SMME Tax Relief measures for 2021

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Background to the emergency tax relief measures

On 25 July 2021, President Ramaphosa announced emergency tax measures. This was in response to the continuing COVID-19 pandemic and recent unrest in the country that resulted in the destruction of businesses. Further details of the proposed measures were provided by the Minister of Finance and National Treasury on 28 July 2021. This is an overview of the relief measures applicable to Small, Micro, and Medium Enterprise (SMMEs).

Do you qualify for the emergency tax measures?

In order to qualify for the emergency tax measures, you must be tax compliant, which means that you:

  • Are registered for all required taxes
  • Have no outstanding returns for any taxes you are registered for
  • Have no outstanding debt for any taxes you are registered for, excluding:
    • Instalment payment arrangements
    • Compromise of tax debt
    • Payment of tax, pending objection or appeal.

You can view your tax compliance status via eFiling under your “My Compliance Profile”, or request your latest Statement of Account for the taxes you are registered for.

What are the tax relief measures?

The announced measures are:

  • The introduction of a tax subsidy of up to R750 per month for the next four months for private sector employers who have employees earning below R6500. This subsidy will be provided under the current Employment Tax Incentive.
  • Tax compliant businesses with a gross income of up to R100 million will be allowed to delay 35% of their Pay-As-You-Earn (PAYE) liabilities over the next three months, without penalties or interest.
  • Tax compliant businesses in the alcohol sector can apply to the SARS for deferrals of up to three months for excise duty payments. Please note that this can only be done after the circumstances are set out to justify the deferral.

What is the period for the relief?

Below are the different periods for the three types of relief:

  • Employment Tax Incentive (ETI)
  • PAYE Deferrals
  • Pause on Excise payments for alcohol

Employment Tax Incentive (ETI) tax relief period

Tax relief under the ETI is available for a four-month period from 1 August 2021 to 30 November 2021. The first extended ETI can be claimed in your August EMP201. Please remember that this is due by 07 September 2021. The maximum monthly amount that will be permissible under the ETI during this period will be increased according to the following criteria:

  • For employees who are eligible under the current ETI Act, the amount increases from R1 000 to R1 750 per month in the first qualifying 12 months, and from R500 to R1 250 per month in the second 12 qualifying months.
  • A monthly ETI claim of R750 will be allowed for employees who are between 18 and 29 years old, and are no longer eligible for the ETI due to the employer having claimed it for them for 24 months, or who were in the employer’s employ before 1 October 2013.
  • A monthly ETI claim of R750 will be allowed for employees who are between 30 and 65 years old, and are no longer eligible for the ETI due to their age.

SARS will also pay monthly ETI refunds for the four-month period, instead of every six  months as is normally the case.

To claim tax relief under the ETI:

  • Capture the full PAYE Liability (The form will calculate the PAYE payable at 100%, you cannot change this value)
  • Capture the ETI Calculated
  • Calculate 65% of the PAYE Liability in terms of the tax relief for PAYE for the first three months
  • Limit the ETI Utilised to the lesser of ETI Calculated or 65% of the PAYE Liability for the first three (3) months or 100% of the PAYE liability in the 4th month
  • Calculate the Total Payable as (65% of the PAYE Liability for the first three months, or 100% plus the first payment of the deferred amount in the 4th month less ETI utilised plus SDL Payable plus UIF Payable.

Note:

  • If your payment is made late, you will forfeit the benefit of the emergency tax relief for PAYE and SARS will impose penalties and interest on the calculated Total Payable
  • Check your Statement of Account after 48 hours of submitting the EMP201 to make sure that SARS has not revoked the discount due to non-compliance.

PAYE tax relief period

The tax relief for PAYE is available to qualifying businesses for the three month period from 1 August 2021 to 31 October 2021. The first deferment can be claimed in your August 2021 EMP201 return, which is due by 07 September 2021.

To claim tax relief for PAYE:

  • Complete the EMP201 as per normal with the full PAYE Liability (the form will calculate the PAYE payable at 100%, you cannot change this value)
  • Calculate the Total Payable as 65% of the PAYE Liability plus SDL Payable plus UIF Payable.

Note:

  • SARS will issue a Statement of Account, reflecting the tax relief (deferred amount) for PAYE and the total amount payable for that respective period
  • If your payment is made late, you will forfeit the benefit of the tax relief for PAYE and SARS will impose penalties and interest on the calculated Total Payable.

PAYE deferral months:

For period File in
August 2021 September 2021 * month 1 of relief
September 2021 October 2021 * month 2 of relief
October 2021 November 2021 * month 3 of relief

Payment of the deferred PAYE liability

After the 7th of November 2021, SARS will determine the four equal payments for the total amount that you have deferred and include it in your monthly Statement of Account. Payments will be made over a four month period that will commence on 07 December 2021 with the last payment due by 07 March 2022.

Alcohol industry: Payment Deferral of Excise Duty Payments on Alcohol

Due to the restrictions on the domestic sale of alcoholic beverages, tax compliant businesses in the alcohol sector can apply to SARS to obtain deferrals of up to three months for excise duty payments. Please note that this can only be done after the circumstances are set out to justify the deferral.

This is expected to help a significant number of businesses that are under pressure in terms of cash flow and their ability to honour payments to SARS.

The payment deferments will be in accordance with provisions of the Customs and Excise Act which allows excise traders to request for deferrals of duties as per conditions in section 105 of the Act.

How do I apply for the Excise deferral?

Applications can be sent to the following email address OSC@sars.gov.za.

NEF announces Fund to support black manufacturers : Black Business Manufacturing Fund

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As South Africa responds to President Cyril Ramaphosa’s recent call to “accelerate the implementation of our Economic Reconstruction and Recovery Plan to rebuild our economy”, the DTIC has allocated R150 million for the National Empowerment Fund (NEF) to establish the Black Business Manufacturing Fund (BBMF) to support black entrepreneurs in manufacturing various products locally across all key sectors of the economy.

 

Supporting the manufacturing value chain

Commenting on the Fund, Mr Nhlanhla Nyembe, the NEF’s Divisional Executive for SME & Rural Development, says: “This Fund is a strategic fit for the NEF and Government’s objective of increasing the country’s manufacturing capacity which is necessary to achieve inclusive economic growth. The Fund will support companies involved in the manufacturing value chain, focusing on value addition. These include processing of raw materials into inputs for finished goods, conversion of raw materials into finished goods and adding value into semi-finished and finished goods including processing products for consumption”.

 

The NEF is a Government-owned Development Financial Institution whose mandate is to promote and facilitate black economic participation through the provision of financial and non-financial support to black-owned and managed businesses.

 

He says over the years the NEF has supported black entrepreneurs to manufacture a range of products including cranes and aerial platforms, railway components, steel wheels and rims, car tracking devices, furniture, cotton fibre, textiles and clothing, sanitizers, medical masks and personal protective equipment, pesticides, condoms, mining components and roof tiles, among many others. “This is the track-record that we will build upon, along with the diverse range of internal investment and engineering expertise to help take this important task forward,” says Mr Nyembe.

 

Funding criteria

To qualify for BBMF funding, companies must be:

  • Majority owned by black people – minimum of 51% black ownership;
  • Registered and recognised under South African laws;
  • Registered either as a private company (Pty Ltd), close corporation or co-operative;
  • Registered for tax and in good standing with SARS, and have a valid tax clearance certificate;
  • Involved in the manufacturing value chain (including making and processing of goods with some sort of value add to products;
  • Create sustainable jobs;
  • Commercially viable, demonstrating their ability to repay the loan;
  • Looking for funding for the acquisition of plant, equipment and machinery; improvement and upgrading of manufacturing processes; raw materials working capital; costs associated with delivering under export contracts;
  • Looking for funding for the importation of plant and equipment (provided that the business can demonstrate that such plant and equipment cannot be sourced locally);
  • Looking for funding for the importation of raw materials provided such raw materials cannot be sourced locally.

 

Exclusions

The Fund will not support businesses that are involved in the following areas:

  • Trading of goods (buying and selling) without any value add;
  • Provision or creation of services;
  • Importation of finished goods, and
  • Manufacturing of tobacco products.

“The ultimate mission,” adds Mr Nyembe, “is to drive the manufacture of quality products at competitive prices for local and export markets while nurturing manufacturing businesses in the right direction with mentorship support where required”.

SASRIA Claims – Need to Know

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Sasria Claims

As you have seen in the media, several protest actions arose in KZN, Gauteng and some other areas.

Sasria SOC Ltd would like to give you the assurance that we are well capitalised with capital adequacy ratio of more than 3 (three) times, and in addition we have adequate reinsurance programmes We are confident that we will be able to provide for the anticipated claims.

The current situation necessitates that we communicate with you as our Agent Companies and Brokers, the claims process to ensure we are well positioned as partners to navigate these trying times.

We are ready to help you
1. Internally, we have created a CAT event code, and centralised all the claims that stem from the recent events to a specialist team of experts who will facilitate the claim handling.
2. We request that all claims stemming from these events are registered with the Agent company who will in turn register the claims with Sasria. This is as per our business model and ensures we are all able to manage the claims effectively and expediently. Please use the email addresses as provided below.
3. Please ensure that all relevant information for claims registration is provided at the point of registering the claim with Sasria (loss adjuster report, coupon, underlying policy, proof of premium payment).
4. We request that Loss Adjusters and Assessors be appointed within  the given mandates. For all claims above R1m, the confirmation of appointment of Loss Adjusters should be confirmed by contacting the claims contacts stated below.
5. We have also appointed Loss Adjusting companies to collate all information to expedite the claims.

To avoid unnecessary delays in managing the claims, it is important that the above process be followed and complied with.

We have also received several queries relating to underwriting. In the event that your client requires Sasria cover, please proceed and issue coupon following our underwriting regulations. Clients may request to initiate Sasria cover at any time or increase their insured limits as per the regulations. We will honour all new business requests, however, the client will need to declare no existing damage is in place at the time of issuing cover or increasing cover. Pre-existing damage is not covered. We urge all Agent Companies to review the regulations published on our website, www.sasria.co.za.

Again, we want to ensure you as our partners, that we are well geared to facilitate the claims that may arise, and we value your continued support.

Contact details
Claims:

New Claims: newclaims@sasria.co.za

Existing Claims: claims@sasria.co.za please use the CMS claim number from the original registration in the subject line to allow for auto allocation.

Payment: payments@sasria.co.za for invoices and signed releases /AOL’s. please use the CMS claim number from the original registration in the subject line to allow for auto allocation.

For Loss Adjuster mandates and other queries regarding this claims –                                                    nomfusig@sasria.co.za Nomfusi Gogoba
jackp@sasria.co.za Jack Poopedi
richardp@sasria.co.za – Richard Phakathi
Mmakgomom@sasria.co.za Mmakgomo Motalane (claims manager)

Underwriting queries:
Please refer all underwriting queries to underwriting@sasria.co.za.

Lastly, I would like to thank you for your continued support and cooperation. In these trying times, your assistance will aid us in delivering the acceptable service to our mutual clients.

Should you encounter any problems, please do not hesitate to contact me.
Fareedah Benjamin
Executive Manager: Insurance Operations

General query bank
1. What is Sasria?
Sasria is a Short-Term Insurance Company that provides coverage for damage to property caused by special risks such as politically motivated malicious acts, riots, strikes, terrorism and public disorders.

2. Who owns Sasria?
Sasria SOC Ltd is a public enterprise listed under Schedule 3B of the Public Finance Management Act No. 1 of 1999. Sasria is wholly owned by the State and reports directly to the National Treasury.

3. What does Sasria cover?
Sasria covers the following risks:
– Terrorism
– Public disorder
– Strikes (e.g. labour unrests, etc.)
– Riots
– Political (e.g. service delivery protests, etc.)
– Non-political (e.g. student riots, commuter agitation, etc.)

4. Is Sasria cover compulsory?
Sasria cover is not compulsory. The policyholder has an option not to purchase Sasria cover, provided that they understand what they are exposed to without Sasria cover.

5. How do I buy Sasria cover?
Sasria cover is bought through insurance companies (referred to as Agent companies) who are responsible for the administration of Sasria cover. Clients who have brokers can speak to their brokers to arrange Sasria cover for their assets, on their behalf.

6. Who qualifies to buy Sasria cover?
Sasria cover is available to individuals and businesses that have property situated within the borders of South Africa, as well as South African waters.

7. Does Sasria cover war?
No, war is an exclusion in terms of Sasria.

8. Does Sasria cover pandemics such as Covid 19?
No, Sasria does not cover pandemics or any financial loss as a result of a pandemic.

9. Am I covered by Sasria if I get injured in a strike or protest?
Sasria does not have a license to cover personal injuries or loss of life, therefore excluded.

10. Does Sasria cover natural disasters such as hail, floods, earthquakes?
No, natural disasters are excluded under the Sasria cover.

11. Who may issue Sasria cover?
Sasria Coupons and Policies may only be issued by Insurance Companies (referred to as Agent companies) who have received authority from Sasria and have signed outsourced and intermediary agreement.

12. Sasria cover attaches to the underlying policy, does this mean my property is covered for Sasria in the same territories as the underlying policy?
Sasria cover is restricted to property situated within South African borders and waters.

13. Does Sasria provided any liability cover?
No, Sasria does not cover liability.

14. As a government employee, is my property automatically covered for Sasria, since it is a State-owned Company (SOC)?
Sasria cover is not automatic to any client or government employees. Cover must be bought, by
way of premium through an underlying insurer.

15. Does Sasria have shareholders?
Sasria has a sole shareholder which is the South African government.

16. Does Sasria charge an excess at the time of loss?
Sasria does not charge an excess at claims stage except in a case of Contract works claims.

17. Does Sasria provide car hire?
Sasria does not offer car hire cover.

18. Does Sasria cover Looting or any riot that occurs during lockdown or due to COVID-19?
Sasria cover remains unchanged even during this period of lockdown. Clients who have Sasria cover on their policies will still enjoy the normal Sasria cover for Perils defined on the policy wording.

19. Sasria cover excludes theft. What happens if a riot breaks out and goods or stock are looted
during the riot?
Looting is not a stand-alone Sasria peril and will only be covered, if it occurs during an active Sasria peril for which Sasria accepts liability.

20. To avoid Looting, can the client appoint security guards if they have unrest in their area?
Security cost cover for imminent danger can only be activated if there is an active Sasria peril within a 10km radius of the insured premises.

21. Due to the lockdown, Liquor businesses are being burgled and alcohol is stolen from the premises due to the lockdown non-alcohol sale. Please advise if this will be covered under Sasria.
Sasria does not cover loss or damage due to burglaries or theft, this should be referred to the underlying insurance company on cover. If you have any other information that suggests this incident may be Sasria-related, please liaise with the insurance company and they will follow the normal claims process. Sasria will treat such claims like any other Sasria claims by looking at the circumstances and merits to decide whether the claim is valid.

22. Does Sasria cover my business for loss of income during this COVID-19 epidemic or
lockdown?
The general rule dictates that the Sasria Business Interruption (BI) cover must always follow the material damage of the property listed in the policy schedule. Secondly, our BI cover is a standalone cover and does not follow the underlying policy. In our view this BI following a nonmaterial damage in the case COVID-19 or lockdown cannot be a claim in terms of Sasria.

23. Is it a Sasria rule that the Insured must prove that material damage caused to insured property, is related to riots, strikes etc?
Should the insured suffer damage or loss that they suspect could be Sasria related, a claim should be submitted through the right channels, even when not sure Sasria would cover it. This will give Sasria an opportunity to investigate fully and be in a position to make a proper decision on liability.

24. How will Sasria ensure you remain financially sound to continue to pay claims even if there is large outbreak in claims over the next year?
Sasria has a strong balance sheet and is well capitalised backed by a strong reinsurance programme. Sasria has also embarked, as it would behove any business in these uncertain times, to construct a sustainability and recovery plan due to the expected drop in premium.

25. Please clarify looting and when this will be a valid claim under Sasria?
Looting is not a stand-alone Sasria peril and will only be considered as a valid claim in terms of Sasria if it occurs during an active Sasria peril for which Sasria accepts liability.

26. Will Sasria look into offering cover or a product with regards to BI – infectious diseases in the future (as most insurers are busy excluding this as a general exclusion)?
The Saria Act limits Sasria cover to specific special risks and we are not licenced to cover infectious disease. This will require changing the act. It is also subject to finding adequate reinsurance to cover this risk and the reinsurance market is currently averse to offering this cover.

27. If a Sasria claim arises where a client has not abided to the national lockdown regulations – will the claim still be entertained?
Sasria cover follows but does not attach to underlying policies. Any exclusion pertaining to duty of care and or non-compliance to the law may be considered when the claim is being validated. However, each claim is treated based on its own unique circumstances and merit and therefore we are only able to determine the liability on investigation of the claim.

Tax Filing Season 2021 Opened 1 July: Start Preparing!

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“The secret to getting ahead is getting started.” (Mark Twain)

To avoid the last-minute rush, the risk of errors and omissions, and the cost of late submissions, penalties and audits, there is no better time to get ahead on your company and individual tax returns than the day the 2021 tax season opens. 

What applies to your business – and to you?

The tax season for filing the 2020/2021 returns for both your individual tax and your company’s tax has now opened.

Have a look at the table below for details –

There were no changes to the corporate income tax (CIT) at 28%, or to the rate of tax on trusts at 45%. The Small Business Corporations (SBC) tax rate also remains unchanged, although the threshold is up to R83,100 from R79,000 last year (it increases for the 2021/2022 tax year to R87,300).

Personal tax rates still start at 18% for those earning up to R205,900 pa (up from R195,850 in the 2019/2020 tax year) and up to 45% on income exceeding R1,577,300 (up from R1,500,000 in the 2019/2020 tax year).

The changes to the tax thresholds and rebates for individuals are summarised in the table below –

Capital Gains tax and its specific exclusions also remain unchanged from last year, ranging from 18% for individuals and special trusts, 22.4% for companies and 36% for other trusts.

Given these tax rates, it is imperative to ensure you and your business is taking advantage of every tax deduction possible!

Take advantage of familiar and new deductions

The basic tax deductions for businesses and individuals are tax-deductible expenses, defined as any expense incurred in the carrying on of any trade, including employment income. However, there are many terms and conditions dictating when and how these deductions may be claimed, which makes it imperative to take professional tax advice.

For example, for the 2021 tax year with its numerous Covid-19 lockdowns, certain expenditure incurred while working from home can be included in the deductions. The expenses are calculated as a pro rata amount of home expenses such as rates and taxes, electricity, repairs and insurance. However, these expenses can’t be of a capital nature and no deduction can be claimed for any equipment provided by an employer without charge, or for anything that is reimbursed. Also bear in mind that claiming a tax deduction for home office use can impact on capital gains tax when you sell your home.

Red flags: what has changed since last tax season?

  • Building on last year’s first auto-assessments, SARS says that – starting in July – significantly more individual taxpayers will be auto-assessed this year. If you are selected to be auto-assessed, SARS will send you an SMS. Before you accept an auto-assessment, be sure to check with your accountant that all the relevant information and declarations have been correctly included, ranging from subsistence and travelling allowances and advances to fringe benefits; and that deductions for retirement fund contributions, medical and disability expenses and even donations have been correctly applied.
  • SARS has significantly improved its abilities to draw taxpayer information from third parties, including employers, financial institutions, medical schemes, retirement annuity fund administrators and other third-party data providers, making it easier than ever before for SARS to detect incorrect or undisclosed information.
  • SARS has notified certain taxpayers that they are under specific scrutiny, notably ‘wealthy’ taxpayers and those with ‘complicated’ tax structures, as well as taxpayers who hold offshore assets such as crypto currencies and those who receive rental income, including from Airbnb rentals. With regard to companies, SARS states: “CIT filing compliance is currently an issue for SARS and as SARS closes in on non-compliance by companies it urges companies to note that it is compulsory for registered companies that are required to file a return to do so on time and complete in all respects”.
  • The consequences of not submitting your tax return correctly by the SARS deadline are extensive.
    • SARS will levy a non-compliance penalty for each month that an individual’s return is outstanding. This can range from R250 up to R16,000 a month for each month that the non-compliance continues, up to a maximum of 35 months.
    • Failure to submit the return(s) for a company within the prescribed period will result in administrative penalties being imposed on a monthly basis per outstanding return and could result in a summons and/or criminal prosecution, which upon conviction is subject to a fine or to imprisonment for a period of up to two years.
    • While previously a mistake made by a taxpayer was only a crime when it was done “wilfully and without just cause”, things have changed. Now, there are two categories of offence. One requires wilfulness, but the other doesn’t. In that second category, even if non-compliance was due to negligence or ignorance, taxpayers can be convicted of an imprisonable criminal offence for, among others; failure to submit a return when required to do so, to retain all relevant substantiating records; to provide any information requested by SARS; or failure to disclose any material information to SARS.

What to do now

  1. Don’t delay! The deadline dates are deceptively distant. However, the 23rd of November is less than 5 months away, and 31 January is just a few short weeks later. Immediately starting to prepare to lodge your tax returns will ensure that there is time to attend to any potential problems, such as finding documents, obtaining third party information or getting professional advice.
  2. Ensure that all sources of income are included and that all rebates and amounts allowed to be deducted or set off are also factored in, including provisional payments already made and any claims for COVID-19 tax relief.
  3. Keep accurate records of all the calculations and source documents used as SARS may ask for these documents to be verified and/or for the calculations to be justified.
  4. Get professional assistance!

 

Your Tax Deadlines for July 2021

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  • 1 July – Start of Filing Season 2021 for Individuals (Non-Provisional)
  • 1 July – Start of Filing Season 2021 for Individuals (Provisional) & Trusts
  • 7 July – Monthly Pay-As-You-Earn (PAYE) submissions and payments
  • 23 July – Value-Added Tax (VAT) manual submissions and payments
  • 29 July – Excise Duty payments
  • 30 July – Corporate Income Tax (CIT) Provisional Tax Payments where applicable
  • 30 July – Value-Added Tax (VAT) electronic submissions and payments.

4 Ways to Measure Your Company’s Performance, Beyond Profit

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“Even if you are on the right track, you’ll get run over if you just sit there” (Will Rogers)

In the hostile business environment in which we find ourselves, every small advantage could be the difference between success and failure. While traditionally companies and their shareholders have looked at profit and the cold hard numbers for determining the current and future success of a business, there are many other non-financial measures, which can give as clear a picture as to just how strong a company is. These non-financial measures can provide clarity and context for the financial KPIs (key performance indicators), while at the same time offering a way to see whether your business is living up to its mission statement and vision in a way that the numbers cannot.

If looked at carefully these measures can help illuminate your business’ strengths and weaknesses, while also pointing to areas which may be affecting business performance.

Here then are four significant non-financial performance measures every business owner should be analysing.

  1. Efficiency and Delivery

    The profit margin may look good, but what it cannot do is tell you just how hard you are working for that profit, or where things can be improved. How you choose to examine your company’s efficiency and delivery will depend strongly on exactly what service you are offering. For those in manufacturing an excellent statistic to look at is the “Product Defect Percentage”, which can be worked out by dividing The Number of Defective Units in a Given Period by The Total Number of Units Produced in the Same Period. This combined with a general Efficiency measure, which in the manufacturing industry can be measured by analysing how many units are produced every hour and the plant’s uptime percentage, can give you a very clear idea of inefficiencies in the system.

    Deadline-driven companies and those in the transport or logistics industries may want to look more closely at their “On-time Rate”, being the percentage of time products were delivered on time as scheduled. Dividing the Number of On-Time Units in a Given Period by The Total Number of Units Shipped in a Given Period will give you your “On-Time Rate”.

    Customer support tickets are also a wealth of information. How many new tickets are opened, how quickly they are closed and how many go unanswered are all valuable when calculating customer satisfaction as well as flaws in your processes.

  2. Customer retention and conversion rates

    Your customer is obviously the backbone of your business. Keeping them happy will result in success, and likewise their dissatisfaction can result in bankruptcy. Tracking the pure numbers of clients that you have, and their loyalty will give you a good indication for the coming year. Did you gain new clients, and did your old ones stay with you? Answering no to either of these questions highlights problems. If you are getting in lots of new clients, but not managing to keep them then you need to look at costs, quality and service levels, because your PR and marketing are clearly working. Alternatively if you have a core of very loyal customers, but are struggling to find new work, then what is needed is additional budget on getting your name out there.

    Using the formula, Customers Lost in a Given Period divided by the Number of Customers at the Start of a Period, will give you your Customer Retention Rate.

    Further to this is just how successful your team is at closing a sale once that customer is through your door. Are you making sales, or winning pitches? Just how regularly? The formula for working out your conversion rate is: Interactions with Completed Transactions divided by Total Sales Interactions. If this is going up then your sales team is working optimally, but a declining conversion rate may hint at the need for morale boosts within the sales team, or even additional training.

  3. The power of promotion

    Every business owner will know that the word of mouth and customer recommendations are the single best way to increase business and yet very few entrepreneurs or new businesses will track this statistic. It requires a little work but setting up a “net promoter score” survey is a good way to gain feedback from your customers or clients.

    There are principally two kinds of net promoter score surveys, ones that focus on a customer’s loyalty to the brand, known as a “relationship survey” and ones that want to analyse a customer’s experience at a specific event known as a “transactional survey”. While the latter will allow you to drill down into the details of each customer contact point, it is the former which will give you a stronger overall impression of the reputation of your brand.

    This survey should be a maximum of 4 or 5 questions to avoid fatigue and increase responses. These questions should all focus on whether people enjoy interacting with the brand, where their problems may be, and a final question can ask how likely they are to recommend the company with a score out of 10.

    The likelihood that customers will recommend a brand to others can be worked out by assigning people who score the company a nine and higher as promoters and those who score it six or lower as detractors. Then take the Number of Promoters and minus the Number of Detractors to find your Net Promoter Score.

    Don’t forget to leave a comment box at the bottom of your survey and ask whether the customer wants to be contacted. People may have additional insights that your survey doesn’t cover.

  4. Maximising your workforce

    Staying ahead in business depends on your employees and getting the most out of each person’s skills will greatly benefit your bottom line. Retaining good staff is an important part of the business as in the long term having experienced and knowledgeable employees will make everything else work more smoothly at the company.

    High performers need to be identified and retained. A good business owner is always aware of the company’s “High Performer Turn Over Rate”. This statistic reveals the company’s ability to firstly attract, but also more importantly retain, good employees. Your High Performer Turnover Rate can be calculated by dividing the Number of High Performers Who Departed in Past Year by The Number of High Performers Identified.

    If you find your company is leaking high performers and the turnover rate is higher than you would like, it would be wise to work out just why this is happening. Your company’s “Salary Competitiveness Ratio” will give you an idea of whether people are leaving for money. You work it out, by taking your Average Company Salary and dividing it by the Average Salary Offered by Competitors.

    If it’s not your salary offering, then perhaps chances for advancement have been stifled? High performers tend to be ambitious. Looking at the “Internal Promotion Rate” gives a great indication of whether staff are being allowed to grow and develop at a reasonable rate. It can be calculated by dividing the Number of Promoted Individuals by the Total Number of Employees.

    No matter what you do, people will leave, so getting high performers into the company is always important. Looking carefully at the efficiency of your hiring process with regard to time and cost to recruit new employees, will also show whether your HR systems could use an improvement. Remember, every month a position is vacant means your company is running sub-optimally and losing out on profit.

How 67 Minutes on Mandela Day Can Change Our World and Benefit Your Business

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“What counts in life is not the mere fact that we have lived. It is what difference we have made to the lives of others that will determine the significance of the life we lead” (Nelson Mandela)

 

Nelson Mandela, our former president and world-renowned human rights champion, was born on 18 July. Fondly known as Madiba or Tata, his life was an inspiration to the world and he received more than 250 public honours, including the Nobel Peace Prize.

Why Mandela Day and why 67 minutes?     

In recognition of his immense contributions, 18 July was declared Nelson Mandela International Day by unanimous decision of the UN General Assembly in 2009. It is more than a celebration of his life and legacy; it is a global movement to honour his life’s work and to change the world for the better.

On his 90th birthday, Madiba said: “It is time for new hands to lift the burdens. It is in your hands to make of our world a better one for all.”

This call-to-action started a worldwide movement for social change, led by the Nelson Mandela Foundation which said: “Nelson Mandela has been making an imprint on the world for 67 years, beginning in 1942 when he first started to campaign for the human rights of every South African. By dedicating 67 minutes of their time – one for every year of Mandela’s service – people can give back to the world around them and make a contribution to global humanitarianism.”

No matter how small your action, Mandela Day is about changing the world for the better, and celebrating the idea that each individual has the power to transform the world, the ability to make an impact.

Top tips for making an impactful contribution

  • Align your company’s contribution with your vision and mission
  • Focus your contribution around your product or service or expertise
  • Make it a long-term commitment with an authentic contribution that will have a lasting impact
  • Focus on your company’s immediate community
  • Include your staff from the start
  • Collaborate – invite your suppliers, clients and even competitors to participate in your 67 minutes initiative
  • Advertise and market your 67 minutes initiatives – on your website, in the local newspapers and on social media using the hashtag #MandelaDay.

Ideas for Your 67 minutes

Madiba himself believed that education is what makes the greatest impact. He said: “Education is the most powerful weapon which you can use to change the world.”

For many companies, offering scholarships, internships, apprenticeships and mentorships is an excellent way to help change the world while reaping many benefits, including tax incentives and access to well-trained future employees.

Businesses can also simply contribute to the official Mandela Day Each1Feed1 campaign or join in a community initiative.

Companies can also link into the Mandela Day Global Network, a community of organisations, government, corporates and individuals that partner with the Nelson Mandela Foundation to drive Mandela Day and pursue its objectives. It is a base for the strategic partnerships of organisations with common goals aimed at globally coordinating efforts, sharing information and linking the needs to resources.

There are so many ideas…

  • Dedicate 67 minutes to brainstorm and plan your company’s formalised contribution going forward
  • Give your staff 67 minutes of paid time off work to support a charity or organisation of their own choosing
  • Spend 67 minutes as a team painting, cleaning and maintaining a school, clinic or library
  • Take 67 minutes to clean up the street or the local park, or volunteer to help out at a soup kitchen or animal shelter
  • Kick-off a project to plant 67 trees or a community garden over the coming year
  • Host a fundraiser such as a breakfast, fun walk or even a golf day to raise funds for a local cause
  • Donate your 67 units of your products, service or expertise to a start-up company or a local charity organisation
  • Pledge to donate R67 for each R50 raised for a cause by employees, clients and suppliers
  • Donate 67 blankets, food parcels, rugby or football kits, bicycles or computers to a school, church or a local organisation
  • Make company resources, such as delivery vehicles or computers, available to organisations when not in use (e.g. over a weekend)
  • Host a party for emergency workers and volunteers, or treat a group of underprivileged kids or the elderly to a fun day.

What are the benefits to your business?

Social contributions improve not only the lives of the project’s beneficiaries but also of those who are involved –

  • Creates an opportunity to link your business to a cause aligned with your corporate identity and business strategy
  • Improved brand recognition through association and positive media coverage
  • Placing your company in a positive spotlight improves corporate reputation and creates a competitive edge with regard to attracting and retaining investors, clients, suppliers and employees
  • Increased customer loyalty: consumers are attracted to companies that contribute to a greater cause, as it allows them to feel they are making an indirect impact just by supporting your company and brand
  • Higher employee satisfaction: a common cause for the greater good is an excellent way to bring employees together to make a difference as a team.

Download resources for businesses, schools, organisations and individuals, or a full Mandela Day toolkit, at https://www.mandeladay.com/  or visit  the Nelson Mandela Foundation for more information.

What You Should Know About Airbnb and Tax

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“All forms of rental income must be declared to SARS … We are … determined to make it hard and costly for non-compliant taxpayers not willing to meet their obligations. We are working hard to improve system capabilities, in order to detect those taxpayers who do not comply by using data to identify risk” (extracts from SARS media statement 11 March 2021).

The Basics

Airbnb is an online app which allows homeowners to rent out their property to travellers on an ad hoc basis with very little admin from their side. Users of the app simply search and select properties that have been listed in the area they are visiting, then pay on the Airbnb platform. The owner is responsible simply for letting them in and making sure the property is as described in terms of quality and cleanliness. In return for this service Airbnb takes a percentage of the total rental charged as commission.

It’s a simple and clean system that to date has been extremely difficult for SARS to track. The recent announcement by the revenue service that it was aware owners were not declaring this income and thus underpaying owed taxes and that they are determined to tax this income does, however, suggest that things are about to change.

“We are determined to make it hard and costly for non-compliant taxpayers not willing to meet their obligations. We are working hard to improve system capabilities, in order to detect those taxpayers who do not comply by using data to identify risk,” SARS announced.

This in itself poses a problem for SARS as while it’s easy to see just who is renting their property out on Airbnb by looking at adverts and cross-referencing them with ownership records, it is more difficult to see just how much time was spent by guests in the property. Nonetheless, the announcement does seem to indicate a determination by SARS to put a stop to tax avoidance in this area and this could spell trouble for those who have been letting out their properties, most likely in the way of audits. But just what is owed by owners, and how would they correct this situation?

Income tax returns and registering for VAT

There is no doubt income derived from letting a property out on Airbnb must be declared on your income tax return. As SARS made clear, “This is the same principle that applies to any person who has rental income from letting out their property as a homeowner, placing them under the same obligation to declare such rental income to SARS”.

According to registered CA(SA) and Group Financial Controller for SYSPRO Louise Buchanan, “A property owner who hosts fee-paying guests like in the case of Airbnb, has to declare the rental income on their income tax return as it is considered gross income.” She warns that in addition to this, any property owner earning more than R1 million within a 12 month period would also need to register as a VAT vendor and charge VAT 15% on rental income.

What about deductions?

As always, any income that comes with costs can be reduced by a portion or percentage of certain of those costs allowable for tax purposes.

According to Buchanan only expenses which arise in relation to the production of rental income can be claimed as a deduction.

“These include levies, rates and taxes, electricity and water, home-owner’s insurance, advertising, bond interest and agent’s fees,” she says, cautioning that, “If only a portion of a property is rented out, then only pro-rata expenses related to that portion are deductible”.

What about Airbnb themselves?

Airbnb has a notice on its site which states that “In areas that Airbnb has made agreements with governments to collect and remit local taxes on behalf of hosts, Airbnb calculates these taxes and collects them from guests at the time of booking. Airbnb then remits collected taxes to the applicable tax authority on the hosts’ behalf.”

This can sometimes be confusing for the home-owner who may believe that tax has been paid on their behalf already. Unfortunately, South Africa is not one of the areas in which Airbnb has made an agreement with government to collect and remit taxes on its behalf. Owners with properties in other areas are, however, able to take advantage of this fact, and a full list of these areas can be found here.

What to do if you didn’t declare Airbnb income and owe back taxes

Homeowners who have not been paying taxes on their Airbnb income are still liable for those taxes and SARS has made it abundantly clear that they aim to find and crackdown on non-compliant owners.

“Taxpayers are reminded that failure to comply with their tax obligations may result in administrative penalties being imposed in addition to interest, or even criminal action being taken against them,” the revenue service said.

Buchanan explains that in practice what this means is that administrative penalties are likely to be imposed along with interest, but has also warned that it would not be unheard of for criminal action to also be taken against a defaulter. She therefore urges all Airbnb owners who may be in default to consider declaring their Airbnb income through the SARS voluntary disclosure programme, which offers more favourable penalty amounts and a significantly reduced chance of criminal procedures being instated.

If you are an Airbnb owner who has not declared this income, it would be wise to speak to your accountant to evaluate just how much you might owe in back taxes and to try clear up the situation before you are the subject of a tax audit.