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Thread: PAYE for businesses

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    Platinum Member Chatmaster's Avatar
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    PAYE for businesses

    The funniest thing has been happening the last couple of weeks. On two occasions 2 separate, very reputable training companies for which I do lecturing wanted to deduct 30%+ of our invoice for PAYE. Now if I was an individual I could understand that, but these are invoices through 2 of my CC's one is even VAT registered. So the one finance manager told me to phone SARS and take it up with them! Geeeezzzzzz

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    Gold Member garthu's Avatar
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    I would very interested in the response once done cause that really doesn't sound right! Sounds more like they got the wrong info... Convincing them otherwise should also be interesting
    Garth

    Electric fence Installation : www.midrand-electronics.co.za
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    Site Caretaker Dave A's Avatar
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    Ask for an IRP5

    Just in case it's a cash flow dodge...
    Last edited by Dave A; 24-Mar-09 at 09:05 PM.
    The trouble with opportunity is it normally comes dressed up as work.

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    Platinum Member Chatmaster's Avatar
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    I spoke to my auditor about it. CC's and Pty's do not pay PAYE for logical reasons. Their scemes are simple, they get a VAT invoice, deduct 33% of the payment for "PAYE" and then claim back the 14% VAT which cuts their expenses by half. After a while when SARS are all over the individual for outstanding PAYE, they simply state that they have no idea what we are talking about, they were invoiced by a company and are therefore not legally responsible for the deduction of the PAYE as it wasn't an individual.

    Just the pure arogance makes me angry, grrrrrr

    We will ask for the IRP 5, which means they will urgently need to get the individuals details because they certainly can't make it out to the CC's. Needless to say that creates a completely new problem as the invoices comes from the company and the tax and PAYE are also done through the CC's, we are going to have a couple of headaches with our books and it is peeving me to waste valuable time on their greed.

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    Site Caretaker Dave A's Avatar
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    This is going to be even sweeter if the liability was incurred in the 2009 tax year. Too late to go fiddling with EMP201 returns
    The trouble with opportunity is it normally comes dressed up as work.

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    Are they trying to claim that you as the training facilitator are an independant contractor. (Which means that 80% of your income must come solely from their company before they are legally responsibile to ensure SITE is deducted?).
    Site could never ever be deducted from a formal invoice.

    Even if you were an "official" independant contractor, you would not issue an "invoice".
    There are no invoices involved for an independant contractor as far as I know. The person goes on the payroll for a "contracted" figure.

    A letter to them stating that you confirm that your income from other sources exceeds the requirement of an independant contractor, should be sufficient to sort out this problem.

    I personally would completely refuse to participate in the IRP5 route!
    The full amount of the invoice must be paid, and I would proceed to treat it as a overdue invoice.
    There would never be an opportunity for them to deduct a % for taxation from the invoice on these grounds.
    Advise them that as your invoice is a formal invoice from a CC or company (especially registered for Vat), the legal responsibility for taxation is your own! and that they have no grounds for deducting any taxation from the invoice.

    Yvonne

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    Chatmaster (25-Mar-09), duncan drennan (25-Mar-09)

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    Site Caretaker Dave A's Avatar
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    Yvonne, you're right - but
    Quote Originally Posted by Yvonne View Post
    I personally would completely refuse to participate in the IRP5 route!
    I've got a hunch this might flush out any mischief right quick, particularly given the timing.

    And what a perfect paper trail.

    They have already said "talk to SARS." Rather than butt heads, sometimes it's smarter to adopt a different angle of attack.

    This example is also food for thought on the practical implications of turnover tax.
    The trouble with opportunity is it normally comes dressed up as work.

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    you lost me... Probibly why I still only urn R3000 a month...

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    Gold Member garthu's Avatar
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    very reputable training companies
    Aha!

    It's amazing what people can up with times are tough. Makes sense but would NEVER have thought of something like that! However, they are playing with the devil! When SARS catches up, there'll be hell to pay
    Garth

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    Our auditor suggested that we watch a program on Summit Television - on Channel 415 DSTV at 5.20 TONIGHT!

    A discussion on new business regulations: he said it is a possibility that the government are going to reduce the "audit" requirements and possibly going to increase the threshold of turnover, (Higher than the present discussions of R1,000,000) - imagine the chaos if the average small business is no longer required to retain "the paper trail", and only pays a turnover tax!
    Yvonne

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    Dave A (25-Mar-09)

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