ETI

[Christel]

Hi there,
Kindly let me know of my way of thinking is correct w.r.t. ETI: A client has never qualify to claim ETI as his tax returns was behind. He is now up to date and want to start claiming the ETI till December when it falls away. My reaction would be that he can, but I need to take into account what "month" the employees would be in by now, i.e. if they started working for him in say December 2015, then I can still claim the 1st years ETI, but if they started in Jan 2014, then currently they would be past 24 months, so no incentive claimable.... Is this correct?

[Dave A]

The flip side is they were employed after the effective commencement date.
Your first year of claims is at the higher rate, and the second year of claims is at the 50% rate, based on when you started claiming (as opposed to when employment commenced).

Here's another thought -

Where the employer was not in good standing with SARS, my understanding is that you could make the ETI claim; you simply couldn't receive it / deduct it from PAYE contributions until the employer's tax affairs were back in order.

[dellatjie]

The only thing that I am concerned about here, are the balances that should have been carried forward, as they close the balance off at the end of February every year, and you start from R0 in March...

[Dave A]

I've been led such a dance by SARS in trying to get paid out an ETI claim from January 2015, I've come to the conclusion that SARS is still struggling to wrap their heads around anything off the beaten track when it comes to ETI.

Perhaps it's best you get guidance on this direct from SARS. At least when they change their mind later you'll be able to point out that they're the ones that led you astray in the first place.

[Christel]

@Dellatjie, that's correct, you can only carry a balance forward for 6 months, after that you have to start at 0 again.

Regarding my question.. .I have emailed it to the SAIT and got the following response:

This is dealt with in section 9(3) of the Employment TaxIncentive Act, 2013. We copied it for your convenience below:

If, by virtue of section 8, an employer may not reduceemployees’ tax in the amount of the employment tax incentive available to thatemployer, the sum of the amounts by which the employer would have been entitledto reduce employees’ tax payable by that employer if the employer had not beensubject to section 8 must be treated as an excess contemplated in subsection(1) in the first month that the employer is not subject to section 8.