Page 2 of 3 FirstFirst 123 LastLast
Results 11 to 20 of 28

Thread: PAYE for businesses

  1. #11
    just me duncan drennan's Avatar
    Join Date
    Jun 2006
    Location
    Cape Town
    Posts
    2,642
    Thanks
    119
    Thanked 94 Times in 77 Posts
    Quote Originally Posted by Dave A View Post
    Yvonne, you're right - but
    Dave, you lost me there. Could you explain your thinking slowly so that I can understand your point?
    [SIGPIC]Engineer Simplicity[/SIGPIC]
    Turn ideas into products | The Art of Engineering blog

  2. #12
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    22,649
    Thanks
    3,305
    Thanked 2,676 Times in 2,257 Posts
    Blog Entries
    12
    Quite often there are different ways to overcome a challenge.

    Basicly Yvonne's strategy is standing on principle. Nothing wrong with it if you don't mind confrontation. But opening the door to bigger problems can sometimes be more effective in getting the result you want. You can't go to jail for debt, but you can go to jail for fraud.

    Perhaps more relevant in this instance, Roelof has already challenged the validity of the deduction and effectively been told to sod off.
    Last edited by Dave A; 26-Mar-09 at 07:15 AM.

  3. Thanks given for this post:

    duncan drennan (25-Mar-09)

  4. #13
    just me duncan drennan's Avatar
    Join Date
    Jun 2006
    Location
    Cape Town
    Posts
    2,642
    Thanks
    119
    Thanked 94 Times in 77 Posts
    Got it, thanks. Nice strategy (now that I understand).
    [SIGPIC]Engineer Simplicity[/SIGPIC]
    Turn ideas into products | The Art of Engineering blog

  5. #14
    Silver Member
    Join Date
    May 2006
    Location
    Houston
    Posts
    361
    Thanks
    51
    Thanked 41 Times in 32 Posts
    Last nights program discussion was about Directors Liability, and changes in the rights of Employees in the event of liquidations or retrenchments and did not refer to the threshold of turnover which requires a full "audit" - apologies.

    Although in my own opinion, the heavy emphasis on Directors and Senior Management liability is a form of forcing responsibility and liability for non disclosure, as they have done in the present situation where the auditor is "Required" by law to advise SARS of any irregularities.
    So if they do reduce the audit requirement, directors and management can be held liable if anything untoward comes to light, so a form a forced self governing.

    I had never heard of this program before, unfortunately being screened at 5.20 p.m. makes it difficult to get home in time to watch!

    Yvonne

  6. #15
    Silver Member
    Join Date
    May 2006
    Location
    Houston
    Posts
    361
    Thanks
    51
    Thanked 41 Times in 32 Posts
    Going back to our discussion, going the IRP5 route may "solve" your immediate problem, except you have "lost" 30% to your cash flow -and now the bookkeeping aspect is a total nightmare.

    The entire invoice would have to be credited, the person involved in the training would have to be "paid" by the client in his personal capacity, - no company invoice! and use the IRP5 to recover the SITE deduction again in his personal capacity.
    If you accepted their terms that he is an independent contractor - which he is clearly not!
    The criteria for independent contractor - is that the person is "supervised" in their duties and performance, with regular hours, and are payable at regular daily, weekly, monthly or other intervals.

    So going along with something that is clearly not correct, is merely exacerbating the incompetence in my opinion.
    Who is going to "teach" them to do it correctly (assuming innocence of any attempted fraud).

    There is no "facility" to recover SITE deducted from an invoice in any bookkeeping system, nor S.A.R.S. codes on your company annual return to S.A.R.S. for SITE paid to another company.

    It is simply not possible to accept incompetence or potential corruption, without causing administration problems for yourself.

    End result, client continues to be a problem, and you increase your own problems.

    Either way, you are going to "write-off" that 30% in my opinion.

    Yvonne

  7. #16
    Silver Member
    Join Date
    Jun 2008
    Location
    JHB
    Posts
    271
    Thanks
    73
    Thanked 76 Times in 56 Posts
    I have a sneaky suspicion that your client is defining you as a Personal Service Provider, in which case you are liable for PAYE, irrespective of the fact that you are trading as a CC. There are new regulations applicable from 1/3/2009.

    Before I go off on a tangent, perhaps you could check with your client if this is the case and then I can provide more detailed feedback.

  8. #17
    Platinum Member Chatmaster's Avatar
    Join Date
    Aug 2006
    Location
    Cape Town
    Posts
    1,065
    Thanks
    107
    Thanked 99 Times in 63 Posts
    Morticia, you've got me there. In terms of logical sense, how on earth can a CC or Pty pay PAYE? Please help me understand.

    I have finally spoken to the one company's financial manager which agreed that this was not supposed to happen and the problem is now solved with them. However, the other one is clearly still stuck to the idea of deducting PAYE. The irony is that this specific company I haven't done any work for personally but one of the trainers employed by company did work them. I am most frustrated.
    Roelof Vermeulen (Entrepreneurship in large organizations)
    Roelof Vermeulen| Rock flaps south africa

  9. #18
    Platinum Member Chatmaster's Avatar
    Join Date
    Aug 2006
    Location
    Cape Town
    Posts
    1,065
    Thanks
    107
    Thanked 99 Times in 63 Posts
    Quote Originally Posted by Yvonne View Post

    Either way, you are going to "write-off" that 30% in my opinion.

    Yvonne
    No way that will happen, they will pay that is a promise, I have yet to find someone that doesn't find me as very persuasive
    Roelof Vermeulen (Entrepreneurship in large organizations)
    Roelof Vermeulen| Rock flaps south africa

  10. #19
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    22,649
    Thanks
    3,305
    Thanked 2,676 Times in 2,257 Posts
    Blog Entries
    12
    You just attach the IRP5 to your tax return. Really messes up provisional tax calculations, though. And with that, cash flow.

    If these training companies are regularly outsourcing for trainers, you could easily find they've been slapped for not doing this deduction before. However, from a procedure point of view, they really should clearly establish the position of each trainer before they make the call to deduct PAYE.

    Whatever, the bottom line is if they deduct PAYE they have to issue an IRP5. And the PAYE paid over will be credited as part of the income tax paid by your CC. You'll get the change in a tax refund in due course.

  11. #20
    Silver Member
    Join Date
    Jun 2008
    Location
    JHB
    Posts
    271
    Thanks
    73
    Thanked 76 Times in 56 Posts
    A PSP (personal service provider) exists if:
    - service is provided by a company or a trust - NOT an individual
    - the service is provided via a person who is connected to the co/cc.
    - the psp does not have at least 3 full-time employees who are not shareholders, members, beneficiaries or connected persons.

    The requirement/possibility of a co/cc having PAYE deducted etc has been around for a number of years (cannot remember exact date..old age) and was specifically legislated to curb the abuse of taxpayers by resigning from their job, forming a co/cc, get re-employed by the same employer as "independent contractor" and claiming a myriad of fictitious expenses, avoiding monthly PAYE as employee, etc.

    Yes, you must insist on getting an IRP5 certificate if a supplier insisted on deducting PAYE and you will get credit for this on final assessment. You may also deduct any PAYE deductions when calculating a provisional tax payment.

Page 2 of 3 FirstFirst 123 LastLast

Similar Threads

  1. [Question] PAYE ON COMMISSION
    By vamily0804 in forum Tax Forum
    Replies: 3
    Last Post: 20-Mar-09, 08:21 AM
  2. [Question] PAYE payable on forgein commission?
    By West in forum Tax Forum
    Replies: 5
    Last Post: 27-Feb-09, 08:50 AM
  3. [Question] Payroll System
    By anakin in forum General Business Forum
    Replies: 7
    Last Post: 17-Jul-08, 04:42 PM
  4. independant contractors and PAYE/SITE
    By duncan drennan in forum Tax Forum
    Replies: 7
    Last Post: 12-Jun-08, 09:36 AM
  5. PAYE: some salary questions
    By duncan drennan in forum Tax Forum
    Replies: 5
    Last Post: 01-Dec-06, 10:17 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •