Hello to all our clients, during our mid-winter season!
Please find below, our newsletter for this period.

 

TAXATION

Tax Audits:

It has now been a year since SARS launched its customized deep-dive audit, it is important that you as the taxpayer, be able to defend all expenses claimed in your tax returns, whether that be in your personal name, or that of your company or Trust.

We note that the new deep-dive audit is much more vigorous and probing. This is especially true of home office claims, entertainment, and logbooks / vehicle claims).

Solar Allowances:

For private dwellings this is claimable on the cost of the solar panels only. For business installations, the full structure can be claimed in the year of first operation.

Retirement Annuity Contributions:

Ask our tax staff to determine the maximum premium you can claim for this outlay – as there are limits to the annual amount deductible per year for tax purposes. Once off top-up payments can be made before end of February of each year.

Another three deadlines:

Our tax department is currently busy with filing of the 2024 tax year, which season opens on the 15th of July.
Further, the filing of the first 2025 provisional tax returns with a deadline of end August 2024 takes place over the same period.

As time is now short, if you can react promptly to communications from our tax department team (Galanies, Melissa and Michelle, who joins the team now in July).

For companies, the deadline is 12 months after the company’s year-end, for most this will be 28 February 2025.

Please ensure sufficient funds are available to settle tax liabilities.

Importantly, if you could respond timeously to requests from our staff for documents and authorisation to file these tax returns, as per usual, this is a high-pressure period.

ACCOUNTING

The 2024 Annual Financial Statements (AFS) season is in full swing, as Steve and Sharon complete these statements and distribute for your review and sign off. Sunel will be joining the team during August of this year.

Note that the AFS is used not only for filing company tax returns, but with CIPC as part of the annual return filing.

The new additional Beneficial Owner requirement necessitates that we obtain further detailed information on all shareholders of companies. We have sent out prior communication in this regard, and Erika from our Secretarial department, will be updating your records, while Ashton updates the Trust beneficial ownership information. Other stakeholders, such as Banks and Shareholders are key users of these statements.

Beneficial Ownership is about disclosing to the relevant authorities, the shareholders of the Company / Group, and Trustees / Beneficiaries of Trusts.


ESTATE PLANNING & TRUSTS

We remind all our clients of this offering – we have a highly experienced lawyer and service provider working with us backed up with solid infrastructure.

Estate planning is vital for the protection of your wealth at time of your death, as the cost of estate management at time of death can be large. If you have assets that you or your trust own, you need to contact us asap.

Please contact us for more information and ensure you have plans in place. Death can come very quickly and unexpectedly. We offer very competitive executor fees for our clients.

Ensure you have a valid will in place – contact Ashton on ashton@finsolve.co.za.

As with companies, Trust are now also required to file their beneficial owner’s detail with both the Master’s Office, as well as with SARS. This includes both trustees and beneficiaries. Ashton has been managing this process with the Master’s Office.


TRAINING

Our webinar training sessions continue to be extremely popular, as are our self-study online courses.

See attached order form which list all our offerings. If you require further information, please contact Ashton on ashton@bizfacility.co.za.

Remember, being aware of your business’s financial position and performance, is your responsibility – it is your livelihood and future after all.

STAFF CHANGES

We advise all of our clients, that effective 1 August 2024, Kathy Fisher, our Head of Bookkeeping, is taking up a new role as Key Account Manager. We wish to thank Kathy for her service and leadership with FinSolve since 2015.

Replacing Kathy is the appointment of Natesha Michaels, who takes up the Head of Bookkeeping role at the beginning of August.

Additionally, we welcome the appointment of Michelle Brijcoomar and Sunel Botha in the positions of Tax Administrator and Accountant, respectively. We are a growing company.


THE LEARNING CORNER

Accounting profit is not the same as taxable income.

Accounting profit is a measure of the economic activity of the company, and is simply, income earned less all expenses i.e. the P&L Statement.

  1. Included in expenses, may be allowances for capital items that are capitalised to the Balance Sheet. This includes depreciation, being a technical allocation of the cost of the asset capitalised to the P&L, over the economic useful life of that asset.2. Personal expenses, i.e. non business related, paid for by the company on behalf of the Director or his / her family, is legitimate, provided this is authorised by the Director. The common procedure for this non-business-related expenditure, is to allocate this to the Director’s Loan account with the company. This is a debt owed by the Director, back to the company. This has some tax implications, as SARS views this as an alternative method of extracting income out of the business and requires that the company raise interest on this loan account.3. Other expenses, such as for example, fines, and certain legal expenses, while genuine business expenses, are deemed by SARS, to be non-deductible against tax profit. For accounting purposes, these expenses are still allocated to the P&L but will require adjustment in determining taxable income.

Tax profit, or Taxable Income then is therefore, in most cases, different to Accounting Profit.

The Annual Financial Statements (AFS) prepared by Finsolve Group, will always reflect these adjustments on the last page of the AFS – taxable income calculation. This is a reconciliation of accounting profit and taxable income.

It is on Taxable Income, that the corporate tax rate is applied, currently 27%.

Taxable Income then, is all revenue earned, less deductible expenditure allowed.

The two general rules are:

  1. All expenditure, not of a capital nature, incurred in earning that income, is deductible in arriving at Taxable Income. (Section 11a of the Income Tax Act).2. Capital expenditure, such as vehicles, equipment etc, are allowed as a deduction via tax depreciation or wear and tear allowances, provided the asset is used in the production of income. (Section 12e of the Income Tax Act).

The above two rules should act as guideline when deciding whether one can claim the expenses for tax purposes or not.

 

FINSOLVE SOLUTIONS | A Wealth of Experience

We understand that every business has unique requirements, which is why Finsolve Solutions offers tailored services to meet the specific expectations of each of our valued clients.
Including:
Taxation (Corporate and Personal) • Accounting • Financial Health Analysis • Business Valuations

 

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