How to get the tax basics right for your SME
Everything you need to know about meeting your obligations
Every business comes with some paper work.
As a business owner it’s part of your responsibility to make sure that all your documents are in order to avoid getting into trouble with the tax man, says Madelein van der Watt, development manager at Sage Pastel Payroll and HR.
A business owner’s tax obligations
The annual employer Filing Season opens on the 1 April. Employees can submit their tax return to SARS from 1 July.
With regards to employees, the employer is responsible for the following: deducting taxes from employees on a monthly bases, filing a range of submissions to SARS, and supplying employees with IRP5 certificates that they will also submit to SARS.
The employer also needs to register all employees whom are formally employed in the business for income tax.
Declarations and forms to submit
Van der Watt advises that all employers be aware that they need to submit the following documentation:
1. Monthly Employer Declaration (EMP201)
This form declares the following deductions: PAYE (Pay as You Earn), SDL (Skills Development Levy) and UIF (Unemployment Insurance Fund) contributions.
Submission date: This is submitted by the seventh of each month.
2. Employer Reconciliation Declaration (EMP501)
Twice a year the employer must file this reconciliation of all amounts paid to SARS on behalf of employees.
Submission date: This is submitted in September/October for the six months from 1 March to 31 August and the final annual EMP501 submission is done during April and May for the tax year 1 March to 28/29 February. The next deadline is 29 May 2015.
3. Employee Tax Certificates (IRP5/IT3(a))
The employer must provide these tax certificates to employees after each tax year, and they will submit them to SARS.
Submission date: After April 1st of the relevant year.
4. Other documentation
Employers are also required to submit Cancellation of Tax Certificates (EMP601, and the Adjustment to Annual Reconciliation (EMP701) – the employer submits this form when they need to make adjustments to past reconciliation and declarations
Paper versus online
SARS no longer accepts paper-based declarations for companies with more than five employees. If the business has more than 20 employees, the employer will need to do most of their reconciliations and declarations electronically using the e@syFile software which can download it from the SARS website www.sarsefiling.co.za. Those will less than 20 employees can also use the eFilling website to avoid the long queues.