Twigg

How much do you charge?

2010-07-19T18:14:37Z

Tax returns	Price (incl Vat)
Income Tax return	570
Provisional tax return – efiling	285
Provisional tax return – manual	570
VAT return - efiling	285
VAT return – manual	570
Tax clearance	142.5

Registrations
Registration as a taxpayer	285
Registration for PAYE/SDL/UIF	570
Registration for VAT	1140
Registration for Workmans Compensation	570
Registration with Department of labour	570

WHAT'S HAPPENING WITH THE NEW COMPANIES ACT?

2010-05-26T09:42:09Z

What is the current status of the new companies Act of 2008? And when and how will it start to affect you?

Current status

The new Companies Act will come into force on a date to be notified by government, probably during the third quarter of 2010. The new Act will replace the old Companies Act of 1973. The Act has already been promulgated, but a significant number of errors have been identified and acknowledged by the Department. It is unclear how these errors are being addressed and when we will see the final, corrected legislation. A set of regulations has also been published, but only for public comment at this stage. The regulations will be finalised in the months to come. The answer, then, is that the Act will probably come into effect somewhere between July and September 2010, unless the correction of errors occasions further delay.

Implications for close corporations

Existing close corporations will be entitled to continue operating. You will be able to convert a corporation to a company under the new Companies Act, but will not be obliged to do so. However,as from the date of effect of the new Companies Act, it will not be possible to register new close corporations – so if you are thinking of establishing one in the future, you should acquire a shelf corporation as soon as possible.

Implications for companies

Imagine that the IRB announces that it has replaced the rules of rugby. The new rules, says the Board, are based on the old rules, but are intended to modernise the game and therefore introduce some fundamental new principles. The new Companies Act will have exactly the same effect on business. The Sharks are lectured by professional referees at the start of each season on the implications of any rule changes made during the off-season. Business people are going to need to do much the same in order to come to terms with the new rules of business.
Other than understanding the new rules, every company will need to take at least two legal steps.
Firstly, you will have two years from the implementation date to replace your existing Memorandum and Article of Association with a new Memorandum of Incorporation. During this grace period your existing Memorandum and Articles of Association will prevail in the event of a conflict with the new Act. Thereafter, the new Act prevails and your company may be left in a state of great uncertainty if there are conflicts.

Secondly, you will need to review your shareholders agreement. These agreements will have dealt with matters that are not or could not be included in the Memorandum and Articles of Association under the old Act, and they are critical to the smooth operation of many companies, as well as the protection of shareholder interests. Under the old Act, shareholders agreements were valid even if they were inconsistent with the Companies Act. This is set to change and shareholders' agreements will be invalid to the extent that they are inconsistent with the new Act. Unlike your existing Memorandum and Articles of Association, shareholders' agreements do not enjoy a grace period. As soon as the new Act becomes effective, shareholders' agreements will immediately be invalid to the extent that they conflict with the new Act.

We believe that the sensible approach is to review your shareholders' agreements and Articles of Association at the same time – they cannot be looked at separately – and to do this as soon as possible. This will ensure that the new Act does not pose any unexpected problems for you and your company.

Tim is the Commercial Director at Venn, Nemeth & Hart Attorneys. He can be contacted at tim@vnh.co.za

HELMETS, VOLCANIC ASH AND YOUR BUSINESS

2010-04-20T17:12:37Z

"Europe's ash cloud has triggered a flurry of anguished calls for the EU to improve its crisis response"1

This morning's mountain bike ride in the dark (with lights) was characterised by discussion around the impact that the volcanic ash is having on local business - with some staff and sub-contractors being stranded on the wrong end of the world. (the wrong end being defined as the end other than the one you want to be on)

The ride ended with me ploughing head first into a ditch and spending the better part of the day recovering from the concussion and whiplash that resulted.

Unlike the volcanic eruption, my fall cannot be considered an Act of God. It does however present a similar risk to my business. If I had not had a helmet on, I most certainly would not be writing this article now...

The important question is do you have a helmet on - what is your disaster plan?

]]> Understanding the risk is one of the first steps to dealing with it.

As a business owner, what impact does your forced absence have?

What steps can you take to mitigate these risks? This could be as simple as leaving a spare set of keys and alarm codes with someone you trust, or arranging alternative signing powers on your bank accounts. We are increasingly reliant on the internet in order to conduct business, how do we deal with this not working (in my case - go to the beach!)

What about the loss of income? I recently undertook a two week cycle trip from Howick to Cape Town - great experience, but the billing experience at the end of that month was quite the opposite.

Where is your helmet? The disaster plan is part of the protection, but what other protection does your business require, and is it adequate? This may include insuring your partner's lives, professional indemnity, or a procedures manual for staff to follow in your absence.

As a small business owner myself, I also use the argument that these are luxuries that I cannot afford. (I was one of those synical customers that never listen to the helmet saleman that asks me how much much head is worth)

Learn from my pain if you can - a decent helmet is worth it (that applies to your bicycle and your business).

1 BBC News Tuesday, 20 April 2010 14:12 UK

CONSUMER PROTECTION ACT: SOME THINGS YOU SHOULD KNOW

2010-03-26T05:39:59Z

The Consumer Protection Act which was signed into law on 29 April 2009, becomes effective between April and October 2010. It affects a broad range of consumers and transactions - for example if you receive a product as a gift from family, you are entitled to protection under the act even though you did not contract with the supplier directly.

The act also affords protection to small businesses whose turnover or asset value is less than a threshold - The National Credit Act uses R1m as a threshold, so expect something similar here.

The implications for you as a provider of products or services are:

]]> Direct marketing

A consumer may either refuse to accept, pre-emptively block, or require you to discontinue any communication which may be seen as direct marketing (includes telephone calls, e-mails, brochures or letters in the mail).

The National Consumer Commission is to setup a register where consumers can record their preferences as to the type of communication they wish to receive. Businesses will have to ensure that they have measures in place to receive and record consumers' specific preferences (at no cost to the consumer), and abide by these expressed preferences. The Minister may prescribe certain times when consumers may not be contacted, for example, on public holidays or after a certain time at night.

Cooling Off

There is a five business day cooling off period for transactions resulting from direct marketing (commencing on the latter of the transaction date or the delivery date)

Product Liability

Producers, importers, distributors and retailers of goods will be liable for damage caused by unsafe or defective goods whether or not the harm resulted from their negligence. This means that the consumer will no longer have to prove that the damages suffered as a result of defected goods was due to the fault of the producer, importer, distributor or retailer.

Contract Renewal

There can be no automatic renewal of the fixed term contract. The consumer (natural persons only) is entitled to cancel the contract when the contract term expires, or at any other time, given that he gave the supplier 20 business days notice in writing.

At the expiry of the term of a fixed term agreement, the contract will automatically continue on a month to month basis, until the consumer either cancels the contract or renews the agreement for another fixed term. The Act requires the supplier to remind the consumer of the expiry date at least forty business days prior to the expiry date of the fixed term.

Customer loyalty programmes

A supplier who sponsors a consumer loyalty programme, or accepts loyalty credits in exchange for goods or services (for example frequent flyer miles), may impose a partial or complete restriction on the availability of the goods or services during specific periods of the year. However, the restriction may not exceed 90 days in a calendar year.

Overselling and overbooking

A supplier may not accept payment for goods or services where it has no reasonable intention to supply the goods or services, or where it intends to supply goods or services that are materially different to the goods or services for which the consumer has paid.

With regard to damages suffered as a result of a supplier's inability to supply goods or services due to overbooking or overselling the Act provides for a refund of the amount paid plus interest, as well as any consequential damages which directly resulted from the breach of contract.

Implied warranty of quality

The producer or importer, the distributor and the retailer each warrant that the goods comply with the requirements and standards contemplated in the Act.

Failed, unsafe or defective goods may be returned to the supplier within six months after the delivery of the goods to a consumer. In such a case the supplier has to either repair or replace the goods, or refund to the consumer the price paid by the consumer. The consumer may choose whether to be refunded, or to have the goods replaced or repaired.

In instances where the supplier repairs the failed or defective goods and within three months after that repair, the failure or defect was not fixed and it recurs, or another failure or defect is discovered, the supplier must replace the goods, or refund the price to the consumer.

The Act provides for a three month warranty on repaired goods.

This article was summarised from an article by Dr Johan Erasmus, BLC, LLB, LLD (a Regulatory Analyst at Deloitte and chairman of the SAICA Legal Compliance Committee) and published on the SAICA website.

CIPRO: HURRY UP & WAIT

2010-03-26T04:24:12Z

Do not hold your breath... Getting a simple task such as a name reservation - which used to take 24 hours - is now taking 4 weeks!

Woes of CIPRO unfortunately affect us all. The New Companies Act cannot be fully implemented without CIPRO functioning, neither can businesses register trade marks, or business names as required by the Consumer Protection Act.

The only advice is PLAN AHEAD. Make sure you allow plenty of extra time for changes you may require to your statutory records.

YOUR TRADE NAME MUST BE REGISTERED

2010-03-26T03:09:35Z

Does your company or close corporation trade under names which are different to their registered name?

The Consumer Protection Act which is likely to come into effect in October 2010 will outlaw this.

"Section 79 of the Act prohibits any person from carrying on business except under the person’s full name as recorded in an identity document or officially recognised or in the case of a juristic person (for example, a company), a business name registered with the Registrar of Companies." a

]]> This means that you can no longer buy a shelf company ABC 1043 CC and trade as "Sunrise Cafe". You will need to register the business name "Sunrise Cafe" with CIPRO. If you carry on business using a trade name that is not registered, the National Consumer Commission may require you to cease trading under that name.

Given the current state of CIPRO and its inability to process changes, you should be actioning your name registrations now!

The possible proliferation of new registered business names will mean you need to be vigilent in making sure your trade names are protected.

A glimmer of hope - if you have been actively trading using an unregistered name since at least 29 October 2009 (one year from the effective date of the act), then the National Consumer Commission cannot enforce Section 79 of the Act.

a excerpt from the article written 11 March 2010 by Thingle Pather, Director in the Department of Professional Practice at KPMG Inc and member of the SAICA Legal and Compliance Committee entitled "Consumer Protection Act to outlaw “trading as” names of companies" and published on the SAICA website.

WHY OOM JACQUES IS A HERO OF MINE

2010-03-19T08:32:12Z

I recently returned from a 2 week bicycle adventure where we cycled from Howick in Kwa Zulu Natal to Cape Town. While the 1878 kilometers proved challenging at times, it was the people that made a tremendous impact.

One particular farmer on the edge of the Karoo showed us how things should be done.

]]> On arrival at the farm we were treated to great hospitality and a tour of the farm. As a typical management consultant I continually badgered Oom Jacques with questions like what can go wrong, and what keeps you awake at night. To my surprise the answers I received were alway positive and can be summarised as follows:

Stick to your knitting - focus on what makes you money

Do things properly - including spending money on experts to supplement your weaknesses

Plan wisely - placing irrigation dams where they can gravity feed without the need for electricity may not have seemed important when electricity was cheap, but has become essential now

Family counts - no one cares for the business like an owner. To have one's family help work the land means its done with the kind of care and enthusiasm that is scarce in employees

The fruit of these comments was evident both in the impressive organisation of the farm, and in its yields. Oom Jacques has fully embraced these principles and lives them. For that and his unfailingly postive attitude, he is a hero!

2010 BUDGET : WHATS IN IT FOR ME?

2010-02-18T09:45:56Z

It is great to see that an additional R12.2 billion will be spent on child support grants, and an extra R15.1 billion for teachers (that could be nine or twelve zeros for a billion - nine I presume) but what does that mean to me and you. R12.2 billion sounds much better than an in increase of 4.17% or R10 per month for each child support grant - not even keeping up with inflation!

]]>

There is not enough relief in personal income tax to counter the effects of inflation - unless you earn less than R90,000 per year. According to Statistics South Africa, the official inflation rate at for December 2009 was 6,3%. Tax payers earning more than R100 000 received 6.1% or less relief meaning in reality, you are paying more tax.

The discontinuation of the SITE will marginally simplify your payslip but not much else...

The 25.5 cents increase in fuel taxes will have a knock on effect on household disposable income with many retailers passing the additional transport costs straight on to you and me.

A packet of 20 cigarettes will cost R1.24 more, thats an extra R37.20 per month for those pack-a-day people.

A 750 ml bottle of wine will cost 12 cents more

A 340 ml can of beer will cost 6.5 cents more

A 750 ml bottle of spirits will cost R2.22 more

To see what the effect is on your tax home pay, go to The Tax Calculator

For a more detailed look at the highlights of this years budget click here (pdf file 118kb)

BUDGET HIGHLIGHTS 2010

2010-02-18T08:54:33Z

Personal income tax relief for individuals amounting to R6.5bn.This partially compensates for inflation.
Limited voluntary disclosure option for taxpayers in default
Exchange control reforms proposed
Interest-income exemption increased to R22 300 per year and to R32 000 for those over 65
Standard Income Tax on Employees (SITE) system to be discontinued
Congestion, pollution and landfill taxes considered
Niggles remain for proposed dividend tax National Health Insurance scheme delayed for about five years
"Tips for Pravin" to continue, using Facebook and other new forms of media
Gambling winnings being exempt from personal income tax to be reviewed - impacts on casino, online gambling and lotto winners
Wage subsidy for young people
Clamp down on company car fringe benefits

For a more detailed look at the highlights of this years budget click here (pdf file 118kb)

AVOID PAYING SOMEONE ELSE'S DEBT

2009-12-11T03:52:16Z

"KZN pilot held in Dubai on debt claim" ...This was the headline of a local newspaper recently. 1 In summary the pilot signed surety for his son's debt and found himself in a jail cell as a result.

All too often people needing to raise finance are presented with a suretyship document to sign. A suretyship is an agreement to take on the responsibility of another's debt or obligation.

DO YOU REALLY WANT TO PAY SOMEONE ELSE'S DEBT?

]]> It is common practice in any financing transaction, that lenders attempt to protect their financial interests by taking some form of security from a borrower. Where the borrower's financial position is not sufficient to provide this security, the lender will invariably require a third party to sign surety. In the case of a small close corporation or company, the lender will require the directors, shareholders or members to sign this surety.

While you may not be in a position to avoid signing as surety, here are some suggestions to imit your exposure:

Sign as a limited surety -if you are a 50% shareholder or partner, take responsibility for 50% of the debt.
Don't sign as co-principal debtor (or waive the benefit of excussion) - this enables the lender to pursue you without first trying to collect the money from the lender.
Limit the amount of the surety - if the debt is for R10,000, limit the surety to this amount only. Lenders prefer unlimited surety for obvious reasons.
Define the time span you are willing to sign as surety. For exampe, if the facility is a 6 month facility, limit your surety to 6 months.

For more details on the terms used in surety documents and an explanation or these, see the article Suretyships, some things you should know

1. Natal Mercury front page 9 December 2009

RECORDS: HOW LONG IS ENOUGH

2009-11-05T03:33:46Z

"Those boxes at the back of the garage marked Accounting Records: ABC CC 1995...can I thow them away?"

How long do you need to keep those dust filed, moth eaten records that one has ever or will ever look at?

]]>

There are many pieces of legislation governing the retention and preservation of documents. These contain specific retention periods for various types of records. We have prepared a summary of those that are likely to apply to you. It is advisable to review the list of acts at the end of this article for any other acts which may be applicable to you.

Document	Retention Period
Accounting records, including supporting schedules, Annual financial statements	15 years
Statutory records (founding statements, registers, minute books, resolutions)	indefinite
Records relating to your income tax or VAT return	5 years
Electronic communication (not personal)	1 year after it stopped being used
Employee records	3 years after termination
Employee disciplinary records	indefinite

(This list is not all inclusive, and merely contains that legislation which affects a wide variety of entities)

Close Corporations Act No. 69 of 1984
Companies Act No. 61 of 1973
Public Finance Management Act No. 1 of
1999
Municipal Finance Management Act No. 56 of 2003
Basic Conditions of Employment Act No. 75 of 1997
Labour Relations Act No. 66 of 1995
Compensation for Occupational Injuries and Diseases Act No. 130 of 1993
Occupational Health and Safety act No. 85 of 1993
National Credit Act No. 34 of 2005
Auditing Profession Act No. 26 of 2005
Income Tax Act No. 58 of 1962
Value Added Tax Act No. 89 0f 1991
Electronic Communication and Transactions Act No. 25 of 2002

For more detailed information on how these acts may affect you or advice, contact Wayne 033 330 7333.

SARS CAN TAKE YOUR MONEY

2009-10-16T12:05:06Z

As part of SARS' recent media release emphasising the implementation of its new tough penalty regime, SARS is threatening to take the money from your bank or your employer.

"Can they do this?" you ask in despair.

]]> YES SARS can appoint your banker or your employer as its agent to pay over to SARS any monies due by you to SARS.

Can you do anything to prevent this?
Aspects of the constitionality of this together with sections of the Promotion of Administrative Justice Act (PAJA) have been challenged - mostly unsuccessfully. Any challenge you make would depend on your specific circumstances. You will need to seek professional advice here.

What can I do about it?
Any action by SARS affecting you needs to be procedurally fair. Section 3 of the Promotion of Administrative justice sets out some criteria for this. You have a right to know the reasons for the action taken by SARS (Section 5 of PAJA).

Practically, this should not come as a surprise to you. Before SARS undertakes drastic measures such as s99, SARS will hound you and even summons you to submit tax returns and pay your taxes. Ignore these efforts by SARS at your peril.

Take these' warnings seriously - get your affairs in order. Contact Wayne or Debbi on 033 330 7333 to find out how we can assist you.

TAX DELINQUENTS BEWARE

2009-10-16T10:53:07Z

On 14 October 2009, SARS issued a media release indicating that it would be enforcing the new penalty regime with effect from 23 November 2009. In summary, non-compliant taxpayers will attract a monthly penalty based on their income of at least R250 per month for EACH outstanding return. The details of these penalties can be found here.

]]> In the interest of fairness SARS will first impose the new penalties against repeat offenders - those taxpayers who have failed to submit returns for multiple years.

SARS believes that it is only fair on the majority of compliant taxpayers, who meet their tax obligations and willingly contribute their fair share to our country's development, but that tougher action against non-compliant taxpayers is needed.

The new penalty system provides for recurring monthly penalties for each month that an income tax return remains outstanding.

AVOID LOSING YOUR ASSETS

2009-10-01T12:32:15Z

With the introduction of Annual Returns for both Companies and Close Corporations, comes the threat from CIPRO that entities who do not submit their annual return may be deregistered. What you probably do not know is the potentially severe cost to you of this...

]]> Entities that have been deregistered by CIPRO could face any or all of the following:

The directors/members could become personally liable for any losses/liabilities at the time of deregistration.
The assets could be forfeited to the state - as the corporation or company no longer officially exists, the assets are ownerless. In terms of bona vacantia (latin common law doctrine for ownerless goods), ownerless goods revert to the state.

Now all is not lost, CIPRO will entertain the restoration of your entity, but the process is lengthy and tedious. As with SARS, I am sure you will agree, its better to just keep your affairs with CIPRO up to date.

The annual fee for a Close Corporation is presently R100, and a company with turnover of less than R50m is R450. We can help you, by making sure that your returns are submitted on time each year. Call debbi on 033 330 7333 for more information.

YOU ARE GUILTY...

2009-09-15T05:54:33Z

Chances are, you are guilty on at least one these:

Not registering as a taxpayer
Not informing SARS of your change of address
Not appointing a public officer for your CC or company
Not submitting a tax return on time
Not supplying information requested on time
Not submitting monthly PAYE declarations (if you are an employer)
Not providing SARS details of an employee
Not providing an employee with an IRP5
Providing an employee with an IRP5 before you have submitted your IRP501

Any of the above will result in SARS levying a penalty of between R250 and R768 000.

]]> On the 1 January 2009, SARS implemented new administrative penalties which are significantly more severe than those previously imposed. It has become ever more vital that you understand the potential cost of non-compliance.

The new administrative penalties are broken into two categories - fixed amount penalties and percentage penalties. The fixed amount penalties range from R250 to R768 000 depending on the length of time of non-compliance and your income. The percentage penalties amount to 10%.

Where a taxpayer has committed an offence as referred to above, the Commissioner may impose a penalty in accordance with the following table:

Item	Assessed loss or taxable income for preceding year	Penalty
(i)	Assessed loss	R250
(ii)	R0 — R250 000	R250
(iii)	R250 001 — R500 000	R500
(iv)	R500 001 — R1 000 000	R1 000
(v)	R1 000 001 — R5 000 000	R2 000
(vi)	R5 000 001 — R10 000 000	R4 000
(vii)	R10 000 001 — R50 000 000	R8 000
(viii)	Above R50 000 000	R16 000

The above amounts are imposed per month up to maximum of 35-47 month depending on the circumstances.

The minister has not yet issued the required gazette to impose the percentage based penalties, however the various acts do contains provisions allows for percentage based penalties...

Extracts from the June 2009 issue of Integritax. An article entitled "The administrative Penalties" by Edward Nathan Sonnenbergs