Your Comprehensive Guide to Starting a New Business
Find expert advice and essential tips to successfully launch your new business.
I want to start a new business: Should I register a (Pty) Ltd?
This depends on a number of issues including the size of your business, your target market, the level of risk associated with your business, tax related issues, cost implications and client perceptions.
We would be happy to schedule a consultation and provide you with further advice on this.
What are the tax implications for a (Pty) Ltd?
Corporate entities are currently taxed at a flat rate of 28%. There are also lower tax rates applicable to Small Business Corporations as defined. It is also important that the corporate tax rate applicable to your business is considered against both the profitability of the business and also the rate of tax that you as the director may be paying on salary benefits received from your business. Dividend tax implications may also need to be considered for the larger and more profitable corporation.
Does a (Pty) Ltd require an audit?
Under the New Companies Act, most smaller (Pty) Ltd’s will no longer require an audit.
Furthermore, an Independent Review will only be required in certain very limited circumstances.
For most, the compilation of the Annual Financial Statements and an opinion expressed on these by an Independent Professional Accountant will suffice. This last is very much our target market.
Do I need to register my business for VAT?
If your turnover is over one million rand, then VAT registration is compulsory. Below this it is voluntary. If you fall into the voluntary registration category, we would be happy to advise you as to whether it would be preferable for your business to be VAT registered or not as this will depend on a number of factors.
The actual process of VAT registration can be a minefield for the inexperienced and we strongly recommend that this particular registration is handled by a professional.
Do I need to register my business for PAYE and UIF?
If your staff salaries are above the tax threshold, then PAYE registration is necessary.
How do I get regular and accurate Management Accounts that I will need to run my business?
This is what we do. Your focus should be on generation of income as opposed to being buried in paperwork.
For the majority of our clients, we attend the entire accounting function on a bi-monthly or monthly basis including the VAT and management reporting function. This means the client is not lumped with a huge bill at the end of the year and has regular access to quality information during the course of the year.
However, this is not cast in stone and we cater to each client’s individual and specific needs.
How do I make sure I get all the tax deductions that I am entitled to?
Again, this is what we do and where we excel as registered Tax Practitioners.
Our primary function is to ensure that both you and your business receive ALL the tax deductions that you are legally entitled to.
If your business is profitable, we WILL save you money from a tax perspective.
What are my obligations to SARS on an annual basis as regards company tax?
The corporate entity will be registered as a provisional taxpayer. A provisional taxpayer is required to pay tax twice annually, once in August and once in February. At these times we will determine the estimated taxable income for the corporation based on current and historical information and calculate provisional taxes payable accordingly.
After the end of the tax year, the Annual Financial Statements are prepared and the actual company tax return is submitted based on these Financials.
On assessment by SARS, the final tax liability for the corporate entity is determined.
What are my obligations to SARS as regards my personal tax given that I am a director of the company?
As a director, you will also be required to be registered as a provisional taxpayer.
The timing of your provisional tax payments are the same as for the company and the process is similar as mentioned above.
However, in addition, the director is still obliged to pay monthly PAYE on his salary but these payments are taken into account when the provisional tax calculation is performed and the liability is reduced accordingly.
