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Thread: Legal Ways to Pay as Little Tax as Possible

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    Question Legal Ways to Pay as Little Tax as Possible

    I find that my accountant plays a little safe. I respect her for that but no one loves paying tax unnessarily espcially in South Africa due to the corruption etc.

    Can anyone provide me with a detailed list of ways to pay less tax or a list of things I can write off against tax as a small company with only one member?

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    Diamond Member Blurock's Avatar
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    Register your dog Rambo as a security dog and put him on the payroll. You can claim all the dog food and vet expenses.
    Excellence is not a skill; its an attitude...

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    Darkangelyaya (01-Mar-13)

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    Do you think I could try that with my cat? He's really fierce. Come to think of it, he could be mistaken easily for Mapogo's poster model. Proof enough?
    ~Anything or anyone who does not bring you alive, is too small for you~ Carina
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    Diamond Member Blurock's Avatar
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    Quote Originally Posted by Darkangelyaya View Post
    Do you think I could try that with my cat? He's really fierce. Come to think of it, he could be mistaken easily for Mapogo's poster model. Proof enough?
    Nope, the dog will scare him away. Sorry.
    Excellence is not a skill; its an attitude...

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    Quote Originally Posted by fuzegraphics View Post
    I find that my accountant plays a little safe. I respect her for that but no one loves paying tax unnessarily espcially in South Africa due to the corruption etc.
    ?
    If you're asking how you can LEGALLY CORRUPT the tax system, even if there is such a thing, then it is highly unlikely that you will find answers to that on this forum.

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    Effective tax planning is the best way to pay less tax.

    Get hold of your company's latest tax return and peruse the sections Non-Taxable Amounts Credited to the Income Statement, and Special Allowances Not Claimed In the Income Statement and carefully consider each and every item there. There are 38 specific items and it is unlikely that none of them apply to you. Discuss them with your accountant after you have considered them.

    It may be that by changing how you do certain things you might be able to avail yourself of some of these allowances by doing that.

    General areas that I find where small companies can pay less tax, besides the preceding paragraphs, are:
    1) Getting full benefit from SBC breaks.
    2) Restructuring an enterprise that is marginally on the wrong side of SBC requirements, so that they are on the right side of them.
    3) Extracting profits in a way that optimizes the total tax paid. There is almost always scope for refinement here.
    4) Financed asset spends; installment sale or lease?
    5) Insurance on the lives of directors / key man policies

    Accountants have to make sense of what you have done during the year. The trick is to consult them before you do things, so that they can assist you in doing things tax effectively, rather than merely account for the tax after the event.

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    Blurock (02-Mar-13), Dave A (03-Mar-13)

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    Diamond Member Blurock's Avatar
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    Quote Originally Posted by CLIVE-TRIANGLE View Post
    Effective tax planning is the best way to pay less tax.

    Accountants have to make sense of what you have done during the year. The trick is to consult them before you do things, so that they can assist you in doing things tax effectively, rather than merely account for the tax after the event.
    Thanks Clive. My experience is that businesses that use their accountants and book keepers effectively, are usually more profitable too. People tend to skimp on paying accountants because they do not generate revenue and are therefore seen as an expense and a burden.

    A good accountant can save you a lot of money and prevent unnecessary penalties and fines to the business. A good accountant can also assist you by calculating optimum stock levels, cash flow planning and by compiling regular management reports including debtors and creditors age analysis, number of days outstanding, costing and profit margins and general management ratios.
    Excellence is not a skill; its an attitude...

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