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Hi, please can somebody direct me. We are a CC with two members only operating since Jan 2011.Our salaries drawn for last year were only R30 000 each and it was not monthly as the year was slow, so when we could we took a salary. Do we have to paye , uif on this amount etc as we are below the threshold. No deductions were taken off because I was unaware I should as we are members.What should be deducted when we are able to take a salary , and do we file a personal IT12 for the amounts taken as a salary . Can somebody direct me .
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to the best of my understanding, your cc membership status is not relevant. What does count is if you are an employee of your (own) cc - in other words if you receive a salary from the cc. In this case you pay paye for the salary if above threshold. UIF should be paid on all salary ( including members salary ) upto a certain ceiling. I don't believe that UIF has a minimum threshold and should be deducted and paid from the salary you draw.
The company should issue you with a year end IRP5 ( if PAYE paid ) or an IT3A if no PAYE deducted. Use e-Filing to submit the monthly PAYE / UIF returns, and easyFiling to submit the bi-annual returns and create the IRP5 / IT3A's
Suggest you get your accountant involved.Watching the ships passing by. -
I may be out of date, but it used to be you could only register a cc for PAYE if it employed someone who earned an income above the tax threshold. And that is certainly not the case here.
If that is still true, making payments for UIF via eFiling is not an option; you would then file the returns and pay via uFiling.
So I guess the question is - does a cc have to register for PAYE even if it doesn't employ anyone earning enough to warrant a PAYE deduction?
Anyone know for sure what the current position is?Participation is voluntary.
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Daveob is right. You were supposed to have paid UIF and submitted tax returns and all those other exciting forms he mentioned. You would not have had to pay PAYE though as at R30k / year you are below the threshold of paying PAYE.Comment
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In terms of the Act all members/Directors are deemed to be employees.
In terms of the registration requirements, a registration for PAYE is only done where there is a liability or an anticipated liability for PAYE/SDL in the next 12 months.
An employer should only be registered for UIF with SARS if he is registered for PAYE and/or SDL with SARS.
Should an employer be registered with SARS only for UIF, and there is no prospect of becoming liable for PAYE and/or SDL payments in the near future, the employer should register with the UIF Commissioner instead and deregister with SARS.Comment
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Regarding an ITR12 you will have to submit an ITR12 irrespective of the income received for the year. (The R120 000 rule is not deemed to apply in this case)Comment
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If he/she is tax registered and is due to submit a return to SARS and does not they may incur Admin Penalties of R250 per month per year of non compliance. In such circumstances I would advise to ascertain whether the taxpayer is tax registered are whether a return a due. A nil return will then need to be submitted.Comment
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In this particular case, there are two directors who are mainly employed elsewhere and submit their tax returns. The company for which they are directors does not pay them any fees (yet) and has no employees, so it hasn't registered for UIF, PAYE, COID, etc - which would be nil returns anyway.Comment
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The issue of whether they will have to submit tax returns is solved then as all their income is consolidated at year end. So they will have to submit a return on all their income, which in this case would not include any income from the cc as none was earned. The Company would then only need to render its annual IT14.Comment
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forgive me but im going to go slightly off topic here:
i have a CC of which i am 100% owner/partner
its just over 2 yrs old.
what i wish to do is transfer it onto my sisters name as she & her husband want to open a small business
i registered thecc witht he intention to do contracting for the Ethekwini municipality but things did not work out
i keep on getting letters from SARS though, every few months, which shows an increasing amount that im owing them for failing to submit returns etc
i went once to their offices in Mt Edgecombe & explained that the company is dormant and has not been trading
i thought things were sorted out but these notices keep on coming
and i really do want to transfer it onto my sisters name
whats the quickest/cheapest/easiet way out?A “conspiracy theory” no longer means an event explained by a conspiracy. Instead, it now means any explanation, or even a fact, that is out of step with the government’s explanation and that of its media pimps.Comment
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With regards to the original question:
It is accurate that members and directors are also employees and their remuneration, since 2002 if I remember correctly, is subject to PAYE. Whether or not the R30,000 is below or above the threshold would depend on the actual period it relates to. Be that as it may, although the CC might be in the clear, the income is aggregated with the officers' other income and may cause them some strife...
Directors and members are also automatically provisional taxpayers. If the income was excluded from their 2012-02 IRP6, they have the opportunity to correct it with a top-up payment 31/08/2012.
If the cc was registered for PAYE and the PAYE was not deducted, it could have used the appropriate income source code on an IT3 which basically is used for "Director's remuneration taxed next year" . I can't remember the code off hand, but it exists. This is especially useful when profits are distributed as salary some months after February and which of course has not been taxed.
The second question, by msmoorad:
The short and only answer is submit the IT14 returns asap. Even dormant companies are required to submit returns.Comment
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