March 18, 2024

Maximising Wealth, Minimising Tax

A comparative look at retirement annuities versus tax-free savings accounts. When it comes to personal finance, every individual has different needs, dreams and financial goals, as well as different pathways to achieving those objectives. One of the most common long-term ambitions shared by many South Africans is to retire comfortably—to live confidently, knowing that there are enough funds available to cover your basic needs. Making regular contributions to a retirement annuity (RA) and supplementing it with a tax-free savings account (TFSA) can be an effective way of getting there. The golden thread: Cashing in on the tax benefits RAs and […]
March 18, 2024

The Business of Business Travel

Business travel means different things to SARS than to taxpayers. While it has been compulsory for recipients of travel allowances to substantiate their claims by means of a detailed logbook for some years, it has become ever more critical to understand exactly what SARS understands by the term ‘business travel’. The simple reason for making the distinction is that business travel is claimable, while private travel is not. So since private travel is not claimable, let’s get that one out of the way up front. The obvious forms of private travel include any travel that relates to your domestic activities—going […]
March 18, 2024

Paying Salaries: What Can Go Wrong?

South African businesses face unique payroll challenges. From strict regulatory requirements to the specific needs of a diverse workforce, managing payroll requires precision, understanding, and the right approach. Here are some critical payroll mistakes businesses often encounter and our expert advice on how to avoid them: Misclassifying employees In South Africa, the distinction between independent contractors and full-time employees is significant, affecting everything from tax obligations to benefits. Misclassification can lead to penalties from the South African Revenue Service (SARS) and disputes with employees. Ensure you’re familiar with the definitions and classifications as per labour laws and classify your employees […]
January 18, 2024

Beware of Tax-Related Scams

Over the past five years, the SAFPS has seen a steady increase in the number of tax-related scams. Improved efficiency To improve efficiency when it comes to processing tax returns, and to encourage individuals and businesses to file their tax returns timeously, SARS launched its eFiling service in 2000. This allows taxpayers to file their returns electronically. Unfortunately, this provided scammers with increased opportunities to turn taxpayers into fraud victims. Fraudsters use a very focused modus operandi when running this scam. In the weeks following the tax deadlines, taxpayers will typically receive an SMS informing them that they have yet […]
January 18, 2024

Overcome Your Shopping Addiction

Shopaholism, or compulsive shopping, is a behavioural issue that has become increasingly prevalent in the era of easy online shopping access. While it may seem harmless initially, shopaholism can quickly escalate, significantly affecting an individual’s life in various negative ways. Can shopaholism be considered a real addiction? Shopaholism or compulsive shopping is recognised as a behavioural addiction. It shares many characteristics with other addictive behaviours, such as an inability to control the behaviour, continuing the behaviour despite negative consequences, and experiencing withdrawal symptoms when attempting to stop. The negative impacts of shopaholism Shopaholism often leads to severe financial instability as […]
January 18, 2024

From Departure to Encashment

How the two-pot retirement system impacts expats The much-anticipated two-pot retirement system, introduced as a ‘knight in shining armour’ for South Africans, has received a new implementation date of March 2024. Expats are cautioned to pay attention to the effects that this will have on the encashment of their retirement savings. While many have addressed the two-pot system and its possible effects on South African residents, very little has been outlined regarding the practical impacts this system will have on South Africans who have ceased their tax residency—the expats. A brief recap Expats have faced quite some challenges with encashing […]
January 18, 2024

It’s bonus time – but oh, the tax!

Unfortunately, it seems that The Grinch now works for SARS! How did the Grinch steal Christmas? In the beloved children’s story written in 1957 by Theodor Geisel, better known as ‘Dr Seuss’, we are introduced to this grouchy, solitary creature, the Grinch, who tries to cancel Christmas by stealing Christmas gifts and decorations from the homes of the nearby town of Whoville on Christmas Eve. In the book, the Grinch realises that Christmas is not all about money or presents. Unfortunately, for the Grinches that work for SARS, it seems that Christmas is all about tax—especially when it comes to […]
January 18, 2024

Don’t lose that tax loss!

Sustaining losses on certain activities, blissfully assuming that SARS will chip in at year-end? Make sure that this loss is not ‘lost’ forever. Many people have invested in second properties based on the knowledge that, for the first few years at least, they would have to fund the shortfall until such time as the rents escalated to a level whereby a profit would be shown. In fact, given the massive increase in property prices over the past 20 years, many such investors didn’t even care that they were losing money on a monthly basis, since the capital gains would more […]
January 18, 2024

General principles for tax deductions

When can you deduct an expense?  Section 11(a) contains the general principles One of the most-asked tax questions goes along the lines of “can I deduct xxx against my income?” There are two ways to answer this type of question. One is to create a never-ending list of every type of deduction one could contemplate, together with its exceptions, circumstances under which such expense cannot be deducted, and so forth. The other is to explain the general principles that apply to claiming a particular expense as a deduction. However, before one even gets down to the criteria for deductibility, there […]
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