Statutory Business Requirements
Statutory Registrations are a very important part of running a business legally in South Africa and must be adhered to. By Thys Buitendag CA (SA).
Below is a list of registrations that need to be completed at each stage of your business cycle.
- Income Tax. All businesses need to register with the South African Revenue Services (SARS) for Income Tax. In the past this registration was done automatically when you registered your business with the Companies and Intellectual Property Commission (CIPC), however this is no longer the case; therefore you now have to visit your nearest SARS office and complete an IT77C, whereupon they will register your business for Income Tax. It is important to note that it’s not just your business entity that needs to be registered for Income Tax; ALL entrepreneurs also need to register for Income Tax and as a Provisional Tax Payer.
The moment you decide to employ staff, you will need to complete the following registrations:
- Pay as you Earn (PAYE). All business entities (this includes Sole Proprietors) that employ staff who earn more than R70,700 per year are required to register for PAYE with SARS. Tax is deducted from the employee salary and paid over to SARS (together with UIF & SDL) on a monthly basis.
- Skills Development Levy (SDL). All business entities (this includes Sole Proprietors) with a payroll that exceeds R500,000 per annum are required to register for SDL. There is no separate form for this registration and if it is not done when you register for PAYE, you can ask SARS to activate it when you see that you will exceed the R500,000 per annum payroll threshold.
- Unemployment Insurance Fund (UIF). All business entities (including Sole Proprietors) that employ staff who work more than twenty one (21) hours per month (the R70,700 level does not apply) are required to register with the Department of Labour as an Employer. Once you are registered, you will need to submit a UI-19 form to the Department of Labour, whereupon you will list your employees and what they earn. You can register and file returns via the website at www.labour.gov.za
- Compensation Commissioner (Workman’s Compensation). All business entities (this includes Sole Proprietors) who employ staff, as above, need to register with the Compensation Commissioner. Workman’s Compensation is essentially a form of insurance that covers you and your employees from any workplace accident. You can register and file returns via the website www.labour.gov.za
- Value Added Tax (VAT). Unless your business is turning over more than R1 million per annum (R83,333 per month) there is no need to register. Business entities (including Sole Proprietors) can voluntarily register for VAT if their Turnover is below R1 million but above R50,000. (As from 1 April 2014 a business whose taxable supplies have exceeded R1m in the preceding twelve months must register for VAT).
- CIPC. Every company and cc must file an annual return with the CIPC to keep the registration active.
Deadlines coming up:
- SARS EMP501 reconciliation (PAYE,UIF,SDL) due by 30 May 2014.
- Compensation Commissioner Return of Earnings due 31 May.
About the Author: Thys Buitendag is the principle value contributor at SYNC Accounting & Business Services. He qualified as a Chartered Accountant after studies at the University of the Free State. He has over 25 years of experience ranging from being an auditor for a few years to being part of the senior management of large corporations and operating his own business, mostly in the manufacturing (feed, FMCG, agriculture related) and IT industries, driving efficiencies in production, logistics, treasury, administration, finance and sales.
For advice or assistance telephone +27 (0)11 475 8422 or for more information visit: www.synbs.co.za. You can also send an mail to [email protected].