Lessons for small businesses from the Covid-19 pandemic

Covid-19 may have taught business owners the importance of preparing for similar events in the future.

The National Small Business Chamber (NSBC) conducted a survey that has highlighted key learnings.

NSBC Founder Mike Anderson said: “The pandemic has taught us how important it is to be able to adapt and keep businesses fluid to weather storms in the future. The more outside-the-box thinking to prepare for a worst-case scenario, the better. Having a Plan B can help improve every business’s odds of surviving and eventually thriving again during tough financial times.”’

The NSBC found that 93% of small businesses said the most important stand-out learning was about building up liquid cash savings, reducing debt and trimming non-essential spending.

The Small Enterprise Development Agency Western Cape provincial manager Alex Qunta said: “All SMMEs have taken an emotional toll as they are unable to pay staff salaries and overhead expenses. Even the most well leveraged of small businesses are feeling the impact of no or minimal trade in this lockdown period. Many small businesses have been closed down and they do not know how they are going to resuscitate their businesses.”

Qunta said major lessons had been ensuring insurance cover, savings or emergency funds were available when events such as this occurred.

He said it was important to have a business model that could be adapted, especially for e-commerce.

Qunta said the pandemic also allowed for innovations and opportunities, while highlighting the importance of digitisation.


Source: https://www.iol.co.za/capeargus/news/covid-19-pandemic-has-many-lessons-for-small-businesses-49432350

Here’s what you need to know about the latest tax incentive claims

The proposed measures for Covid-19 tax relief were published in draft bills on 1 April, with revised draft bills published on 1 May and 19 May.

The most recent iteration of the Disaster Management Tax Relief Bills made substantial changes to the calculations and requirements for the Employment Tax Incentive (ETI) relief offered to employers.

This has created a lot of confusion for employers, notes Yolandi Esterhuizen, registered tax practitioner & compliance manager, Sage Africa & Middle East.

As such, employers that calculated their claims as per the draft legislation in April will have to revise their claim and align it with the bills published on 19 May.

Since some changes are retrospective, employers will need to apply the changes to claims dating to April 1. The first set of bills proposed the following:

  • Increased ETI amounts of up to R500, depending on the remuneration of the employee.

  • Employees who did not qualify based on the usual criteria could now qualify. This included employees who already qualified for ETI for 24 months and employees who are 30 to 65 years old.

  • The ETI amounts for the new qualifying employees should not have been pro-rated if they were employed and remunerated for less than 160 hours during the month. An employee could have been employed and paid for 1 hour and still qualify for ETI of up to R500.

  • The requirement to be employed on or after 1 October 2013 to qualify for ETI was still applicable.

  • There was no proposal to amend the “monthly remuneration” used in the calculation of ETI if an employee was employed and remunerated for less than 160 hours during the month.

The revised bills published on 19 May made the following changes:

  • An increased ETI amount of up to R750, depending on the remuneration of the employee, effective on 1 April 2020.

  •  The “monthly remuneration” used in calculating the ETI amount should not be grossed up to 160 hours if an employee was employed and remunerated for less than 160 hours. The actual remuneration is used to calculate the ETI amount. This is only applicable for May to July and does not affect the remuneration calculated for April.

  • The additional ETI amount for the new qualifying employees should be pro-rated if they were employed and remunerated for less than 160 hours during the month. This requirement means that employers would have over-claimed ETI in April since the value was not pro-rated in the first draft.

  • The requirement to be employed on or after 1 October 2013 to qualify for ETI was removed, but only from May to July. The ETI calculation would also differ for those employees employed before 1 October 2013, or employees employed on or after 1 October 2013.

  • If no wage regulation measure or the national minimum wage was not applicable to an employee, the employee could still qualify if a wage of at least R2 000 was paid. This requirement was removed effective May to July.

Most of these changes only have to be applied from May to July and would not affect the claims an employer already made for April, said Esterhuizen.

Due to the ETI calculation and the new pro-rata requirements mean that most employers may have filed inaccurate claims for April and possibly for May, too.

If an employer claimed more in a month than it was supposed to, it will need to restate the EMP201.

If it claimed a lesser amount than it was entitled to, it can add the difference in the ETI value to the next month’s claim on the EMP201, said Esterhuizen.

This should help clear the confusion and save time for employers. The good news is, these calculations should automatically be applied if you have an electronic payroll system, she said.


Source: https://businesstech.co.za/news/trending/407679/employers-confused-about-the-latest-tax-incentive-claims-heres-what-you-need-to-know/

Nxesi concerned employers not doing enough to assist UIF payouts for desperate employees

Employment and Labour Minister Thulas Nxesi is concerned that some employers have not helped in claiming UIF relief payments for their employees by either not submitting the required documents or not forwarding paid out benefits in full.

Nxesi has pleaded with employers to submit all the needed documents for their employees to ensure that payments are sent through. The minister said R3.2 billion has not been paid out to employers because the necessary documents for about 725 791 workers have not been submitted.

The fund began making payments to employees as part of the government’s relief program to help supplement reduced salaries caused by the national lockdown. Workers would benefit from the fund through applications made by their employers.

Since April, the fund has disbursed more than R21-billion benefitting 3 609 161 workers represented by 314 454 employers, the department said on Monday.

Nxesi said he was concerned that workers who were in desperate need of funds were not receiving the payments.

“In as much as some companies have re-opened as a result of the risk-adjusted strategy which has seen the country move to level 3 of the lockdown, we acknowledge that there are still people who would find the injection from the UIF helpful and making a huge difference. There are still a number of companies that are either still closed or in dire straits and we hope those workers are not left in destitute,” Nxesi said.

The minister said the same pattern of missing documentation in UIF applications was being observed for May.

“The May payments are already at R3.2 billion and have benefitted 782 602 workers represented by 57 260 employers. Unfortunately, even in this round, 85 049 workers who would have benefitted from R356 million in payments have still not received the money as the details submitted by employers are missing.

“It is tempting to think of this appeal as counter-intuitive in the sense that we would be wanting to save money because it is clear that the demands on the UIF going forward are going to be massive. But we move from the point that it’s important that workers are not disadvantaged and as such, we appeal for the details so that the Fund can help those who need the money or for whom this may be the only source of funds,” the minister said.

Another concern for the department was that preliminary audits have shown that some employers have not been forwarding all the funds to their workers.

“It is alleged that there are companies that have not paid the workers what is due to them. We are aware of some companies allegedly loaning employees the money and that is not legal. We are also aware of other companies that are allegedly paying part of the money and not the full amount, as well as companies using the money for something else other than the intended purpose. If this all these allegations are true, we appeal to companies to do the right thing still, said Nxesi.

Nxesi said employers that were not compliant with the UIF Act would face fines and were required to pay back any debt owed to the fund.

“There are many cases where companies have not declared workers or have not contributed for employees. We will be raising debt against those companies and they must know that they need to pay back with interest and other penalties owed to the UIF. It is in all our interest to do the right thing. Even without being compliant, we have done the right thing and still paid them the Covid-19 relief and they also have to do the right thing,” said Nxesi.


Source: https://www.iol.co.za/news/politics/nxesi-concerned-employers-not-doing-enough-to-assist-uif-payouts-for-desperate-employees-49400825

SARS is changing the tax filing season due to the coronavirus – here’s what you need to know

The South African Revenue Service (SARS) has outlined changes to the coming tax filing season due to the impact of the coronavirus.

In a presentation on Tuesday (5 May), SARS commissioner Edward Kieswetter said that the season will be comprised of three phases with a number of key changes being made.

Below he outlined the phases and what will be expected of taxpayers and companies over each period.

Phase  1 – Employer filing

15 April 2020 – 31 May 2020

Kieswetter said that compliance by employers in respect of payroll taxes (PAYE) is very important, and that there will be a renewed focus at SARS to ensure that all employers are fully compliant in terms of their filing and payment obligations.

“We expect all employers to fully comply because this ensures a much lower burden of compliance for their employees in respect of their filing obligations.

“Employers are legally appointed agents on behalf of SARS. We remind employers that it is a criminal offence to collect income tax from their employees, and not pay this over to SARS.

“We also appeal to employers, along with other providers of third-party information to fulfil this requirement by the end of May 2020.”

Kieswetter said that third-party Information allows us to use data modelling and artificial intelligence to perform the final assessment of all standard taxpayers and provide the majority of individual taxpayers with a seamless filing experience.

Third-party providers include:

  • Employers;
  • Banks;
  • Financial Service Companies who administer retirement fund and pension schemes;
  • Medical Savings and insurance schemes.

Phase 2 – Tax file updates

1 June – 31 August 2020

During this period taxpayers are requested to engage with SARS to ensure that their tax files are up to date, in terms of general hygiene checks, banking details, address changes, Kieswetter said.

He added that most of these tasks can be completed online.

“All outstanding third party information will also be followed up during this period to ensure the highest level of data integrity. Third-party data providers, including employers, who remain wilfully non-compliant will be charged criminally during this period.

“During this phase a significant number of taxpayers will receive auto-assessments and given an opportunity to confirm their acceptance of the assessment outcome according to SARS.”

Kieswetter added that during phase 2, individual taxpayers who are required to file but have not been auto-assessed may file early via online facilities if their employers and other third-party data providers are fully complaints (which includes no PAYE debt without a proper and secure deferment arrangement).

Individuals who are not required to file will be informed, he said.

Phase 3 – Employee filing 

1 September – 31 January 2021

Kieswetter said that during this phase, individuals who are required to file will be reminded.

“Individuals who are non-provisional taxpayers or have not accepted the outcome of an auto-assessment are required to file as from 1 September through to 16 November 2020 and encouraged to file using our on-line channels to minimise visits to our offices.

“Individuals who are non-provisional taxpayers, who make use of our Branch facility has until the 22 October 2020 to file.

“Provisional Taxpayers who have not accepted the outcome of an auto-assessment are required to file when they are ready but not later than 31 January 2021.”

Source: https://businesstech.co.za/news/finance/395747/sars-is-changing-its-tax-filing-season-due-to-the-coronavirus-heres-what-you-need-to-know/