Small business turnover tax

[Dave A]

If you can get a saving, enjoy it while you can, I reckon.

Point is crossing the mark deserves some careful planning and I'm trying to think of the strategic decisions.

One is it is probably worth trying to hover under the R1 million mark for a while and build reserves for the transition.

Another is having a tidy little pile of stock and assets that you can claim input tax on upon VAT conversion, which might ease the pain a little

Certainly, if you don't go into it with a plan, there could be some fairly serious cash flow implications.

[Ladel]

If you can get a saving, enjoy it while you can, I reckon.

Lol true enough! And point taken, I guess best to advise clients who do consider Turnover Tax to always keep in mind that there'll be a huge increase in the tax bill when they do reach R1 mil.

Anyways it's been nice sharing some views, we'll chat again!

Ladel

[Dave A]

it's been nice sharing some views

Likewise

[southafricanrob]

Turnover Tax sounding good??

Thanks to all for the advice - seems for me like a good way to go at this stage just not a huge incentive to expand!!
Thanks,
Rob

[Ladel]

Hi, found this on the internet, haven't had time to look at it yet, but I thought I'd share, will look into it tonight!

[Dave A]

Sorry to say, but whomever put up that page is an idiot.

Yes, there are times when turnover tax is not a saving, but showing the members paying tax on salary and the cc paying turnover tax is doff. Just don't have the members draw their money as a salary! Take it as distributable profit instead, and then the numbers get a lot closer together.

[Ladel]

Wow, you're right! The author really does have a limited view... no offense intended. Better have a chat with the client that directed me to that article. Thanks again for your suggestion on my labour hirer

[southafricanrob]

Some more questions / answers re turnover tax

Hi,
I saw a tax accountant today re getting some answers re turnover tax. Still one unresolved issue - can anyone comment on the following question:

I qualify for TT with the exception that I am currently a member of a CC. If I close the cc before the deadline of 30 April will I then qualify or will I be disqualified because at the start of the tax year ie 1 Mar I had interests in the CC?

I would think I'd be ineligible although seems a bit unfair as TT only came into affect after the beginning of the Tax Yr.

Deadline drawing near so any feedback very welcome!
Thanks,

[Dave A]

Is the CC dormant or trading?

[southafricanrob]

It is trading has traded up until end feb but is not officially dormant yet. Thanks

[southafricanrob]

have found some info online that points towards disqualification "Any person who holds shares in another company for any period during the year." ...disappointing.

[Dave A]

If it ceased trading in Feb and this is just about dotting the i's and crossing the t's, I'd still take a shot just in case. SARS seems pretty keen on this turnover tax idea and might accept the explanation.

If you don't ask, you don't get. What have you got to lose?

[southafricanrob]

Sure good point. Just getting an answer from SARS has been tough. The consultants are not very knowledgeable re the TT in the Cape Town branch. Thanks for all the help though.

[gazza777]

Hi all

Can anyone recommend a tax consultant who is knowledgeable in Turnover Tax?

[Madeleine001]

Hi all, could someone please tell me if I can still register for Turnover Tax for the 2010/11 tax year? I know the deadline was May 2010 but I was claiming UIF until June 2010 after having been retrenched and had no idea that I would end up being self employed. (I am a graphic designer and started doing some private work while getting UIF to pay debt, rent etc. It really took off in June 2010 with a big job which enabled me to become debt free and purchase some equipment and from then things took off and I changed from unemployed to self employed). I don't know know much about tax and thought I'd only have to submit tax forms at the end of Feb 2012, so today I investigated my options and Turn Over tax is the best choice for me - but I'm no registered yet. And if I register now - will I be charged penalties in my situation?

Any reference to a good but not super expensive tax consultant / accountant person in Cape Town area?

Your advise would be appreciated!

Madeleine