Results 1 to 9 of 9

Thread: Assistance with new small business

  1. #1
    New Member
    Join Date
    Oct 2011
    Location
    South Africa
    Posts
    4
    Thanks
    6
    Thanked 0 Times in 0 Posts

    Question Assistance with new small business

    Hi guys, I need a little help and your combined expertise.

    For little over two months I've been running a small unregistered IT Service Sole Proprietor business. An example of how I would operate is:

    Client calls with a PC problem, I bill them R100 for the call-out and then between R200-R500 for the actual job.

    What I need to know is:

    1. What would be the best way to personally do my books and keep track of things?
    2. Can I claim anything back as a Sole Proprietor?
    3. As a purely service orientated business, what can I expect to be taxed percentage wise using the above example?
    4. What exactly do I need to keep as far the business goes in terms of paperwork?
    4. How can I save money doing all the above?

    I'm the kind of guy that simply just wants to go and see clients and honestly have very little patients for admin work but at the same time, I can't really afford someone to do it for me at this point so I'm willing to learn and quite simply HAVE to do it myself for now.

    Any and all help will be appreciated guys.

    - Shaun

  2. #2
    Gold Member Singhms's Avatar
    Join Date
    Oct 2008
    Location
    Pretoria (National)
    Posts
    977
    Thanks
    161
    Thanked 52 Times in 48 Posts
    1. Use a basic accounting package or spreadsheet to keep track of income and expenses
    2. All the normal things related to your business use that a cc\pty would
    3. The full companies tax 28% (Small business tax does not apply to service businesses)
    4. Invoices mostly
    5. keep good records in an orderly manner and hand to an accountant to do yearly taxes\provisional taxes

    This is to the best of my knowledge
    Visit our online store SINGHMS RETAIL and sign up to receive a 10% discount off your first purchase.
    Follow us on our facebook page SINGHMS RETAIL FACEBOOK for instant updates.
    New products and discounts added daily.

  3. Thanks given for this post:

    ShaunK (12-Oct-11)

  4. #3
    Gold Member Mark Atkinson's Avatar
    Join Date
    Jul 2010
    Location
    Durban, South Africa
    Posts
    796
    Thanks
    212
    Thanked 150 Times in 117 Posts
    Blog Entries
    12
    Quote Originally Posted by Singhms View Post
    3. The full companies tax 28% (Small business tax does not apply to service businesses)
    Sorry to interject Amith, but I believe as a sole prop he will not be taxed at the companies tax rate of 28%. Income from the business will be added to any other income streams he may have and he will be taxed in his personal capacity according to the applicable tax bracket which he finds himself in.

    So, Shaun, your taxation percentage will all depend on how much taxable income you are generating per annum. See: Tax Brackets for the 2012 financial year
    "The way to gain a good reputation, is to endeavor to be what you desire to appear." - Socrates
    Mark My Words - Arbitrary thoughts on ordinary things

    LinkedIn | Twitter

    Bafokke Shirts - South Africa's No. 1 Fan Shirt!

  5. Thanks given for this post:

    ShaunK (12-Oct-11)

  6. #4
    New Member
    Join Date
    Oct 2011
    Location
    South Africa
    Posts
    4
    Thanks
    6
    Thanked 0 Times in 0 Posts
    Thanks for the reply guys, very useful info there.

    Anyone else wanting to add anything of note?

  7. #5
    Gold Member Mark Atkinson's Avatar
    Join Date
    Jul 2010
    Location
    Durban, South Africa
    Posts
    796
    Thanks
    212
    Thanked 150 Times in 117 Posts
    Blog Entries
    12
    Actually, yes.

    Make sure you keep records of everything relevant to the business. Invoices to customers, till slips, receipts etc. If you are planning on deducting vehicle/petrol expenses for your business, you need to keep a log book for all your business travel. You can only deduct the business portion of your travel expenses for tax purposes. Any marketing/stationery expenses can be deducted at year end because they are in the production of income, so keep a record of these.

    If you don't want to learn the ins and outs of an accounting package. I believe that for your purposes setting up a simple Excel spreadsheet where you record all your income and expenses should be sufficient. Make sure you keep all the relevant documents and then hand this all to a tax consultant/accountant at year end. If you're expecting a highish taxable income, you may wish to apply to be a provisional tax payer. (To avoid having a large sum of tax to pay at the year end)
    "The way to gain a good reputation, is to endeavor to be what you desire to appear." - Socrates
    Mark My Words - Arbitrary thoughts on ordinary things

    LinkedIn | Twitter

    Bafokke Shirts - South Africa's No. 1 Fan Shirt!

  8. Thanks given for this post:

    ShaunK (13-Oct-11)

  9. #6
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,980
    Thanks
    3,055
    Thanked 2,463 Times in 2,068 Posts
    Blog Entries
    12
    Quote Originally Posted by ShaunK View Post
    Anyone else wanting to add anything of note?
    Be disciplined. Do the stuff you don't like first.

    If you don't enjoy admin, make a point to get it done first thing in the morning.
    Every morning.
    The trouble with opportunity is it normally comes dressed up as work.

  10. Thanks given for this post:

    ShaunK (13-Oct-11)

  11. #7
    Gold Member Singhms's Avatar
    Join Date
    Oct 2008
    Location
    Pretoria (National)
    Posts
    977
    Thanks
    161
    Thanked 52 Times in 48 Posts
    Mark, you are right.

    Completely slipped my mind, I was actually just discussing this with my accountant 2 weeks back

    This is where the turnover plays an important part. Below a certain level you can score being a sole prop.
    Visit our online store SINGHMS RETAIL and sign up to receive a 10% discount off your first purchase.
    Follow us on our facebook page SINGHMS RETAIL FACEBOOK for instant updates.
    New products and discounts added daily.

  12. #8
    New Member
    Join Date
    Oct 2011
    Location
    South Africa
    Posts
    4
    Thanks
    6
    Thanked 0 Times in 0 Posts
    Thanks for all the advice guys, was really helpful and appreciated.

  13. #9
    Full Member
    Join Date
    Oct 2011
    Location
    Gordon's Bay, Western Cape
    Posts
    67
    Thanks
    2
    Thanked 2 Times in 2 Posts
    Hi there,

    Find below, my response to your post.

    1. What would be the best way to personally do my books and keep track of things? - I personally make use of a very nice, and free ;-), accounting suite called Adminsoft Accounts (Google it). Works real nice and easy to learn.
    2. Can I claim anything back as a Sole Proprietor? - I would guess you could claim back exactly the same as you would as a individual taxpayer. Even though, I would suggest that you consider registering a (Pty) Ltd, with fixed tax rates of 28% (provided you ascertain that you will be taxed more than 28% as an individual), Suggest you visit www.register-a-business.co.za as I used them a while ago, and they really make the process a lot easier.
    3. As a purely service orientated business, what can I expect to be taxed percentage wise using the above example? See above.
    4. What exactly do I need to keep as far the business goes in terms of paperwork? Just retain all invoices, statements, ect.

    Thanks,
    Mr. Smit

Similar Threads

  1. Small business help
    By Major in forum Tax Forum
    Replies: 5
    Last Post: 21-Aug-11, 12:39 AM
  2. [Question] Tax on Small Business
    By Ant15 in forum Tax Forum
    Replies: 3
    Last Post: 13-Jun-11, 11:15 AM
  3. Business Development Assistance
    By Gary Simmonds in forum Business Finance Forum
    Replies: 1
    Last Post: 13-Sep-10, 11:39 PM
  4. Small Business Tax
    By vamily0804 in forum Tax Forum
    Replies: 11
    Last Post: 19-Feb-10, 06:19 AM
  5. Small business week
    By duncan drennan in forum General Business Forum
    Replies: 12
    Last Post: 19-Aug-07, 03:32 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •