Sole proprietor tax


Sole proprietor tax is an issue which raises its head when you personally run a business with a trade name and not through a company or corporation.

So, as a sole proprietor, you are Joe Black t/a Better Photo Agency, for example. That is, your business is Better Photo Agency and you are the only owner. A CC or a company does not feature in this set-up. Your letterhead typically has “Better Photo Agency” in big at the top and “Sole proprietor: J Black” in small at the bottom. No registration number is displayed, even if “Better Photo Agency” has been registered as a defensive name.

If you as an individual are registered for tax with SARS, then there is no need to register your sole proprietor business for tax as it is not a separate legal entity and cannot be registered for tax as such. You are the business and the business is you, as it were, and your business trading figures are reported to SARS as your own personal figures.

If you do not have a personal tax number then you will need to apply for one and that number is used when reporting your personal and business income.

Ask Fixed Accounting to change your banking details online

Tax rates around the world: Individual income ...

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Banking detail changes will be verified before profiles can be updated.

SA Revenue Services (Sars) has implemented new fraud prevention procedures and processes regarding the way in which taxpayersbanking detail changes will be implemented.

From now on, any changes to banking details will be verified before an individual or company banking profile can be updated and if any refunds are due, these will only be processed after the receipt and verification of the new banking details.

The new procedures will improve security and reduce fraud. Banking details can be changed in person at any Sars branch or the change can be made when an individual Income Tax return is submitted. Supporting documents must be provided.

As part of the general Sars encouragement of electronic submissions, banking details can also be changed via the Sars eFiling system when submitting an ITR12 Individual Income Tax return, but Sars may still ask the taxpayer to go to a branch to verify the change.

via Moneywebtax – Sars`s stringent new fraud measures – Income tax

Top tips for filing your 2011 tax return

Logbook aboard the frigate Grand Turk.

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Don’t wait until the last day of submission to file your return. In the past the e-filing server could not handle all the traffic on the last day. As a result, many people were unable to submit their returns on time. SARS will not give extended deadlines;

Disclose everything, even the smallest amount of interest. Many people also don’t disclose a lump sum paid out by a pension/provident fund. This will cause SARS to include the taxable amount in the assessment, but disallow the tax deducted from it, which will result in the taxman claiming a large sum of money;

Get your medicalaid claim right. A common error is to not show how many members were on the medical aid during the year. This must be completed to ensure that SARS applies the correct tax break for all members concerned;

When there is a medical-aid code 4005 on your IRP5, you are not allowed to insert your medical contributions again (next to code 4040) in the medical-aid section of the tax return. You must insert a “0” in this column;

It is compulsory to keep a detailed travel logbook to show all the kilometres travelled for work, and make sure it is up to date. It is against the law to prepare a logbook with incorrect figures or to ask someone (even your tax consultant) to compile one for you;

When completing your travel claim, make sure to use either the actual cost method or the travel claim method. When using the travel claim method, do not fill in any actual costs like fuel, maintenance costs or wear and tear. SARS will use the default calculation on the actual costs. In most cases the travel claim method is the most effective way to claim against your travel allowance;

If you have been out of South Africa for more than 183 days, of which 60 days must be consecutive, you are allowed to claim a foreign exemption under section 10(1)(o)(ii).

Initially, SARS will disallow the claim, which will result in an assessment showing a large amount due to SARS. You will have to object to this assessment to claim for the exemption. You also need to submit copies of your passport, employment contract and a breakdown of the days you were out of the country as supporting documents;

via Top tips for filing your 2011 tax return – Business LIVE

What is eFiling?

SARS eFiling was launched in 2003 as a free online replacement process for the manual tax return submissions. This free service allows individual taxpayers, tax practitioners and businesses to register for free and submit tax returns, make payments and perform a number of other interactions with SARS in a secure online environment.

The eFiling service is on a par with international standards, being comparable with services offered in the US, Australia, Singapore, Ireland, Chile and France.

SARS has seen eFiling in South Africa grow significantly since it was initiated. For the 2009 tax year, more than 2.7 million individual tax returns were submitted through eFiling and annually over 7.5 million returns are submitted by businesses and practitioners.

Fixed Accounting is one of those practitioners who can assist you with your tax submissions – see our Services page above. Alternatively, visit the eFiling site here.

SARS employees might abuse their position

COLIN WOLFSOHN: Look, their whole principle of separating and making our ordinary Tax Act simpler, without these administrative provisions, is very good, no question about it. We understand where SARS is coming from in terms of cases of genuine crooks or people, as we say, like an Enron kind of case. We are concerned on a practical basis though, whether all these provisions…because this Act is written in the basis where everything is perfect and we’ve seen, unfortunately, cases in the past where you might have SARS employees who don’t interpret these legislations pieces totally accurately and, if I can use the wrong wording, might abuse their position. That kind of situation concerns us but hopefully with proper training of SARS officials that things will improve. 

via What the new Tax Administration Bill covers – Tax | Moneyweb

We have had instances where SARS employees have abused their position and unfairly interpreted the VAT Act to the total and unnecessary disadvantage of the taxpayer. Arrogant and unprofessional behaviour like that should never have been allowed to take place. It echoes the harshness and intolerance of Apartheid racism.

Tax filing season opens 1 July 2011

The South African Revenue Service (SARS) has announced that tax return filing season for individuals will start on Friday, July 1, and will run until Friday, November 25, for taxpayers who use eFiling.

via Tax filing season opens –

For assistance with your taxes, contact Accountkeeper