September 2016


It seems that every month we have something negative to report regarding the possibility of the country's sovereign credit rating being downgraded to junk. The latest bad news that will less than impress the credit bureaus is the student unrest and in particular the destruction of the amenities at our institutes of higher learning. On top of that, the people responsible are among those who are tomorrow's leaders and, presumably, some of the best brains in our country


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

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

Users of Excel may experience a degree of frustration at their ability to see all or most of the worksheets in the tab above the Status Bar. This is caused by the space used by the horizontal scroll bar. The problem may be resolved by changing the size of the horizontal scroll bar. To do this, place the cursor over the two vertical lines to the left of the horizontal scroll bar’s left arrow. Two vertical lines with an arrow on the left and right of the vertical lines will appear. Click and hold down the mouse button whilst moving the mouse in the desired direction to either increase (left) or decrease (right) the horizontal scroll bar.



Business Structures

There are a number of legal structures available to an individual contemplating going into business. Each has its unique advantages and disadvantages. The following is brief overview of these structures:

Sole proprietorship

This relates to a business that is owned and operated by one individual in his/her personal capacity. It is the riskier type of entity in that, in the event that the business is unable to meet its debts, creditors are able to attach the personal assets of the owner. In addition, there can be no continuity. In other words, when the owner dies so does the business. It cannot be bequeathed in a will. The assets of business will have to be sold by the executor; either piecemeal or as an entirety.


Membership is limited to twenty and the partnership will dissolve upon the death or insolvency of one of them. As with the sole proprietorship, a partner’s personal assets may be attached upon the insolvency of the partnership. The partners are jointly and severally liable for the partnership’s debts. This means that a creditor may seek to recover outstanding amounts from any or all of the partners collectively.

Private Companies

There is no maximum number of people who can be shareholders in a private company. As a company is a legal entity, it is taxed in its own name and in accordance with different rates and conditions to an individual. It will continue to exist after the death of one or all of its shareholders. Further, bequeathing shares can ensure continued family participation. This entity offers a far more flexible tax regime than that available to individuals. The disparity between tax rates applicable to individuals and companies may be used to structure financial matters in a way that minimizes the exposure to taxation.

Business Trusts

The assets of a business trust vests in the trustees in their fiduciary capacity. Tax rates applicable to trust are those in the top bracket for individuals. Due to the ongoing review of the taxation and use of trusts by the Davis Committee, it is difficult to predict how financial matters may be structured through trusts to minimize exposure to capital gains tax donations tax, income tax and estate duty. In addition, most of the law relating to these entities is to be found in court judgments and not in legislation.

Labour matters

An issue that may regularly tax an employer when considering the appropriate action to take against an employee is whether the employee’s transgression occurred as a result of incapacity or misconduct. Dismissal resulting from a misdiagnosis of the cause of the transgression may lead to dire consequences including re-instatement and/or damages.

The Labour Relations Act (LRA) states that valid reasons for dismissal are those connected to:

·         The employee’s conduct

·         His/her capacity

·         The employer’s operational requirement. These are not due to any act or omission on the part of the employee but to the needs of the business.

Schedule 9 of the LRA provides guidelines to be followed before dismissing an employee for misconduct, ill health, poor performance and incompatibility.

Therefore, it is important to distinguish between incapacity and misconduct. Misconduct will arise where the employee is able to comply with an employer’s rule but does not do so and is thus at fault. Intent or neglect must be present in the failure to comply. Examples of misconduct are:

·          Theft

·          Refusal to obey a reasonable instruction

·          Assault

These are classified as intentional misconduct and would justify dismissal. Unintentional misconduct usually arises as a result of failing to take reasonable precautions, forgetfulness or carelessness.

On the other hand, incapacity arises where the employee is willing to follow the instructions given but is unable to do so because of lack of skill, training or ability.

It can be seen that distinguishing between incapacity or misconduct can be onerous. Therefore, it is advisable to carry out an extensive review of the circumstances of a case before disciplinary action is taken.


It is interesting to read the diverse opinions of some economic commentators. Whilst one major assurance house spokesman stated that the municipal election results would have little, if any, impact on investors another commentator was of the opinion that the results could well influence Luthuli House to rethink its economic policies thereby influencing future decisions by investors. There has been no signs of the latter happening unless the pegging of tuition fee increases to 8% is seen as a shift in economic policy.

However, the country's sovereign debt rating which affects all borrowers may well be impacted negatively by recent events.  Certainly, the destruction and mayhem at our tertiary institutions can only serve to add to the negative impression of our country's political leaders and their leadership abilities.

Financing of the repairs and replacement will have to be obtained from somewhere and at a price. That price will be dictated by interest rates and those will be influenced by the country's credit rating. A downgrade may even make it nigh impossible to obtain these loans without the lender exacting absorbent terms.

In turn, that scenario will hamper further necessary development of our country's infrastructure and the government's ability to meet its objectives particularly the upliftment of the under-privileged majority. Hopefully, that will not lead to further insurrection.

Therefore, the funds must be found from somewhere and it is becoming increasingly likely that they will be sourced through the tax system. It is for this reason that we anxiously await the Medium Term Budget speech toward the end of October.


“A fool and his money are soon elected.  - Will Rogers