Dear fellow taxpayer,

Two tax tips dropped in my lap this week and I’m so keen to share them with you, I’m including both in this week’s Tax Brief.

1. Provisions for micro-businesses still apply

There’s been a lot of (understandable) excitement around the newly introduced micro-business regime and its turnover tax system.

I was asked an interesting question recently...

Is there a new simple tax dispensation for payroll taxes like employees’ tax (SITE and PAYE), Unemployment insurance Fund (UIF) contributions, and the new Skills Development Levy (SDL) to complement the new system?

Unfortunately, the answer’s no. This means as long as your micro-business has employees, the current provisions will still apply. This is because there aren’t direct charges on your business, but are payments you make for and on behalf of your employees.

The converse is also true

If your business has employees who aren’t liable for employees’ tax, SARS now won’t require them to register for employees’ tax. Also, if your business has a payroll of up to R500 000, it’s also not liable for the SDL.

2. No estate duty on your lump sum benefits

If you’re in the unfortunate situation where your family’s primary income provider passes away, you will most likely rely on a pension benefit to address the potential problems you and any dependent children may have.

However, the value of the benefit will depend on the form your savings take. For instance, pension funds provide exempt annuities, but lump sums are potentially taxable.

SARS wants to help you...

Our government doesn’t want to penalise you, as a beneficiary. So, with effect from 1 January this year, any lump sum benefit from a retirement fund (pension fund, pension preservation fund, provident fund, provident preservation fund and retirement annuity fund) is exempt from Estate Duty. 

Hope these help. See you on the 16th,

Jackie Arendse