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When last did you get a forecast on your turnover? Here's why you need to do this now!

by , 27 June 2016
When last did you get a forecast on your turnover? Here's why you need to do this now!Are you feeling the pinch? You're not alone. We all are. Costs just go up every month without money coming back in. Just looking around me I can see my friends and colleagues battling to make ends meet. And I see the same with the businesses in our office park. More and more doors are closing and everyone is complaining that turnover and profits are down.

That's why I'm writing to you today. I urge you to get a forecast of your turnover for the year.

If your turnover is less than R1 million every year or your business is starting to drop and you don't think you'll make R1 million this year, you should think about switching from normal company tax to turnover tax.
SARS introduced turnover tax years ago to help small businesses like yours. If you're not bringing in the same turnover as larger companies, then why should you have to pay the same taxes larger companies have to?
If you switch to the turnover tax system, you can reduce the amount of tax you have to pay SARS every year. In some cases you don't have to pay any tax at all.
So, if your business is feeling the pinch and you're starting to doubt whether or not you'll survive the rest of the year, why not take this quick test to see if you qualify for turnover tax.
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Who qualifies for turnover tax? Take this quick test to see if you do

If you're an individual, partnership, Close Corporation (CC), company or co-operative, you can take this quick quiz to see if you qualify for turnover tax.
Most of the questions apply to everyone but there are some questions that are specific to individuals and partnerships and others that are specific to CCs, companies and co-operatives.
Take your quiz now…
1.         Will your turnover be R1 million or less for the year of assessment?
2.         Is your business registered for VAT? If it is, are you're willing to deregister it for VAT?
3.         Does your financial year end fall on the last day of February?
4.         Can you confirm you haven't been registered for turnover tax in the last three years of assessment?
5.         If you earn income from 'professional services', can you confirm it's not more than 20% of the total income for the year? Examples of professional services are tax consulting, bookkeeping, auditing, etc.
6.         If your business disposes of assets, can you confirm the total income from this disposal (over the last three tax years) is less than R1.5 million?
7.         Do you agree that your business isn't a public benefit organisation (PBO) or a recreational club?
8.         For individuals and partnerships, do you declare the business isn't a labour broker without a SARS exemption certificate?
9.         For CCs, companies and co-operatives, do you declare the business isn't a personal service provider?
10.     If the business is a partnership, are all the partners individuals throughout the year of assessment?
11.     If the business is a CC, company or co-operative, do you declare all shareholders or members will be individuals throughout the year of assessment?
12.     Can you confirm that the owner, any partner, shareholder or member of the business doesn't hold shares or interests in a close corporation, co-operative or company (if your business is one of these three, they can't hold shares in another CC, company or close corporation) other than the following exceptions?
·      In listed South African companies;
·      In collective investment schemes;
·      In body corporates and share block companies;
·      In venture capital companies;
·      Of less than 5% in social or consumer cooperatives;
·      Of less than 5% in cooperative burial societies or primary savings co-operative banks;
·      In friendly societies;
·      In a company that didn't trade during any year of assessment and which didn't own assets with a total market value that exceeds R5 000 during any year of assessment;
·      In any company that has taken steps to liquidate, wind up or deregister.
Did you answer yes or no? Let's see what your answers mean…
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So how did you do?

If you answered no to any of the questions, sadly your business won't qualify for turnover tax. Even if your turnover is less than R1 million per year.
But if you answered yes to all of them, you'll qualify for turnover tax. And once you've had a look at your forecast and see your turnover won't be more than R1 million, then you need to make the switch today.
To find out:

·         How to apply for turnover tax in 14 easy steps;
·         The six steps you must take to complete your turnover tax return;
·         The only three times you'll ever pay turnover tax; and
·         How to pay turnover tax
Get your copy of the Practical Tax Loose Leaf now.
P.S. To learn more information on turnover tax, such as how to pay turnover tax, as well as how to fill out the TT02 form using the SARS tax tables, simply page over to Chapter T 16: Turnover Tax in your Practical Tax Loose Leaf Service handbook.

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