SARS auto-assessment vs provisional tax IRP6 for a digital marketing practice in Stellenbosch?
One of our partners in Stellenbosch still earns a salary while also billing digital marketing projects before we fold everything into the new company. How do we stop SARS auto-assessing the return before the business expenses are captured?
◆ 83asked 22 SeptShown to 9 businesses that do this work5 answers
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22 SeptTo add to @tygerbergtax, 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.
22 Sept@mogamat_jacobs 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.
22 SeptSolid advice from @tygerbergtax and @midranditpro. 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.
22 Sept@tygerbergtax and @mogamat_jacobs we implemented this exact setup in Stellenbosch last quarter and it cut our monthly admin and reconciliation time in half.- 22 SeptAppreciate the clarity @tygerbergtax and @midranditpro. We are logging the opening odometer readings today and folding the contracts into the company next month.
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