As a small business owner, ensuring that your business is tax compliant is of utmost importance. With the tax-year end just around the corner, it is crucial to be well-prepared and organized to submit the necessary documents to the South African Revenue Service (SARS). Whether you are a first-time business owner or need a refresher, this comprehensive tax filing guide for SMEs will provide you with all the essential information you need to know.

The guide is divided into four main sections, each addressing a critical aspect of tax compliance. Let’s take a closer look at what each section entails.

In the first section, we will provide you with a comprehensive guide to payroll tax-year end. This section is designed to take you through the essential steps of preparing for, processing, and being ready for the next tax year. Properly preparing for payroll tax-year end ensures that you have all the necessary information and documents required for the payroll reconciliation process. This section will cover critical steps such as verifying employee information, reconciling employee records, and ensuring that all the necessary reports and declarations are in place.

Moving on to the processing payroll tax-tax-year-endtion, we will delve into the actual process of submitting your annual employer reconciliation returns to SARS. This section will cover everything from submission deadlines to necessary forms, emphasizing the importance of accurate and error-free submissions.

The final part of the guide focuses on preparing for the next tax year. This section will assist you in developing a plan that helps you avoid any mistakes made in the previous year and provides tips on how to make the preparation process smoother and more efficient.

The second section of this ultimate tax filing guide for SMEs focuses on four mistakes to avoid when submitting your personal tax return. By highlighting these common errors, we aim to help you prevent delays, penalties, or even an audit. Mistakes such as forgetting to declare income, claiming expenses that are not allowed, providing incorrect information, and not using the right forms can have serious consequences, so it is vital to be aware of them and avoid making these errors.

The third section of the guide is dedicated to three tips that will make tax compliance easier for small business owners. Running a small business can be stressful, and tax compliance is often one of the most time-consuming and complex aspects. This section provides practical tips that can help you streamline your tax compliance process, reduce the potential for errors, and alleviate some of the burden associated with tax-related responsibilities.

Finally, the fourth section highlights four compelling reasons to partner with Sage this tax-year end. Sage is a leading provider of accounting and payroll software solutions for small businesses in South Africa. This section outlines the benefits of using Sage software to streamline your tax compliance process, save time, and ensure accuracy, ultimately making your tax filing experience smoother and more efficient.

In conclusion, tax compliance is an essential aspect of running a small business, and being well-prepared for the tax-year end is crucial. This ultimate tax filing guide for SMEs offers easy-to-understand language, step-by-step instructions, timely and accurate information, valuable tips and tricks, and resources and support to ensure that you can submit your documents to SARS accurately and on time.

Whether you are a first-time business owner or in need of a refresher, this guide will help you navigate the complex tax compliance landscape and streamline the process, allowing you to devote more time to running your business. If you have any further questions or require additional assistance, please do not hesitate to reach out to our team members. Let’s get started on ensuring your tax compliance success!

Global recessions tend to happen roughly every eight to ten years. They are economic events that can have devastating impacts on economies and businesses. Unlike local recessions, global recessions affect people all around the world. If you run a business, it’s important to understand these recessions and how the possibility of one might impact you.

In this guide, we’ll break down what exactly a global recession is. We’ll also look into the causes, effects, and history of recessions around the world.

What is a Global Recession?

A global recession is an extended period of economic slowdown that affects many different countries around the world. Global recessions happen when national economies face periods of economic decline at the same time. When these periods sync up, the many smaller recessions form a global event.

A recession is generally defined as two or more quarters that face successive economic declines. There may not be a specific definition of what a global recession is, but this idea, as well as the definition by the International Monetary Fund (IMF), is generally accepted. Global recessions are classified by the IMF using various criteria. This includes a decline in per capita gross domestic product (GDP) around the world. The IMF believes that this decline in the global output must take place alongside other areas of a weakening economic landscape, such as increased unemployment, weakening trade, and lower capital flows.

What Causes a Global Recession?

There are many different factors that come together to cause a global recession. One of the main ones is rising interest rates. Higher interest rates have many knock-on effects, which can weaken economic activity across different countries. Any out-of-the-ordinary events that could affect global trade or macroeconomic conditions can also cause global recessions. This could include events like war or shortages of certain resources. Stock market crashes could also result in global recessions.

For example, the 2008 global recession was caused by a housing bubble and bad money lending practices. The Covid-19 pandemic resulted in a sudden loss of economic activity, resulting in a recession. The Russia-Ukraine war has also impacted energy and commodity prices, which could trigger a global recession.

Basically, any scenario where economic growth or demand slows down, or when consumer confidence slows, could result in a recession.
History of Global Recessions
There have been five events of global recession since World War II. These events occurred in:

● 1975
● 1982
● 1991
● 2009
● 2020

The latest global recession was declared by the IMF and named “the Great Lockdown”. Since the Great Depression, the 2020 global recession was the worst one on record.

These recessions can last anywhere from a few months to a few years. However, the general length of a global recession is just over a year.

What is the Impact of a Global Recession?

A global recession will generally result in high rates of unemployment, reduced economic activity, and lowering wages. When a recession hits, many companies will let go of staff in order to power through the recession. Job prospects will also decline during these periods. There are many knock-on effects related to this. Debts can pile up and manufacturing slows down – which results in further reductions in trade. As soon as an economy is affected by a recession, all areas of that economy will feel the effects.

Global recessions can also result in changing trading relationships between different countries. This depends on what sectors the recession hits hardest in different countries, and how these countries decide to combat the recession.

Possible Solutions for Global Recessions

Governments employ various strategies in order to try to combat the effects of a global recession. These strategies include:

● Injecting money into the economy through tax cuts or increased spending in an attempt to increase economic activity
● Banks could lower interest rates to encourage more spending and borrowing
● Governments could introduce reforms, such as investing in certain areas of the economy or easing trade barriers, in an attempt to increase economic activity
● Debt restructuring could help any countries or businesses that are struggling with excessive debt

Global recessions can be scary, but it’s important to understand that they’re temporary events. Economies and businesses do bounce back, especially if they’re proactive about addressing the recession as it hits. As a business owner, it’s important to understand the causes of global recessions and know when to identify them, as these recessions will have an impact on local and global economies.

By Yolandi Esterhuizen, Director of Product Compliance at Sage Africa & Middle East and a Registered Tax Practitioner

South Africa’s economy has yet to recover completely from the pandemic and faces record levels of load shedding, constraining South Africa’s growth potential. Taxpayers will be looking at the budget speech from Finance Minister Enoch Godongwana for signs of how the government aims to restore the country’s economic growth and boost employment in the year ahead.

They certainly face a difficult balancing act. Government is under growing pressure to find funds for social spending, including expanding the welfare system and funding healthcare for all. But with higher inflation, increased interest rates and energy costs, and lacklustre economic growth, taxpayers are under strain and don’t have much more to contribute to the fiscus.

Here are some things to look out for in the budget speech.

National Health Insurance

The long-awaited National Health Insurance (NHI) bill is expected to be finalised and tabled in parliament this year. Even after years of debate, there are many open questions about how the government plans to fund the NHI. At this stage, we can’t be certain how it will affect employers and employees via payroll taxes. Many hope the finance minister will shed some light in his speech in February.

Home office tax deduction

While we’ve seen many employers call their teams back to the office, many still work from home part or all of the time. These employees incur significant costs to work from home, including broadband, tech, office equipment, furnishing, and utility expenses. The requirements to claim these expenses are somewhat onerous and perhaps seen as unfair.

In the 2022 budget speech, National Treasury committed to publishing a discussion paper regarding this matter. However, nothing has been published subsequently, and the most recent taxation laws amendment act did not include any changes. It will be interesting to observe if there is an update in the budget this year or if the subject has dropped off the agenda.

Employment tax incentive (ETI)

One of South Africa’s most significant challenges is the high unemployment rate, especially among the youth. This issue can only be solved through sustainable economic growth. The government has tried to address the youth unemployment crisis in part through ETI. However, recent research indicates that it has an ambiguous influence. The scheme remains a great idea; however, if the government simplifies the administration of the ETI, it could encourage more employers to participate.

Unemployment Insurance Fund (UIF)

We have seen growing calls from organised labour and other quarters to place the UIF under administration due to concerns about inefficiency, corruption, and wasteful expenditure. I don’t expect an increase in the contribution rate this year. However, it would be good to see an update from the finance minister about how the government will ensure that the fund remains sustainable and able to pay claims in the future.

Personal income tax and VAT

In the midterm budget update, Minister Godongwana mentioned that revenue collection has exceeded projections in the 2022 Budget and that the gross tax revenue estimate for 2022/23 has been revised up by R83.5 billion to R1.68 trillion. Nonetheless, the IMF expects one-third of the global economy to be in recession in 2023, and the minister has said South Africa’s outlook is also grim.

Even so, I do not believe a VAT or personal income tax rate increase could be justified this year. I am not expecting major changes beyond adjusting tax brackets in line with inflation. In the 2022 budget speech, the government said it would review the approach of adjusting tax thresholds for inflation. Perhaps it will implement an automatic adjustment to cater for inflation.

The power crisis

High levels of Eskom’s load shedding are hampering economic activity. They are especially damaging to small and medium businesses operating on thin margins. We hope to see the President and Finance Minister provide greater detail on how the government will address this crisis. This might include making funds for diesel available to Eskom and fast-tracking reforms to the energy market.

With the regulator approving a steep increase in power prices, smaller businesses face the double whammy of frequent electricity outages but with higher tariffs. We can expect more consumers and businesses to invest in alternatives such as solar. It’s encouraging that the sunset date for the section 12L energy efficient saving allowance has been extended from 1 January 2023 to 1 January 2026.

However, this allowance mainly caters to large entities because the implementation costs are so high. We hope the government is considering a tax incentive or rebate for solar investments more tailored to people working from home and small businesses. Such interventions could make solar more affordable and relieve some pressure on the national grid. While the government is unlikely to introduce these incentives or rebates in the 2023 budget, mentioning their plans would be a step in the right direction.

For media queries:

Idea Engineers (PR agency for Sage)

• Itumeleng Mogaki
• Mobile: +27 (0)82 780 5002
• itumeleng@ideaengineers.co.za

About Sage

Sage exists to knock down barriers so everyone can thrive, starting with the millions of Small and Mid-Sized Businesses served by us, our partners, and accountants. Customers trust our finance, HR, and payroll software to make work and money flow. By digitising business processes and relationships with customers, suppliers, employees, banks and governments, our digital network connects SMBs, removing friction and delivering insights. Knocking down barriers also means we use our time, technology, and experience to tackle digital inequality, economic inequality, and the climate crisis.

Find out more: www.sage.com/za

Understanding cash flow is an essential part of running any business effectively. It’s easy to get so swept up by revenue that you actually miss out on your profitability. And when you do calculate cash flow, there are a few different formulas and factors that you need to consider. Incremental cash flow is one approach.

This tactic is used when a business is planning for a new project or investment, and they need to understand an accurate financial projection of this. In this quick guide, we’ll cover what incremental cash flow is, how it works, and how you can calculate it for your business.

What are Relevant and Incremental Cash Flows?

This is cash flow that a business can expect in the future. These cash flow predictions are made based on a certain new project, or product, that the business is considering. Incremental cash flow is calculated when a business is planning to take on a new project. The cash flow considers the additional startup costs and operating expenses of the new project. This is done to understand what the business’ profits and revenues will look like should they go ahead with this project. This is generally determined if the incremental cash flow is positive.

How Do You Calculate Incremental Cash Flow?

To calculate incremental cash flow, you will need to use the following formula: Revenue – expenses = initial costs
To do this, you will need to have accurate cash flow forecasts for your potential revenue and operating expenses for the new project.

To break it down a bit more, here are the specific processes you need to follow to figure out your incremental cash flow:

1. Figure out what your business’s revenue is (how much money is coming in)
2. Figure out what all of your businesses expenses add up to (how much money is going out)
3. Subtract your revenue by your expenses
4. Note the initial cost of the project that you are calculating incremental revenue around
5. Take the total calculated in step three, and subtract this total by the initial project cost

Now you will have calculated your incremental cash flow. You can repeat this process for different projects and compare your totals.

Example Of Incremental Cash Flows

Incremental cash flow should be calculated whenever your business plans to dive into a new venture or project. For example, let’s say you want to update your existing product and introduce a new version of it. In planning this, you have two possible new product options you could go with, product A and product B.

Here are the revenue projections for each product over the course of a year:
● Product A: R500 000
● Product B: R800 000

Here are the expenses of each product over the course of a year:
● Product A: R150 000
● Product B: R500 000

Here are the initial startup costs for each product:
● Product A: R50 000
● Product B: R35 000

let’s calculate the incremental cash flows for each product based on this information:
● Product A: 500 000 – 150 000 – 50 000 = R300 000
● Product B: 800 000 – 500 000 – 35 000 = R265 000

So, product B may generate more revenue, but it has a lower incremental cash flow due to its expenses and startup cost. This could mean product A might be a smarter choice for your business.

Why is Incremental Cash Flow Important?

Incremental cash flow helps you understand the cash flow predictions and profit potential of a new project. This is necessary for figuring out how viable the new project is, and what your business’ overall cash flow would look like should you proceed with the new project.

As in the example above, understanding incremental cash flow can also help you compare different project or product options, to figure out which would be best financially for your business.

Incremental cash flow predicts the possible increase or decrease in a business’ revenue related to a specific new project. This could be investing in new equipment or a new facility, introducing a new product line, updating a new product, offering a new service, or more.

Whatever the case, any kind of business should understand how incremental cash flow works to help them make more informed decisions. Carefully calculating this can help you avoid unwanted surprises in your cash flow further down the line. It’s a valuable tool for understanding where best you can invest your time and money, and what kind of impact certain investments would have on your business.

SEE ALSO : YOUR DEFINITIVE GUIDE TO FINALLY UNDERSTAND CASH FLOW.

Business vehicle finance is important for many small businesses to be able to purchase a car as a business asset. Vehicles are necessary for all kinds of businesses to operate. As your business grows, and asset finance options become available, it might be a good idea to consider purchasing a business vehicle.  

Having a company car offers many benefits. You could use it for transporting products and making deliveries, transporting staff, or simply just getting to work and meetings. And if you purchase the vehicle as a business asset, it could provide room for a tax deduction.  

Follow this guide to learn how to access vehicle finance and what is needed to purchase a business vehicle.  

How Do I Buy a Car Through My Business in South Africa? 

Business vehicle finance is available to South African business owners looking for a company car. This type of financing works similarly to individual vehicle financing, except that the car is owned by the business.  

To apply for a business vehicle finance plan, you will need to preset a business plan outlining how you will use the vehicle, and why the vehicle is necessary for your business. You will also need to preset the necessary documents to the lender, including things like monthly bank statements, your company’s registration and VAT number, and details of the company’s director and trustees.  

Of course, you will need to prove that your business can afford the vehicle and that it makes sense. To get approved for business vehicle finance, the vehicle will need to be a suitable fit for the company and that it is not an overwhelming expense.  

If you access business vehicle finance and purchase a car through your business, then the car becomes an asset owned by the business. This can help businesses access some tax dedication benefits.  

How Does Business Asset Finance Work? 

Business asset finance is when a company uses its balance sheet assets, such as inventory or investments, as a security to take out a loan. These assets that the company already owns are used to make it easier for a company to secure funding.  

Business asset finance is usually used for higher ticket items that the business needs to purchase. This includes things like machinery and vehicles. It’s a common type of SME funding used to grow existing businesses.  

Business asset finance helps businesses spread out the cost of expensive assets over time, instead of having to pay for them in one lump sum.  

How Do You Buy a Car If You are Self-Employed in South Africa? 

Getting approved for vehicle finance and purchasing a car if you are self-employed can be difficult. However, it is completely possible as long as you are able to prove that you can afford the vehicle financing.  

The best way to buy a car as a self-employed person is to start by saving up a large deposit. By paying a significant lump sum upfront, you will be able to gain access to a vehicle loan and get better lending terms more easily. The deposit should be at least 20% of the value of the vehicle.  

Next, you will need to prove your ability to repay the loan. To do this, you will need to provide at least three months’ bank statements and prove that you have a stable source of income.  

What Are the Requirements to Qualify for Vehicle Finance? 

The main requirement to qualify for vehicle finance, whether personal or business vehicle finance, is that you are able to prove that you can afford the vehicle. This will involve proving your income and financial standing.  

It’s important to have good credit when applying for vehicle finance. This will help you secure a loan with more favourable lending terms.  

You will also need to prove that you are a resident of South Africa and that you hold a valid South African driver’s license.  

Many small business funding opportunities, including private and government funding, don’t include capital for vehicle financing. If your business requires a vehicle, then you may need to consider a separate business vehicle finance agreement.  

This can be a great move for many businesses. Vehicles are necessary for many businesses’ daily operations. Plus, they could also come with some tax benefits. As long as you purchase a suitable vehicle for your business needs and are able to afford the vehicle, business vehicle finance options are always available.  

In business, there’s nothing more true than the saying “you need money to make money”. Business finance is a reality for any company that wants to get started and grow. It’s important that any small business owner understands business finance and the different types of finance that exist. This is necessary for performing daily business operations.  

To help you out, here’s a guide providing some insight into business finance, how it works, and why it’s so important.  

What is Business Finance and its Functions? 

Business finance, also known as corporate finance, is all about managing a company’s money. This includes obtaining funding for the business, allocating financial resources, managing debt, and controlling any financial decisions and operations. 

It doesn’t matter how big the business is or what it does, business finance forms an essential part of how it operates. All businesses need some kind of funding to get started. Businesses often also need extra financing to help them grow. Of course, every business also needs to carefully manage how its money is used.  

The aim of business finance is to ensure the business operates smoothly, carefully controls any risk related to finances, and ultimately, makes a good profit.  

What are the 6 Types of Finance? 

Business finance can take on a few different forms. Here is a breakdown of the six different types of finance that exist.  

Debt Finance  

Any money that a business acquires to maintain or run its operations is known as debt finance. With debt finance, the money lender does not gain any kind of ownership in the business. Instead, the business repays the full amount of finance with an agreed-upon interest rate.  

Debt finance can be classified into short-term, medium-term, and long-term finance options.  

Equity Finance 

Equity finance is a typical way of raising money for a new startup. This type of business finance is when the business offers shares in exchange for capital. There are many different SME funding options available that fall under the equity finance category. 

Public Finance 

Public finance refers to any state expenditure. For a business, there are various government funding opportunities that exist. These public funding options are created to help boost different sectors of the economy.  

Personal Finance 

This is the same principle as business finance, but it applies to individuals. From a business perspective, personal finance can include how much an individual takes from the business, and how they manage this money.  

Corporate Finance 

As explained above, this refers to all of the financial activities involved in running a business. Corporate finance can include debt finance and equity finance, as well as the day-to-day financial decisions of the business.  

Private Finance 

This is an alternative form of business funding where private firms help companies raise funds. Private finance applies to companies that are not listed on a securities exchange or cannot obtain business finance on these markets. Private finance plans are often used to fund nonprofits.  

Why Is There a Need for Business Finance? 

All businesses need finance to start. This could be to purchase stock and equipment, set up premises, or fund the initial stages of the business before it makes a profit. Business finance is the money available to spend on business needs. Without adequate finance, no business will be able to start and operate properly. 

It’s also essential that businesses control their finances carefully in order to keep their operations on track. This is why it’s so important to have a strong business finance system in place.  

What is an Example of Business Finance? 

There are many different examples of what business finance could look like. This could be an entrepreneur approaching the bank for a business loan, a startup seeking angel investment, or a small business applying for a specialized township business funding opportunity like TREP.  

The business calculates the risk associated with taking on business financing. They carefully assess what their financing needs are, and compare this to the earning potential that the financing brings. 

Once financing is secured, the business needs to carefully manage its finances.  

Whether it’s to start a brand-new business or scale up an existing one, business finance is an important part of running any business. Managing finances play an essential role in all business’s daily operations.  

Without business finance, no business would be able to grow and operate efficiently. Understanding business finance is therefore one of the most important things for any business owner to get right.  

Looking for business funding can seem like one of the trickiest parts of running a business. While most entrepreneurs may want to just bootstrap it themselves, SME funding is a requirement that so many businesses simply can’t ignore.  

There are many reasons why business funding is so important. As an entrepreneur, it’s important to understand just how much capital you need and what you need it for. If your business is not funded correctly, it could leave a major impact. 

We’ll cover six of the main reasons why a business needs funding below. If you’re starting your business, make sure that each of these areas is covered.  

1.Purchasing Assets  

Just about any business requires assets to help it grow. One of the main reasons for business funding is to invest in assets that are necessary for the business. This could include things like vehicles, machinery, IT equipment, or any other kind of asset that is required for the business to operate.  

When planning business funding around purchasing assets, just make sure that the return on investment makes sense. For example, if you know that you can double your output by investing in a certain piece of equipment, you can estimate how much more revenue you will make and how this will make sense in relation to your business funding. 

2. Working Capital 

Absolutely any business has operating expenses. This is one of the most important reasons for business funding, and it’s also one of the most overlooked things to consider.  

Working capital is important for allowing businesses to take advantage of any new opportunities that arise. Working capital provides a cushion if business funds get tight, and it ensures the business’s day to day expenses are covered.  

Most startups won’t be turning a profit straight away, so it’s important that they have enough working capital at their disposal to keep them afloat.  

3. Startup Costs 

Very few entrepreneurs are able to fund their new ventures entirely by themselves. Business funding is required for many new businesses to help them get off the ground. This can be to cover costs like finding a location, building a website, hiring staff, or purchasing stock. 

There are many startup funding options available to businesses.  

This could include private and government business funding opportunities, bank loans, angel investors, crowdfunding, grants, and more.  

4. Growth Funding 

Many established businesses require funding to take them to the next level. This could be to increase the business’s capacity, purchase additional vehicles, move to larger premises, or even open a second location. Whatever the case, growing a business often requires money.  

For growth business funding to make sense, you’ll need to have an already established business model that is proven to work. This will help you to scale up with minimal risk.  

5. Research and Development 

Investing in research and development is another reason to seek business funding. The world moves and changes at a rapid pace, and businesses need to be able to keep up. To stay ahead of the competition, many businesses will need to do constant research and adjust their business model to stay ahead.  

6. Investing in Property 

Most businesses start by renting out a location. While this works well, the ultimate goal of any business in a good location is to purchase its own property.  

This might be to purchase a large new warehouse, a strategic new office space, or an ideal storefront. Whatever the case, investing in property is a major expense, and it requires funding. Even if your business does have capital reserved for a property investment, it probably won’t cover the entire cost.   

If you’re looking for business funding to purchase a property, make sure that it makes sense. Understand the terms of the loan, and how your business will be able to cover this with its new location.  

While business funding may seem scary, the good news is that there are many funding opportunities available. This could include bank loans to specialist township business funding programs and everything in between.  

The key to any kind of business funding is having a solid business model and being able to prove that the funding is necessary. Business funding is only necessary if it has a clear goal. By understanding these different reasons why a business may need funding, you will be able to access the right kind of funding and use it wisely. Ultimately, this will let you start and grow your business more efficiently.  

Understanding small business tax is an essential part of being an entrepreneur. While tax is unavoidable, knowing the right small business tax route can save you money and help you access tax benefits.  

 In this guide, we’ll break down everything small business owners need to know about tax and what kind of tax applies to them.  

Small Business Tax Rates 

Small businesses that have a turnover of less than R1 million per annum qualify for turnover tax. This is a simplified tax system that works off the taxable turnover of a business. This system applies to: 

• Sole proprietors 
• Partnerships 
• Close corporations 
• Companies 
• Co-operatives 

 According to SARS, the turnover tax rate for micro-businesses is: 

 If your small business is registered as a company and it meets certain qualifying requirements, you can register as a small business corporation (SBC). SBCs can access extra tax incentives, including a reduced tax rate.  

 According to SARS the small business tax rates are as follows for the current financial year: 

Small Business Tax Requirements 

It’s important to understand what type of small business tax you qualify for. All businesses need to maintain clear, accurate financial records throughout each year of assessment. To do this, they should be using the right small business accounting software.  

In order for your business to qualify as a small business corporation (SBC) by SARS, you will need to meet the following criteria: 

• Your business turnover is less than R20 million per year 
• All shareholders in the business are natural persons 
• You only own the one business 
• Less than 20% of the business turnover comes from “investment” income 
• Less than 20% of your income comes from rendering a “personal” service 

 In order to qualify as a micro business for turnover tax, you will need to meet the following criteria: 

• The turnover of the business is less than R1 million per year 
• The business is not a “personal service provider” or a “labour broker” 
• The business trades as either a sole proprietor, a partnership, a close corporation, a co-operative, or a company 
• All partners in a partnership are individuals throughout the year of assessment 
• The business is not a public benefit organisation, a recreational club, an association of persons, or a small business funding entity 
• The business owner, partners shareholders, members, an the business do not hold any shares or interests in a close corporation, company, or cooperative 

Small Business Tax Exemption 

Small business tax does not need to be paid by any business that earns below the tax threshold. As an SBC, you won’t have to pay income tax if you make a profit of less than R70 700 per year. If you qualify as a micro business for turnover tax, you will be exempt from paying tax if your turnover is less than R335 000 per year. 

Small Business Tax Benefits 

Besides getting lower tax rates, small business tax benefits allow SBC’s to appreciate their assets at a faster rate than other businesses. This reduces your profit, in turn reducing your tax. SBC shareholders who pay the maximum small business tax rate on their income can access a tax benefit through a combination of salary and dividends. 

Small Business Tax Deductions

SARS allows for various tax-deductible expenses, which are the expenses incurred in operating a business. These expenses can reduce the amount you pay on small business tax. Some common small business tax-deductible expenses include: 

• Day-to-day business expenses (office rental equipment costs, phone costs, financial charges, insurance, etc) 
• Capital expenses (business vehicles, hardware, renovations, etc) 
• Education expenses 
• Entertainment expenses 
• Business start-up expenses 
• Net operating losses 

Staying on top of tax is an essential part of running any small business. By understanding tax and preparing for it, the process doesn’t have to be a headache.  

Ensure your small business is set up with the right POS system to record all sales and accurately manage revenue. As long as you have clear financial records, paying small business tax is easy.  

The following content is paid for by Nedbank.

Small-business owners, content creators, traders and side hustlers often struggle to find convenient ways to generate and keep track of invoices, and receive payments from their customers.

But with Nedbank Money Message, those days are over. Whatever your business, you can now create and send invoices to your customers and receive payments into any bank account of your choice via WhatsApp. You don’t even need to be a Nedbank client to use Nedbank Money Message. This useful, secure payment solution is quick and easy to set up – and best of all, there are no set-up costs or payment-processing devices to buy.

If you have a business and need a flexible, easy way to generate professional invoices and get paid by your customers, then Nedbank Money Message is your better money choice.

All you need is a smartphone that runs the latest version of WhatsApp and an internet connection. Simply register with Nedbank Money Message by sending a WhatsApp to 087 240 6272. There is no set-up needed from your customer’s side. You will send them an invoice via WhatsApp and all they need to do is upload their card details safely and securely to make payment. It’s all on WhatsApp – and it takes only a few minutes.

How does it work?

Money Message is ideal if you sell products or services where the customer isn’t necessarily present or able to give you a bank card to swipe. This makes it perfect for online stores, work-from-home businesses or people on the move. It allows you to create and send an invoice and receive payment from your customers – all without complicated payment gateways or excessive transaction fees.

There’s no daily limit on the number of transactions you can process, although bills are currently restricted to a maximum value of R4 000 each and a total monthly limit of R50 000.

Will I qualify for Nedbank Money Message?

Although formal businesses can also use Nedbank Money Message, it’s perfect for small or informal businesses, because you don’t need any official company registration to use the service. You do, however, need to have proof of identification – like a South African identity card or document – and a South African bank account. Foreign traders would need a valid passport and South African bank account.

How do I register?

To register for Nedbank Money Message, make sure you have the latest version of WhatsApp on your smartphone.

Save the number 087 240 6272 to your contacts, then send the word ‘Hi‘ to that number and start a chat with Nedbank Money Message .

The bot will take you through the registration steps, which involve confirming your identity and your business name. You will have to load your banking details for the payment of invoices from your customers. Since your banking details are not stored on WhatsApp, it’s safe to add them.

During the registration process, you can also create your invoice template, including your business logo and business details. You can later update this invoice with your customer’s details and purchase information before you send them the invoice.

It should not take more than a few minutes to complete and requires no paperwork or waiting period.

How to use Nedbank Money Message?

Once you’ve set up your profile, you can start doing business immediately.

The interface is simply a chat window, with the Nedbank Money Message bot prompting you to give it commands. These commands (with short codes in brackets) are typically the following:

• Get paid (Gp).
• Make a payment (Mp).
• View your transaction history (H).
• Edit your profile (Pp).
• Edit your business details (Bz).
• Get help (i)

All these commands are entered as short codes. To send an invoice, enter the short code, your customer’s name and details, the amount due and what you’ve sold.

Your customer will then receive an SMS with a link to open the invoice and view it on WhatsApp. They must use the short code Pb for ‘Pay bill’ and enter their card details. They can pay with any South African credit, debit or cheque card.

Their payment is completely safe, as the system uses 3D Secure protocol to ensure secure and accurate payments for all online purchases. No card details are stored on WhatsApp, which makes security even tighter.

How much does it cost?

Using Nedbank Money Message is free. There is no sign-up or subscription fee.

All you need to pay is 2,75% of the value of every transaction and a flat fee of R2 per generated invoice.

For more information visit www.nedbank.co.za/moneymessage.

As digitalisation fast forwards and people reach out for convenient digital experiences, Standard Bank has focused on delivering solutions that meet client needs and improve their client experience. Their digital International Payment Solutions are an example of how they provide convenience and give clients control over their International Payments.

“Our solutions allow our clients control over their payments and foreign exchange, making their banking experience more seamless. Online International payments are convenient, and clients can make secure payments that comply with exchange control regulations. All you have to do is choose a solution that’s right for you,” says Rosh Sundram, Head International Payments Client Experience.

Making International payments on Internet Banking is simple. This channel is suitable for payments of up to R1.5 million per transaction. Clients can view and book exchange rates, upload the requested documents for the payment and track the status online. To register for Internet Banking, simply visit the Standard Bank website, click on ‘Sign into account’, then click on ‘Internet Banking’ and register your details.

Standard Bank’s alternate channel Business Online enables segregation of duties and individual limits, it integrates with mainstream accounting packages and allows clients to make future dated payments. It is suitable for payments of any amount and from rand and foreign currency accounts. It also accommodates single and multiple payments. To go digital on Business Online clients may contact their transactional relationship team.

Clients may also hedge their currency exposures through eMarketTrader and eMarketTrader Mobile. This single web-based solution is an advanced cross-asset trading platform, bringing together market intelligence and research, real-time pricing, trade execution and post-trade services. eMarketTrader Mobile is a free app which allows you to track market movement and buy or sell currency (both SPOT and Forward Exchange Contracts) directly through your mobile device. Clients can download eMarketTrader Mobile from their preferred app store.

For additional information visit our International Payments webpage on www.standardbank.co.za, or contact our International Payments Service Desk on 0860 123 007 or via the email address InternationalPaymentService@standardbank.co.za