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June 2016

INTRODUCTION

Some years back, during Britain's relative early membership of the EU, many major British manufacturers deserted Britain in favour of the EU.The resulting job loss in the UK was enormous. One wonders whether a sudden burst of patriotism will persuade them to return or whether the EU without Britain will be a less attractive venue. This just goes to show how political changes affect economic decision making. Hopefully, South Africa is not populated by such treacherous industrialists and that a much needed boost to political stability will regain their goodwill.

DEADLINES

Annual Duty – one calendar month to the day after the incorporation date

Promotion of Access to Information Act manual – 31 December 2021 extended yet again!

Special Voluntary Disclosure Programme – 1 October 2016 to 31 March 2017

2016 Tax returns

Manual and postal submissions – 23 September 2016

Submissions by non-provisional taxpayers at a SARS office – 25 November 2016

Efiling by non-provisional taxpayers – 25 November 2016

Provisional taxpayers by Efiling – 31 January 2017

Tax returns

Tax clients should note that unless we receive all the relevant data and documentation at least fourteen days before the applicable submission deadline we cannot be held responsible for any punitive action taken against them by SARS.

Excel Tips

Supposing that you have a spreadsheet that contains constants and formulas but at the beginning of a new month you need to remove the constants in order to use the sheet for new data without disrupting any formulas. The best way to do this is to use the Go To Special command as follows:

1.        Select the range that contains both formulas and constants

2.         Press F5 to open the Go To box

3.        Select Special

4.        Tick the constants box and click OK

5.        Type 0 and press Ctrl and Enter

All cells that contained constants will be reset to zero

TAXATION

Filing Season 2016

The 2016 tax returns are now available on Efiling. Given the deadlines set out above, early submission to us of the following will avoid the imposition of late rendition penalties:

·         IRP5/IT3(a) certificate(s) from your employer or pension fund.

·         IT3(b) certificate for investment returns. By now most finance houses should have issued these.

·         Financial statements in respect of business income. Separate disclosure of rental income and related expenditure is require. Kindly refer to our April 2016 issue.

·         Medical Aid contribution certificates and receipts

·         Certificate in respect of local interest income earned. This appears to be a repeat of the IT3(b) item above. What is omitted is an IT3(c) in respect of any capital gain. This usually applies to the sale of shares either via your stockbroker or unit trust manager.

·         Retirement annuity fund certificates relating to premiums paid.

·         Logbooks and other documents in support of business travel expenses. The SARS website provides a specimen log book. Any logbook that is submitted should comply with that content.

·         Completed confirmation of diagnosis of disability form (ITR-DD), if applicable

·         Any other relevant income and deduction information

·         Bank account details

Once we have completed your return but prior to lodging it with SARS, we will send a copy thereof to you. The purpose of that is to enable you to verify all information thereon. Of prime importance is the verification of the personal information, particularly, of bank details. The information on any tax certificate should be checked very carefully as any inaccuracies will have to be rectified by your employer before the return is submitted.

BUSINESS

Credit Checks

It is not uncommon to hear of credit applications being rejected because of erroneous listing on a credit bureau for non-payment of an account. A recent issue of a business magazine highlighted, the case of a bond application being turned down by four banks including the applicant's bank. He had dealt with his bank for sixteen years. The applicant was confident that he had an unblemished credit record. However, in the previous year, he had cancelled a cell phone contract but the service provider had continued to send accounts. When, after telephonic approaches and two emails to the service provider's customer care department, the bills stopped coming the user assumed that the matter had been  resolved. However, it had been handed over to the service provider's legal department who listed the debt with a credit bureau without notifying the customer. The listing only came to light a year later when the bond applications were rejected.

Similar cases were reported in respect of amounts that were short paid by medical aid schemes. Therefore, it is advisable to follow these steps on an annual basis:

·          Apply to either Transunion or Experia for a full credit report. You are entitled to a free report once a year.

·          If any adverse disputed listing is reflected, request the credit provider to investigate the matter in conjunction with the bureau. Any verbal request should be followed up immediately with a written confirmation.

·          Lodge  a dispute of the listing with the credit bureau. Their investigation is likely to take 21 business days.

·          If your approaches are unsuccessful, lodge a complaint with the credit ombud.

·          Reporting the matter to a consumer journalist may assist in speeding up matters.

Labour matters

The very basis of an employment relationship is the duty to act in good faith. According to a Supreme Court of Appeal (SCA) case, this duty is breached when an employee:

·          works against the employer’s interest

·          places him/herself in a position where his/her interest conflict with those of the employer

·          makes a secret profit at the expense of the employer

·          receives a bribe, commission or secret profit in the course of or because of his/her position with the employer.

This ruling has been used recently in a case where the employee participated in moonlighting activities.

The case involved an employee who trained the employer’s employees and, to equip him to do so, had qualified as an accredited assessor and moderator. The company had a rule against moonlighting which the employee contravened without even requesting permission to do so. He did this by presenting training to an external company. It was also alleged that he had been involved in dishonest and fraudulent activities thereby bring the employer company into disrepute. The CCMA Commissioner found that there was no consistent application of the moonlighting rule by the employer company and found against the employer and awarding damages.

However, on appeal, the Labour Court reversed the CCMA decision on the basis that the employee had not acted in good faith by acting dishonestly and in a manner that might bring the company into disrepute.

Legal opinion is that because of an employee’s duty to act in good faith, there is no need for the employers to introduce a rule to prohibit moonlighting without obtaining  written permission. However, the introduction of such of such a rule and the consistent application of it will serve to reinforce the employer’s protection in this regard.

ECONOMY

Political stability is one of the most important indicators when deciding upon a country's credit rating. Violent demonstrations go a long way to undermine that stability; so too does veiled censorship as practiced by the SABC. It seems that the ruling party can do little to control either. From an outsider's perspective, it may even appear that this approach is a deliberate attempt by JZ, by using his personal supporters to become a Zimbabwean style of dictator. This would certainly not encourage a favourable review of the countries credit status. As we approach the wage negotiation season, it is hoped that trade unions and organised business will not tacitly contribute to demonstrations and to the unemployment statistics. Higher cost of living may also lead to a brain drain and associated capital flight.

The only plus factor is that most countries are experiencing similar or worse economic woes.

However, it seems unlikely that the SA Reserve Bank will be able to avoid raising the repo rate before the end of the year. It remains to be seen what its Monetary Policy decides this week. The announcement is due on Thursday afternoon.

TAILPIECE

How can a world be good in which Money is the moving power, and Self-interest the guiding star?  H. Rider Haggard