'Tax is a fact of life that entrepreneurs have to come to grips with. Failing to adhere to the law, or avoiding what is required by SARS, can have far-reaching implications for a small business, Leigh Livanos, head of start-up business at Standard Bank told iafrica earlier today.
But why is it such an issue?
Well, from your personal tax… To the tax your employees have to pay SARS… To the tax you pay on purchases… And vat you charge on sales… Tax affects every part of your business.
Get it right, and it could result in a nice company rebate… Get it wrong, and it could shut your business down.
Here are some tax tips you need to know about:
Tax tip #1: Claim start-up costs
SARS knows it costs money to start your business. That's why it gives you the chance to claim back some of your start-up costs, reveals 30 Business Boosting Tax Breaks.
So the first thing you need to do is ask your tax consultant if he's included your start-up costs in his tax calculations.
Tax tip #2: Know how provisional tax works
As soon as you start your business you become a provisional taxpayer. And that means you need to register with SARS office within 30 days of your business's birth. CCs and companies are automatically registered as provisional taxpayers, explains entrepreneurmag.com.
As a provisional tax payer, you'll pay tax in two instalments that SARS will set out for you. Make sure you know what they are so you don't miss them.
Tax tip #3: Check if your company qualifies for a small business allowance
Section 12E of the Tax Act revolves around small business allowances. With this allowance, you could qualify for a 100% deduction of the cost of manufacturing an asset. You'll also be qualify for the three year 50/30/20 deduction on non-manufacturing assets.
But before you claim, make sure your business qualifies for this deduction.
Bottom line: Wrapping your head around tax requirements can be tough. But, for the survival of your business, it's crucial you do it.