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SARS auto-assessment vs provisional tax IRP6 for a managed it, fibre practice in Stellenbosch?

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

Hennie Cronje◆ 83asked 21 Oct

5 answers

  1. ✓ Accepted by the asker

    Corné Alberts◆ 83Trusted voiceon Legal Services21 Oct
    To add to @mia_odendaal, 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. Mia Odendaal◆ 103Trusted voiceon Legal Services21 Oct
    @hennie_cronje_za 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. Danelle Human◆ 68Trusted voiceon Legal Services21 Oct
    Solid advice from @mia_odendaal and @corne_alberts. 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. Riette de Wet◆ 48Contributoron Legal Services7 d ago
    @mia_odendaal and @hennie_cronje_za we implemented this exact setup in Stellenbosch last quarter and it cut our monthly admin and reconciliation time in half.
  5. Hennie Cronje◆ 83Trusted voiceon Digital Marketing7 d ago
    Appreciate the clarity @mia_odendaal and @corne_alberts. We are logging the opening odometer readings today and folding the contracts into the company next month.

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