Five expensive payroll errors
These common PAYE errors could cost you dearly with SARS. With SARS continually seeking to increase its revenues however it can, organisations with misconceptions about how certain payroll elements should be taxed may unknowingly be exposing themselves financially. We often come across the following top five payroll errors that organisations need to question and correct […]
Withholding of employees’ tax during liquidation proceedings
In CSARS v Pieters and others, the Supreme Court of Appeal (SCA) was tasked with deciding whether liquidators were required to withhold employees’ tax from payments made to employees under section 98A of the Insolvency Act. The company in question was an insolvent transport company which had employed approximately 700 people. Forty-five days after the appointment of […]
SARS changes to employer statement of account
The South African Revenue Service (“SARS”) has recently made changes with regards to the management of payroll taxes in order for employers to more effectively manage their own accounts by way of a number of functions and tools. SARS states that the aim of these changes is to allow employers to ensure that all their […]
Employees’ tax (part 1): Personal service providers
For there to be an obligation for PAYE to be withheld is typically dependent on three elements being present. These elements are all defined in the Fourth Schedule to the Income Tax Act[1] and include the presence of an employer, an employee and the payment of remuneration. No employees’ tax can be charged if one […]
Employer Annual Reconciliation Due
Employers should be aware that Employer Annual Reconciliation submission due date is fast approaching. If the relevant deadlines are missed, certain penalties will apply. When should it be paid? The Employer Annual Reconciliation starts on 1 April 2018 and employers have until 31 May 2018 to submit their Annual Reconciliation Declarations (EMP501) for the period 1 March 2017 to […]
Tax consultancy services:A fringe benefit?
A recent judgment of the Tax Court sitting in Pretoria[1] highlighted yet again the very broad nature of the employment fringe benefit regime governed by the Seventh Schedule of the Income Tax Act[2] and as applies to goods and services provided to employees through an employer. As a general principle, employees’ benefits received from their […]
Third provisional tax payments
Provisional taxpayers are required to submit two returns annually: one after six months from the start of the relevant year of assessment, and again one on the last day of the relevant tax year.[1] Since provisional taxpayers are taxpayers who earn income in a form other than salaried income (and from which PAYE is deducted […]
Non-executive Directors’ remuneration: VAT and PAYE
Two significant rulings by SARS, both relating to non-executive directors’ remuneration, were published by SARS during February 2017. The rulings, Binding General Rulings 40 and 41, concerned the VAT and PAYE treatment respectively to be afforded to remuneration paid to non-executive directors. The significance of rulings generally is that it creates a binding effect upon […]
SARS now outsourcing Debt Collection
In an attempt to recover outstanding debt worth over R15-billion, the South African Revenue Service (SARS) has outsourced confidential taxpayer information from its debt book to selected service providers. (See notification letter). The outsourcing project, which was implemented on 1 June 2016, appointed the following service providers: CSS Credit Solutions, NDS Credit Management and Trifecta […]
Salary sacrifice schemes – Latest judgment by supreme court of appeal
Salary sacrifice schemes are popular in practice. Typically, they involve employers paying a decreased salary to their employees, with an added fringe benefit to make up for the lost ‘cost to company’ sacrificed by the employee to obtain the benefit. For example, an employee may prefer to enter into a salary sacrifice with his/her employer […]