Does your business have a February financial year end? If the answer to this question is yes, then it is time to file taxes!

As the due date fast approaches, here are our stellar suggestions!

What is needed for an accurate calculation?

One of the unique aspects of paying provisional tax is having to project your annual taxable income. If you understate your revenue, if you understate your profit, if you understate your taxable income, SARS charges steep fines. This is to stop people from making this stuff up or reporting lower numbers.

1. Make sure that your accounting records are current and accurate. Without up-to-date financial information, performing an accurate tax calculation it will be impossible for your accountant. We offer backlog accounting services to assist in this regard. This will get your records up to date. We also offer monthly accounting services. This will keep your records current and accurate.

2. Make sure you have an E-filing profile and that your tax types for income tax and provisional tax are active.

a. Without full functionality your accountant will not be able to submit your

return.

We offer tax representative update services to assist in this regard.

3. Collaborate and engage with your accountant so they can consider in the

calculation any forecasted revenue or expenses which may affect the outcome of

the calculation. Throughout the year, our accountants will provide guidance that

enables you to run your company in a way that maximizes your tax benefits.

4. Submit a nil return if applicable.

Even if you owe no tax, or are still a dormant/non-trading company, as a

provisional taxpayer, you should still submit a provisional (nil) return. This is to

ensure an unbroken filing history with SARS and maintain a positive tax

compliance status. This is also to avoid unnecessary costs as SARS will raise

admin penalties, even if it is a nil return, if your return is not submitted on time.

We will always explain your obligations. Whether the outcome results in a

payment or a zero submission.

5. Make a third ‘top-up’ payment to avoid interest.

We advise clients to make a voluntary third payment within 6 months of your fiscal year end if you discover, after the tax year end, that you understated and underpaid your taxes for the previous year. You may choose not to do this and instead choose to pay the remaining amount when you file your final tax return (IT14) a few months later. However, be cautioned that you will be hit later with a nasty surprise when you discover that you owe interest on underpaid provisional tax on your tax assessment.

Our accountants will provide ongoing guidance not only at tax time.

6. Do not overlook investment income and capital gains.

If you have investments, it might be worthwhile to ask the financial institution for a provisional statement to make sure your year-end estimate of taxable income includes your interest and capital gains. All too often, taxpayers wait until they declare their interest and/or capital gains in their annual tax return to consider these amounts, and by then, it is usually too late to avoid incurring an underestimation penalty on their second provisional payment.

7. If the last day of February falls on a weekend or public holiday.

If the last day for submission falls on a public holiday or weekend, the submission must be made on the last working day prior to the public holiday or weekend.

8. Understand your tax obligations and know the due dates.

Companies are required to file Provisional Tax returns. The filing and payment by companies of provisional tax (IRP6’s) is 6 months after year end (first period). At fiscal year-end (second period) and six months after fiscal year end (third period). The third provisional tax submission is only in case you need to do a correction on the second submission made. Companies are required to submit an income tax return: (ITR14) within 12 months from the date on which their fiscal year ends.

If you are not sure when your financial year end is, you can find this on your company registration documents.

Example:

companies with a February 2024 financial Year end.

Due : 29/02/2024

ITR14 2023

IRP6 2024.02

What we do for you:

We unburden you from the compliance workload.

Not only will we ensure you are aware of your obligations in a timeous manner, but we also understand that tax planning is more than just completing the forms; we pride ourselves in doing so in the way that is going to save you money!