Small business turnover tax

[Dave A]

What a lovely pre-tax profit margin

This was the SBC concession for 2008 tax year, so it might have changed some:

The first concession is to be taxed on the basis of a progressive rate system, viz SBCs tax is calculated at a rate of 0% on the first R43 000 of taxable income, 10% on taxable income in excess of R43 000 but not exceeding R300 000 and thereafter at a rate of 29% for every R1 in excess of R300 000.

The second concession is the immediate write-off of all plant or machinery used in a process of manufacture or similar process in the tax year it is brought into use for the first time. Furthermore, an accelerated write-off allowance for depreciable assets (other than manufacturing assets) acquired on or after 1 April 2005 is available at 50% of the cost of that asset in the tax year during which that asset was brought into use for the first time, 30% in the second year and 20% in the third year. [See
also under Special Allowances, par (n)]

Unless you're doing something pretty special in the way of depreciable assets, it's hard to see you doing better than an R18k tax bill for the year. Add the admin costs you mentioned for the CC and it looks like Turnover Tax is the way to go for you.

I expect SBC will become important to you once your turnover goes over R1 million per annum.