Should I be paying tax?

by with No Comment Employee TaxLatest Payroll NewsPAYETaxUncategorised

Should I be paying tax?

It’s something we all wish we did not have to pay and it is one question  that comes up time and time again. There a many questions the average employee or even employer asks and many of them one would assume have obvious answers but tax does not have obvious answers and it is dangerous to hazard a guess when discussing tax and answering questions such as laid out below.

Question:

I earn a basic wage of R1720.00 per week and I have deductions.

My deductions are:

UIF = R17.00

Provident Fund = R111.00

Council Levy = R2.50

Union Fee = R14.05

Sick Fund = R25.80

Funeral Fund = R1.80

Should I be paying tax?

Answer:

R73,650 is the annual tax threshold for the current year and this means anyone who earns less than this will not pay tax.

R73,650 equates to R6137.50 a month or about R1416 per week.

If you earn R1720 per week this is above the weekly threshold and thus you quality to be taxed on the earnings value only. There could well be a few deductions that could bring the amount down and thus below threshold, all the deductions in the example above are tax deductions and the table amount will remain at R1720.

The answer to the question in a nutshell is that PAYE should be deducted from your earnings.

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THE NEW INCOME TAX RETURN FOR TRUSTS (ITR12T)

by with No Comment Employee Tax

What is it?

SARS is improving the Income Tax Return for Trusts. The current form (IT12TR) was redesigned and automated. The new form will be called the Income Tax Return for Trust (ITR12T).

When is it coming into effect?

The new form (ITR12T) will be available in October 2014.
We will not be able to accept the old IT12TR after the date the new ITR12T becomes available:
  • Manually completed IT12TRs – All IT12TRs received at a SARS branch or by post, including a SARS drop box, after 3 October 2014 won’t be accepted. A letter will be sent to you asking you to complete the new ITR12T online.
  • eFiling submissions – If you’ve saved your return (IT12TR) on eFiling but haven’t sent it by 3 October 2014, you will be able to view and print your old return (IT12TR), but you will need to manually transfer the information to the new ITR12T online for completion and submission.

How will I get the new form (ITR12T)?

The new form (ITR12T) will be available on eFiling or may be filled in at a SARS branch on behalf of the representative/Tax Practitioner.
A draft version of the new ITR12T is available for downloading. Should you visit a SARS branch for help, you’ll need to fill it in before going to the branch.
Top Tip: Asking for the ITR12T to be posted to you will no longer be an option.

What are the benefits?

  • You’ll be able to create your own return by tailoring the form to your specific needs
  • The new form has been enhanced to help taxpayers to produce an accurate return, helping them to be compliant.

Need help?

Source: http://www.sars.gov.za/ClientSegments/Businesses/Trusts/Pages/default.aspx

THE EFILING INBOX

by with No Comment Employee TaxUncategorized

What is this?

In SARS’ ‘go green’ drive; to create a paperless environment and to reduce our carbon footprint, we have created a consolidated electronic notification centre where eFilers will be able to get all SARS correspondence in the form of inbox messages.

The new eFiling inbox will be available for all notices and letters relating to your Income Tax Return (ITR12) submitted to SARS via eFiling.

How can I view notices and letters in my eFiling Inbox?

The inbox will be available on all the eFiling profiles including:

  • Individuals
  • Organisations and
  • Tax Practitioners.

1. To access the eFiling inbox, on your profile click

  • Returns then
  • Inbox then
  • Notifications

2. The Notification Centre Inbox screen will be shown. Various search options will be available to use.

Top Tip: No correspondence will be shown, if no return(s) have been submitted.

3. When selecting From Date or To Date, a calendar will be shown. Select the relevant dates.

4. Choose which correspondence you want to see:

5. Click Search to retrieve the correspondence or Clear Search to start again.

6. Once the search has been done and if there are corresponde available, these will be listed in the eFiling inbox.

Top Tip: A maximum of 20 correspondence will be listed per page.

7. Click on the correspondence you want to view. A View Notification message will be shown.

8. Click View Notice.

9. Select Close to close message and view another correspondence or Continue to Workpage to return to the Income Tax Work Page.

10. You can remove a correspondence by selecting it and clicking Remove from Inbox.

11. You will receive a confirmation message, click Delete to continue.

Top Tip: Correspondence are automatically deleted from the inbox after 30 days, but will still be available under the SARS Correspondence function.

12. If want to mark a correspondence as unread, select it and click Mark as Unread.

13. You will receive a confirmation message.

Which notices and letters will be on the eFiling Inbox?

  • Assessment Letter
  • Operations First Letter 1
  • Operations First Letter 2 – Revision failed letter
  • Operations Final Demand 1
  • Operations Final Demand 2
  • Enforcement First Letter
  • 3rd Party Letter
  • Completion Letter
  • Engagement Letter
  • Findings Letter
  • Request for Supporting Documents
  • Auto Finalisation Letter
  • Add Request to verify the bank details letter.

Employers – Get ready for the 2014 Employer Annual Reconciliation

by Employee TaxEmployeesEmployers

Download 2014 tax guide here (pdf)

Dear Employer

From 1 April 2014 it will be time to submit your Employer Annual Reconciliation for the period 1 March 2013 to 28 February 2014. You are encouraged to submit your reconciliation early as this will give you time to resolve any issues which may arise.

To help you get ready to submit, we would like to tell you about the changes you may expect this year:
• Updated version of e@syFile™ Employer available
Remember to always backup your current information on your computer prior to installing a new version of e@syFile™ Employer, as the installation may delete your current information.
• Employment Tax Incentive (ETI) included in the reconciliation submission
The ETI came into effect on 1 January 2014 which encourages private employers to employ young workers by providing a tax incentive. Qualifying employers are able to claim the ETI and reduce the amount of Pay-As-You-Earn (PAYE) payable to SARS. To see if you are a qualifying employer or employed qualifying employees visit www.sars.gov.za > Tax Types > PAYE > Employment Tax Incentive. Any amounts claimed for ETI on your Monthly Employer Declaration (EMP201) must be included in the spaces provided when completing your annual reconciliation submission.
• Completing the Employer Reconciliation Declaration (EMP501)
Make sure you enter the correct amounts for each month.
∙ The Gross PAYE before the ETI deduction must be completed.
∙ The Total actual payments after the ETI deduction must be completed.
∙ The ETI details section is mandatory, if you are claiming the incentive.
∙ Read all notes provided carefully, while completing the EMP501.

• The ETI supporting data must only be submitted when requested by SARS
For now, the ETI supporting data should not be included in the IRP5/IT3(a) file created by payrolls. The ETI supporting data requirements have been listed in Appendix C of the Business Requirement Specification: PAYE Employer Reconciliation (including the Employment Tax Incentive requirements).
• New source codes [IRP5/IT3(a)] ETI (4118) – The sum of the ETI amounts calculated (theoretical amounts) for the employee during the year of assessment. The value of this code cannot be a negative.
• Updated source codes [IRP5/IT3(a)] ∙ Code 3703 may not be reflected on an IRP5/IT3(a) together with code 3701 and/or 3702. The value of code 3703 must be included in the value of code 3702 under these circumstances.
∙ Code 3802 – Use of motor vehicle acquired by employer NOT via Operating Lease (PAYE). Code 3852 MUST only be used for Foreign Service income.

• The postal address information for employees has been updated to align to the new SARS structure [IRP5/IT3(a)] These fields must be updated before you submit your reconciliation. The requirements are listed in Appendix D of the Business Requirement Specification: PAYE Employer Reconciliation (including the Employment Tax Incentive requirements).
• The Standard Industrial Classification (SIC7) code has been included
The list of the codes is available in Appendix E of the Business Requirement Specification: PAYE Employer Reconciliation (including the Employment Tax Incentive requirements).
Please note: Retirement Funds/Fund Administrators are required to submit the SIC7 codes. Code 64300 must be entered, which is the “trust, funds and similar financials entities” code. This information will be excluded for the 2015 Employer Interim Reconciliation submission.
Don’t forget the following important details:
• Reconciliation submission may only be submitted to SARS from 1 April 2014
• eFiling may be used as a submission channel where you have 20 or less IRP5/IT3(a)s to submit with your EMP501
• Complete accurate reconciliation documents
• Submit your reconciliation documents before the deadline of 30 May 2014
• The latest Business Requirements Specification (BRS) is available on the SARS websitewww.sars.gov.za

For more information visit the SARS website on www.sars.gov.za, call the SARS Contact Centre on 0800 00 SARS (7277), or visit your nearest SARS branch.

Sincerely

SOUTH AFRICAN REVENUE SERVICE

Administrative Penalties for PAYE non-compliance

by with No Comment Employee TaxPAYEPenaltiesSARS

This notice appears on the SARS website.
A number of Employers have still not complied with 3 June 2011 submission for the annual Employer Reconciliation Decleration and as a result, SARS will now, impose penalties in relation to PAYE transgressions, allowed in terms of the 4th schedule of the Income Tax Act no 58 of 1962.

For PAYE Tax, the administrative penalty will be imposed:

Where the employer:

1) Does not submit the annual EMP501 reconciliation

2) Does not pay the total PAYE amount that was declared in the Employee Tax Certificates[IRP/IT3(a)] over to SARS, even where the return has been submitted on time, andSubmits incorrect, incomplete or inaccurate data within the IRP/IT3(a) certificates, evenwhere the return has been submitted on time.

Then  a percentage based penalty equal to 10% of the total PAYE paid for the period (this is a once off penalty), and there will be an adjustment of the penalty, calculated on a percentage sliding scale

based on the date that the non-compliance was remedied over a period of 9 months, e.g if the

remedied in the first month from imposition, then the 90 % of the 10% penalty will be waived.