Business.co.za
SolvedTax ServicesStellenbosch

SARS auto-assessment vs provisional tax IRP6 for a coffee roaster, hospitality practice in Stellenbosch?

One of our partners in Stellenbosch still earns a salary while also billing coffee roaster, hospitality projects before we fold everything into the new company. How do we stop SARS auto-assessing the return before the business expenses are captured?

Amy Wu-Kirsten◆ 83asked 23 Sept

5 answers

  1. ✓ Accepted by the asker

    Gerhard Meyer◆ 83Trusted voiceon Tax Services23 Sept
    To add to @cobus_potgieter, make sure you keep a proper SARS-compliant logbook if any vehicle travel is claimed against that consulting income. Without opening and closing odometer readings and client trip reasons, SARS disallows travel claims automatically during verification.
  2. Cobus Potgieter◆ 120Trusted voiceon Bookkeeping Services23 Sept
    @amy_wu_kirsten as soon as someone earns trade income outside of IRP5 remuneration, they qualify as a provisional taxpayer and should register for IRP6 on eFiling. Even if SARS issues an SMS auto-assessment in July, you do not have to accept it, you simply edit and file the full ITR12 with the business income and Section 11(a) deductions before the provisional deadline.
  3. Heinrich Kruger◆ 68Trusted voiceon Tax Services23 Sept
    Solid advice from @cobus_potgieter and @gerhard_meyer. Also check whether moving that billing stream straight into your Stellenbosch (Pty) Ltd qualifies the company for the Small Business Corporation (SBC) progressive tax brackets under Section 12E.
  4. Danie du Toit◆ 48Contributoron Tax Services24 Sept
    @cobus_potgieter and @amy_wu_kirsten we implemented this exact setup in Stellenbosch last quarter and it cut our monthly admin and reconciliation time in half.
  5. Amy Wu-Kirsten◆ 83Trusted voiceon Consulting24 Sept
    Appreciate the clarity @cobus_potgieter and @gerhard_meyer. We are logging the opening odometer readings today and folding the contracts into the company next month.

Your answer