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Do you make this common mistake when you pay your SDL?

by , 10 November 2016
Do you make this common mistake when you pay your SDL?There's one mistake that many employers continue to make when they pay their Skills Development Levy (SDL).

As you know, SDL is a company contribution you must pay every month. This levy funds education and training through the Sector Training and Education Authorities (SETAs).

It's important that you get the treatment of SDL right. If you get it wrong, you'll face interest and penalties on underpayment and you'll expose your business to a full employees' tax audit from SARS.

Don't take that risk!


Breaking news: There's a 33% chance SARS's assessment of your tax return is wrong!

And most mistakes made by SARS on assessments are to your detriment!

If you're self-employed or a small business owner, you need to be particularly careful!

Find out how you can protect yourself from SARS' errors.

Avoid this mistake when you pay your SDL

So what's the mistake? Forgetting to include your members and directors' remuneration when you pay your SDL.

The reason this mistake is common is because of the following:

The Practical Tax Handbook explains that when the SDL was first introduced, members of Close Corporations and directors of private companies were exempt from contributing to this levy.

But, the legislation changed a few years ago and the SDL now includes members and directors as employees.

Many employers are still not aware of the change and are still playing by the old rules.

Don't make the same mistake of excluding members and directors from the levy, they qualify and you must include them.


How to make yourself invisible to SARS

The key to reducing how much tax you pay is staying off SARS' radar.

SARS has conducted R1.8 million audits. They've added 100s of new tax collectors and auditors to their payroll and each one has his own collection targets to meet.

This means two things:
  1. If you're not compliant, your chances of an audit this year have just doubled, and
  2. You will pay more in penalties.
But here's how you can make yourself invisible to SARS...

Your one important SDL tip

The Practical Tax Handbook explains that you can only exclude deemed remuneration from the leviable amount, which is determined in accordance with Section 11C of the Fourth Schedule to the Income Tax Act. Actual remuneration paid or payable to a director must still fall under SDL.

Remember that getting the treatment of SDL wrong carries harsh penalties and interest.

So don't make the mistake of excluding your members and directors' remuneration when you pay your SDL.

P.S. This is just one of the ways you can avoid attention from SARS. There Practical Tax Handbook reveals six others. Click here to find out what they are


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