll documents, your bank statements, and any other document you’ll need in November should be securely organised and easily accessible all year round. It’ll improve your accuracy – and avoid any issues related to lost records.
3. Know your exemptions
Unless you like paying more tax than you legally have to, you should probably become familiar with the various exemptions on offer to small businesses. South Africa has a long history of encouraging entrepreneurship, and if you run a company that operates in a specific industry or sector you may qualify for certain reliefs. Costs related to research and development, for example, are 150% deductible – though you have to get approval from a government committee first; if you’re located in a special economic zone, you’ll benefit from a reduced corporation tax of 15%; if you pay your employees less than R500,000, you won’t have to pay the Skills Development Levy.
4. Seek help
We know, we know: tax stuff is overwhelming. Unnecessarily so, in fact. So why not outsource the tough bits? A SARS-registered tax practitioner, registered accountant, or something similar, can help you keep your accounts in order: they’ll offer strategic advice on your business, and they’ll take care of the detail-oriented tasks such as revising and preparing financial statements and reports.
However, it goes beyond mere individuals. Our beautiful accounting software can help you automate the more frustrating parts of submitting your tax returns. If you’re struggling with reconciling cash transactions, for example, our Cash Coding Help Centre can save you plenty of time.
Even better, as part of our Xero for Startups promotion, the software is currently available at half-price for South African entrepreneurs for the first twelve months. Why not give it a try? It’ll take care of your tax worries for this year – and hopefully, for many years afterwards.