As always, there’s plenty happening on the regulatory front, and September has been no exception.

Some of the big issues for the month:

  • Sars issues small business tax guide (defining thresholds for different tax-paying entities)
  • IRBA issues a new report, Auditing in the public sector, outlining the requirements for public sector audits
  • The National Health Insurance (NHI) Bill was released for comment and SA Institute of Chartered Accountants (Saica) issued a response detailing 23 areas of concern
  • The Administrative Adjudication of Road Traffic Offences Act (Amendment Act 2019): establishing a “demerit” system to improve road traffic quality and establishing an agency to manage the scheme.

Sars issues small business tax guide

As accountants will know, a person wanting to start a business must decide what type of business entity to use. There are legal, tax and other considerations that can influence this decision.

The tax part of that decision has now been sorted out as Sars has issued its Tax Guide for Small Businesses 2018/19.

As soon as a person commences a business, whether as a sole proprietor, a partner in a partnership or as a company, the person is required to register as a taxpayer with the local Sars branch in order to obtain a reference number. The person must register within 21 business days after becoming liable for any normal tax or becoming liable to submit any return.

The year of assessment for natural persons and trusts covers a 12 month period which commences on 1 March of a specific year and ends on the last day of February of the following year.

Points to note:

• A taxpayer must retain all supporting documents to a return for five years from the date upon which the return is submitted to SARS, since SARS may require these documents for audit purposes.

• SARS will under certain circumstances, on request, still require the submission of documents for purposes of verification.

• SARS will do validation checks on the data submitted to ensure its accuracy, including validations against the electronic employees’ tax certificates (IRP5s) submitted by employers to SARS.

• SARS will generally issue assessments electronically.