FAQ

BBBEE

BBBEE (Broad-Based-Black Economic Empowerment) is a mandated ACT in South Africa that strives to increase the number of black people participating in the country’s economy, increasing the number of black people that manage, own, control or gain employment in South Africa.

Though it is relatively new and does not meet all its intended demands through its teething stages, we see an ever increasing clamp down on fronting and misrepresentation. If your best practices are not up to standard, feel free to contact us for a strategy that’s by the book and set to get the best out of BBBEE.

Not all companies need to be BBBEE complaint, however the Government has made BBBEE the prominent means of trade and tender. Most companies will find the need to be BBBEE compliant because suppliers are BBBEE compliant and need to trade with other BBBEE complaint companies.

The short answer is no, but the long answer is yes, because if you are not BBBEE complaint you may be affected by other opportunities to trade or tender.

These terms are just B-BBEE classifications or groupings of companies according to annual turnover.

(Smallest) EME’s (Exempt Micro Enterprise) – have a turnover of R10 million or less

(Medium) QSE’s (Qualifying Small Enterprise) – have a turnover between R10 million and R50 million

(Large) GEN (Generic Enterprise) – have a turnover above R50 million

These are just the classifications, however there are multiple factors that can affect these classifications.

To find out more book a consultation with one of our consultants to get compliant today.

If your turnover is less than R10 Million you will qualify as an EME, and an automatic recognition level.

All we need to know to help you get a compliant affidavit to use for tendering purposes is proof that your turnover is less than R10 Million and a copy of your share register. Depending on the ownership within your company you will receive a level of recognition between 1 and 4.

If your turnover is less than R50 Million you will qualify as a QSE, and an automatic recognition level.

All we need to know to help you get a compliant affidavit to use for tendering purposes is proof that your turnover is more than R10 Million less than R50 Million and a copy of your share register. Depending on the ownership within your company you will receive a level of recognition between 1 and 4, but if you are a majority white owned business (50% or more will need to go through a SANAS verification to get a BBBEE certificate which we can help you with.

If your turnover is more than R50 Million you would be a Large Generic Enterprise, and you will have to undergo a SANAS verification to get a BBBEE certificate which we can help you with. contact us.

General

There’s a few things that you would need, namely the following:

  • Employee Information sheets.
  • A salary & deductions schedule for all employees.
  • A test file as well as a live file should you have a payroll system e.g. Pastel or VIP Payroll

Need some help getting this done, click here to get in contact with us and we’ll let you know what we need to get started.

  • EMP501 return
  • CIPC Annual return
  • Tax Returns
  • Workmans compensation return of earnings submission

Once Final Payment has been made, it takes up to 5 working days to generate.

A TCC (Tax Clearance Certificate) is generated by SARS for Tax Type Compliance. A Letter of Good Standing is generated by the Compensation Fund for compliance with the Compensation for Occupation Injuries and Diseases Act.

COIDA (Compensation for Occupational Injuries and Diseases Act) provides for compensation for disablement caused by occupational injuries, death or diseases sustained or contracted by employees in the course of their employment.

No, it is imperative that the company who registers for Workmen’s Compensation, appoints an officer (usually the HR department or Health and Safety officer) to oversee all processes involved with the claim.

Another entity can only assist with annual return of earnings to maintain registration and assist with payment plans from an administrative perspective.

A tender in South Africa is a bidding system in place to get the best deals with suppliers, Potential suppliers will apply for the opportunity to offer their services to the company or government entity that has issued the tender, the suppliers then offer their services in a tender application according to the specifications set out by the company issuing the tender.

Once all tenders are in and the deadline has been reached, the company will then award the tender to the best candidate that is compliant to all their needs as well as the tenders needs issued.

Simply put, you need to register a company because it becomes a registered entity, like when you are born, you are issued an Identity Number, and with that ID No you can purchase licences, properties, open bank accounts etc. like an individual, a company will have essentially the same rights as a person, but because it is not a human being that is self-sustaining, its owners, directors need to keep on updating CIPC (relate this to home affairs) regularly, pay annual fees, and abide by regulations set out in the Companies ACT.

Fraud prevention.

A Pty stands for Proprietary Limited which means it is a privately held company, and a CC which is a closed corporation are is usually chosen by smaller business owners.

A minimum of one natural person upon registration, and an unlimited maximum number of directors.

A sole trader / sole proprietor is a person trading in their own name with no legal protection under the Companies Act, the person trades with the risk all in their name, all assets and liability falls on the sole proprietor.

A sole proprietor has full control over decision making within their business, with minimal requirements to register and get trading. However the risks far outweigh the advantages of registering as a company.

Upon registration, three directors need to be appointed, and an unlimited maximum number of directors.

Normal Director, Non-Executive Director, Alternate Director

A share certificate is a certificate issued by a company certifying that on the date the certificate is issued a certain person is the registered owner of shares in the company. The key information contained in the share certificate is: the name and address of the shareholder. The number of shares held.

In order for you to buy shares, the current​owners of the company would agree to break the company into an example of 10 000 shares, each worth a certain amount. The value of the company remains at R500 000.00 (R50 share price x R10 000 shares), but you can now buy one share in the company at R50.00, or five shares at R500.

Not to be confused with a receptionist or admin clerk, a company secretary just like a secretary of state, is responsible for compliance or legislative adherence, a person who sits in meetings of all kinds, advises on the legality of decision making, a company secretary does all the companies secretarial work, administering the Share’s, MOI’s, registrations and any other secretarial duties.

Depending on the size of your business, you can outsource secretarial administrative work to be done, or you can employ an in-house secretary to maintain all legislative compliance.

This is a document that sets the terms of agreement for employment, these terms are binding, and can be bypassed if either of the parties do not adhere to the contract set out, the employment contract can protect both the employee or employer, but is mostly designed to protect the employer from insubordinate or unlawful employees who seek to tarnish the agreement of employment.

To Purchase an employment contract, click here.

Most definitely, employees are protected by regulations set by the CCMA and can take on any company for reasons that do not adhere the fair treatment of employees.

Employers can be ahead of this by implementing good practices to ensure that they are getting the best out of their employees, if they are not getting the best, they are keeping good record of all attempts to better the employee, if employee persists and resists, then the employer has fair ground to dismiss.

Follow your disciplinary procedure and dismiss your employee;

  • Employers discretion
  • Call the police and have your employee arrested, as it’s a criminal offence to steal or commit fraud.

Bank statements, creditor & debtor invoices and ledgers. (All financial records) the more supporting documentation, the better it is for accurate accounting. It has become good practice and legal standard to request all supporting documents within a business of any nature.

Annual Financial Statements are prepared annually to present the financial results of your business for the previous year ended, according to you yearend listed at CIPC.

Each registered entity must prepare annual financial statements as per the Companies Act of 2008.This can either be reviewed or audited depending on the PIC score.

UIF (Unemployment Insurance Fund) gives short-term relief to workers when they become unemployed or are unable to work because of maternity, adoption leave or illness.

if you are planning to be your own boss (entrepreneur), register immediately, never register as a sole trader, it is not worth it because you are very limited to expenses, and the tax is a marginal tax bracket (the higher you earn the more tax you pay) if you register as a company, the highest tax you will pay is currently 28% tax.

If you plan on starting a company and employing immediately, you need to register as soon as possible.

Legal

Purchase a legal consultation, click here

It is entirely up to the discretion of the person deciding to set the will up, but the benefits of setting up a will, include that you are leaving a clear legacy and instruction behind with details to your affairs and estate. You will need to appoint an executor that you trust to handle your affairs.

A will can also leave instructions to set up a trust that will be able to maintain your assets and your dependants, so when you are gone, all your possessions or loved ones will be taken care of by either your will, or your will with a trust set up.

The person or persons that you trust and nominate via your will to maintain your affairs as if you were still alive. There can be more than one nomination and a company such as TFS Independent Trustees can be appointed to maintain your affairs in your best interests that are legal and set in writing. (TFS Independent Trustees like an independent trustee should be, is an impartial third party that has no relation to the deceased and has only the best interest and sound advice on winding up estates, setting up long and short term setups for the benefit of dependents, it has become more and more necessary over time that the Master of the high Court requests or appoints an independent trustee to be a third party trustee or executor with no bias and sound advice to resolve disputes before they arise, leading to faster estate wind ups, and better trust management)

A Trustee a is a person who is nominated and has accepted the powers and rights that come with trusteeship, to administer properties, legal entities such as the welfare of dependants, investments, or assets and taxes. A trustee is a Legal representative of:

  • A Deceased person
  • A company
  • Body corporate
  • Or any entity that the trust set up was purposed for.

A trust is a legal entity that can issue and create powers for the intention to act on behalf of whatever entity it was replacing.

That’s a tricky one, though a trust for a business adds measure of control to the heirs of the owner, it also stipulates actions to be taken to continue the legacy of the business, especially small business owners who have spent a lot of time building their legacy. The other benefits include; eliminating estate taxes upon death of the owner as part of the trust set up, the family business continues as per instruction, and the business won’t be sold to cover taxes and creditors.

As soon as you have realised that you want your success to continue in the form of your family legacy. Set up a trust that realizes your needs beyond your time left here as an entrepreneur.

A Trustee a is a person who is nominated and has accepted the powers and rights that come with trusteeship, to administer properties, legal entities such as the welfare of dependants, investments, or assets and taxes. A trustee is a Legal representative of:

  • A Deceased person
  • A company
  • Body corporate
  • Or any entity that the trust set up was purposed for.
  • Living Trust also known as an inter vivos trust (there are two types of Living Trusts)
  • Living Trust Type One – Vested Trust
  • Living Trust Type Two – Discretionary Trust
  • Testamentary Trust
  • Bewind Trust

A Vested Trust Beneficiaries are set out in the trust deed, little control is given to trustees to do as they please.

A Discretionary Trust, trustees have full discretion and control over the beneficiaries and welfare
Testamentary Trust, is a trust set up through a will of a deceased person, usually created for the intention of maintaining minor children into their adulthood, if a trust is not set up in a will, the estate is sold off and monies will only be paid out when the minors come of age to benefit from the estate.

Bewind Trust, created for the interest of trade, with very little liability for the trustees maintaining the trust, there are certain tax advantages to this type of trust, but is not to be confused with an ownership trust, the Bewind Trust clearly states it is used to purchase property, transfer ownership to the trustees, for the benefit of the beneficiaries, it may be transferred to the beneficiaries but ownership will remain the trustees and not the beneficiaries.

Registrations

Should all documents be correct and no further documents are required by SARS, the registration should take up to 10 working days. Keep in mind that SARS more than often requires additional documentation therefore this process could take longer; but it all depends on SARS.

It is compulsory to be registered with the Compensation Fund if you have one or more employees.

You may do an optional VAT registration once your turnover exceeds R50 000.00 in a 12 month period, but once your turnover exceeds R1 000 000.00, Vat Registration is compulsory.

Any person who receives income (or to whom income accrues) other than a salary, is a provisional taxpayer. A provisional taxpayer is defined in paragraph 1 of the Fourth Schedule of the Income Tax Act, No.58 of 1962, as any –

  • natural person who derives income, other than remuneration or an allowance or advance as mentioned in section 8(1);
  • company; or
  • person who is told by the Commissioner that he or she is a provisional taxpayer.

if you are planning to be your own boss (entrepreneur), register immediately, never register as a sole trader, it is not worth it because you are very limited to expenses, and the tax is a marginal tax bracket (the higher you earn the more tax you pay) if you register as a company, the highest tax you will pay is currently 21% tax.

If you plan on starting a company and employing immediately, you need to register as soon as possible.

SARS

SDL (Skills Development Levy) is an optional Tax that the employer will be held liable for, one percent of every employee’s salary is matched by the employer and paid in the form of tax to SARS, SARS then issues the SDL spend to the Department of Higher Education who then oversees each sector of business known as a SETA

There are 27 SETA’s in South Africa, these SETA’s are the appropriate channels to secure that you get your spend back to develop skills in your company.

See it as tax that can be spent later on development (HOT TIP: you can use SDL to better your BBBEE score rating)
However, SDL becomes Mandatory if your Annual payroll exceeds R500 000.

Not Registered for SDL? Click here to purchase a PAYE Registration (which can include SDL if requested).

Easy peasy, use Tax Tim on our site, Tax Tim is a regularly updated Tax calculator that covers, PAYE (Pay as You Earn), UIF (unemployment Insurance Fund), SDL (Skills Development Levy).

PAYE (Pay as You Earn) is a Salary Tax that employers need to pay over to SARS on a monthly basis, if you are a business owner you have to be drawing a salary from the business in order to pay PAYE.

This is a compulsory tax that needs to be paid over to SARS on a monthly basis in order to avoid penalties. If you avoid this tax it is a criminal offence.

Not Registered for PAYE? Click here to purchase a PAYE Registration.

UIF is calculated at 1% of the salary you pay your employee but is capped at R14 872, you deduct 1% from your employee’s salary, and pay another 1 % over to SARS as your cost and contribution towards UIF.

PAYE in the form of an EMP 501 submission

CIPC annual return to keep your business registered to keep trading.

Tax Returns

Workmen’s Compensation Return of Earnings

TFS BizHub.

A TCC (Tax Clearance Certificate) is generated by SARS for Tax Type Compliance. A Letter of Good Standing is generated by the Compensation Fund for compliance with the Compensation for Occupation Injuries and Diseases Act.

Not always, only if you have been selected for audit, or if you have submitted less tax than the previous year.

If you are submitting less tax, and get selected for an audit, SARS needs to know why there is less income, and is it something permanent or just for the current year. SARS systems look for consistencies, and also select randomly as well.

You can expect the following:

  • The Notification of the audit will indicate the initial scope of the audit;
  • The SARS Auditor will produce an Authorisation Letter where a field audit is conducted;
  • Progress reports of the stage of the audit will be issued at intervals of 90 calendar days from the date of the notification of the audit;

If you have a refund due, the refund will not be paid out during the execution of the audit.

The progress reports may not apply if SARS is of the view that it will impede or jeopardise the outcome of the audit.

By its nature, an audit is a more intrusive process than a verification and the scope could be extensive. The audit could be completed within anything from 30 business days to 12 months, or even longer, depending on the complexity of the matter, the volumes of transactions involved and the level of co-operation by the taxpayer.

SARS can request additional or further relevant material throughout the audit. If you do not respond by submitting the relevant material when requested, SARS will raise an assessment based on information readily available or obtained from a third party.

Should you require any further assistance, contact the SARS official mentioned in the Notification of audit letter.
Top Tip: It is better to respond to all queries straight away. Taxpayers whom are obstructive could face higher penalties should it be found that an understatement occurred.

This is your annual Tax Certificate which summarises your annual earnings and deductions and is used to file your income tax return.

An IT 34 is a notice of Assessment from SARS, which summarises that specified year’s taxable income and deductions. Should you not agree with SARS’s assessment, you can dispute it and submit supporting documents for your claim that SARS is in error.

Administrative penalties and interest is charged on non-compliance, non-compliance is a criminal offence and could lead to legal action or imprisonment, and could be seen as evasion.

Provisional tax is not a separate tax. It is a method of paying tax due, to ensure the taxpayer does not pay large amounts on assessment as the tax liability is spread over the relevant year of assessment. It requires the taxpayers to pay at least two amounts in advance during the year of assessment which are based on estimated taxable income. A third payment is optional after the end of the tax year, but before the issuing of the assessment of Final liability, however, this is worked out upon assessment and the payments will be off-set against the liability for normal tax for the applicable year of assessment.

Load More