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Is it possible to run a successful, ethical business?

IS IT POSSIBLE TO RUN A SUCCESSFUL ETHICAL BUSINESS?

It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that you will do things differently

- Warren Buffett

There’s no denying that current economic conditions are not ideal. Tough times have forced many business leaders to make tough decisions. With costs spiralling ever upward, it can be tempting to think that cutting corners in business, dodging essential regulations, and making other unethical decisions may be the only way to keep your head above water. But you fall into this trap at your peril.  Luckily it is still possible to run an ethical business and make a profit.

During tough economic times it can be tempting to illegally cut corners, hire staff at lower salaries, or avoid paying taxes you know you should be paying. The unethical approach can be very tempting if you find yourself battling to keep your business going. Taking the low road, would, however, be the wrong choice.

An ethical business is one that’s transparent and honest about everything from its accounting practices, to its treatment of employees, interactions with the public, and the information it shares with shareholders. Truly ethical companies put the wellbeing of their customers and employees on par with profits. Now, backed by repeated studies, the financial experts agree that running a business ethically isn’t just better for a business’ short-term success, it’s also far more profitable in the long run. But why?

Consumers demand ethical management

With climate change at the forefront of every modern consumer’s thinking, the demand for sustainable, and ethical business practices has never been higher. Company business practices are now easier to scrutinise and more consumers are taking an active interest in the ethical aspects of the companies they deal with. In short, customers want to buy from ethical businesses.

A recent study into consumer intent carried out by OpenText found that 88% of global consumers surveyed would rather buy from companies with ethical sourcing structures in place and that 83% of global respondents said they’d be willing to pay more for products they could be sure were ethically sourced.        

The trickle-down effect

Moral and ethical business leadership has also been shown to reduce friction in teams and allow employees to better focus on their jobs. In a recent study, researchers at the University of Lahore revealed that supervisors who act ethically are more trusted by their employees and that this trust translates into boosted productivity from staff who are both more engaged and less emotionally exhausted. According to Gallup, teams which are highly engaged are, on average, 21% more productive and 28% less likely to steal from the company.      

Big Brother is watching

When Volkswagen was ordered to pay back R201-billion to customers in the US who had been sold cars with falsified emissions data in 2015, the writing was on the wall for companies hoping to save money through unethical behaviour. In South Africa, you don’t need to look far for examples of large companies being brought to their knees by the unethical finance decisions of the boards. Steinhoff and Telkom have suffered for their questionable finance decisions and abusing their industry dominance respectively. And a R4.1-billion fine was issued to global software company SAP around bribes paid to South African and Indonesian officials to obtain valuable government business.

The truth is, regulators are looking at companies harder than ever before, and those who think they can slip through the legal cracks are increasingly finding themselves coming up short.      

Being ethical will actually save you money

While many think ethical behaviour may cost more, there are multiple examples where “doing the right thing” has in fact led to a decrease in the cost of production. For instance, both PepsiCo and Hilton Worldwide have reported that their energy and waste-reduction strategies have resulted in billions of dollars in savings.   

Onwards and upwards

Without a doubt, these are powerful incentives, and similar benefits can also be found for your company. Whether you want to install solar power to go greener and save money or ensure you never fall foul of obscure financial regulations, as your accountants, we are always ready to help.

Three-Pot Retirement Savings

BEWARE THE TAXMAN WHEN ACCESSING YOUR THREE-POT RETIREMENT SAVINGS!

The two-pot system is meant to support long-term retirement savings while offering flexibility to help fund members in financial distress.

- National Treasury

Two new ‘pots’ have been added to SA’s retirement system from 1 September 2024. This allows South Africans to access a portion of their retirement savings before retirement, without having to resign their jobs and withdraw all their savings, as before.  Beware, however! There can be significant immediate and long-term tax implications to dipping into your savings! This is where we come in. Allow us to ensure that you and your employees understand the full tax consequences and possible alternatives before withdrawing retirement savings.

THE THREE POTS OF THE NEW RETIREMENT SYSTEM

With two new pots added to what used to be the one-pot South African retirement system, fund members can now access a portion of their retirement savings before retirement, while still preserving savings for retirement. There are, however, immediate and long-term tax and other implications that should be carefully considered!

 

BEFORE 1 September 2024

AFTER 1 September 2024

Pot

The VESTED pot

The SAVINGS pot

The RETIREMENT pot

Contributions

  • Holds all retirement fund contributions made before 1 September 2024 (less 10%, maximum R30,000, moved to Savings pot (i.e. seed capital)).
  • Holds seed capital calculated at the end of August
  • From 1 September, one-third of your contributions will go into this pot.
  • From 1 September, two-thirds of your contributions will go into this pot.

Rules

  • Existing rules continue to apply.
  • New rules apply.
  • New rules apply.

 Pre-retirement withdrawal

  • Can only be accessed before retirement if you resign, in which case you can withdraw all the retirement savings.
  • Pre-retirement withdrawals are taxed according to the retirement fund Withdrawal Benefit Tax Table.
  • Funds can be accessed before retirement.
  • Only one withdrawal per tax year: minimum R2,000, no maximum.
  • If no withdrawals are made, funds remain available and benefit from tax-free growth.
  • Early withdrawals are considered income, and subject to income tax at your applicable marginal rate.
  • Funds cannot be accessed until retirement, not even if you resign from your job (exceptions: emigrating, ceasing SA tax residency, or if a non-resident’s work or visitor’s visa expires).

Withdrawals at retirement

Allowable withdrawals at retirement will be taxed according to the Retirement Fund Lump Sum Tax Table. Not only is the first R550,000 tax free, but the rates in this table are much more forgiving in general.

  • At retirement, can be added to the Retirement pot (tax-free) or be withdrawn in cash and taxed according to the Retirement Fund Lump Sum Tax Table. Not only is the first R550,000 tax free, but the rates in this table are much more forgiving in general.
  • The full value must be used to purchase an annuity at retirement.

TAX AND OTHER ISSUES

Withdrawing from any of the pots should be approached with caution. In addition to the fees that will be charged, and the potentially devastating impact on your eventual retirement savings, there are also tax implications that must be carefully considered.

  • It’s significantly more expensive from a tax perspective to withdraw retirement funds before retirement age (normally 55), because the Withdrawal Benefit Tax Table or Individual’s Tax Table will apply. Instead, waiting until retirement to access savings – when the Retirement Fund Lump Sum Benefits or Severance Benefits Tax Table applies – is a far better tax option.
  • Up to R550,000 drawn as a cash lump sum at retirement may be tax free. However, this R550,000 is a cumulative withdrawal total over your lifetime. That means this tax benefit could be eroded by pre-retirement withdrawals.
  • Transfers from the Vested and Savings pots into the Retirement pot are also tax-free.
  • Employer contributions are still treated as taxable fringe benefits.
  • Early withdrawals from your Savings pot are considered income and are subject to income tax as per the tax directive the fund manager will request from SARS. What’s more, any outstanding taxes you owe SARS will automatically be deducted if you make a withdrawal.

Depending on your annual income and the amount withdrawn, a pre-retirement withdrawal from your Savings pot – taxed at your individual marginal tax rate – could also push you into a higher tax bracket. This would mean paying more tax on all your income for the year. Here’s an example of the potential impact of withdrawing R80,000 from your Savings pot. Waiting until retirement age to withdraw the same amount could be tax-free.    

Earnings and tax

Without R80,000 Savings pot withdrawal

With R80,000 Savings pot withdrawal

Annual taxable earnings

R300,000

R380,000

Marginal tax bracket

26%

31%

Annual tax payable

R59, 032

R80, 307

Difference

 

+R21,275

Source: SAICA

Hidden costs of early withdrawals
Your full retirement fund contribution (one-third Savings pot; two-thirds Retirement pot) is still tax deductible up to 27.5% of annual income, up to a maximum R350,000 per tax year. This remains one of the biggest tax breaks out there, but is effectively cancelled out by the tax payable on an early withdrawal. Early withdrawals also have another cost – the loss of tax-free growth that could have been earned on your savings.  Continuing with the example above, if the R80,000 is not withdrawn, but instead left to grow at an average annual return of 10% for 25 years, the projected returns are R866,776 (equivalent to R201,958 in today’s terms assuming 6% inflation). This means you could lose tax-free growth of R121,958 by withdrawing just R80,000!  

Help is at hand!
Understanding the tax and other implications of early retirement fund withdrawals in the short term and at retirement will help you to make better-informed financial decisions.  Early retirement fund withdrawals are likely to be more expensive in tax and lost investment growth compared to other options such as overdraft facilities, credit cards or home loans.

Top tips for a hasstle-free Tax Season 2024

TOP TIPS FOR A HASTTLE-FREE TAX SEASON 2024

We urge taxpayers to be transparent and accurate when filing their tax returns to enable a constructive relationship with SARS.

- Edward Kieswetter SARS Commissioner

Tax Season 2024 is now open! We’ve put together a list of the timelines and changes for every type of taxpayer. Luckily, you don’t have to worry about the finer details, as we’ve got your back. Our team is familiar with all the requirements, up to date with the changes for this filing season, and ready to implement our streamlined processes. We won’t just make your Tax Season 2024 hassle-free; we’ll also save you time and money.  July 15 marked the start of the 2024 Filing Season for provisional and non-provisional taxpayers who were not subjected to auto-assessments, covering the tax period 1 March 2023 to 29 February 2024. As part of our quest to simplify your life, we’ve compiled a list of the timelines and the changes since last year. But first, here are five ways we can help you this tax season.

5 WAYS WE'VE GOT YOUR BACK

We can help you avoid non-compliance. SARS has warned that the use of technology and data has enhanced its ability to detect non-compliance such as, for example, not including rental income in a return, which could potentially make you guilty of fraud.

Our team is up to date with the many changes in tax legislation introduced each year and our understanding of the complexities and intricacies will streamline your filing season.

We ensure all the boxes are ticked on every tax return you need to submit. This will help you to avoid a SARS audit where possible, and to ensure any verification or audit can be concluded quickly and cost-effectively.

We make sure that you claim every tax rebate, deduction or incentive available to you, so you don’t under-claim and pay more tax than required.

We protect you from scams. Sadly, filing season is also scamming season. We are alerted about all the latest scams and keep your information with SARS updated to prevent fraud and identity theft.

DATES TO DIARISE

The company provisional tax due dates shown in the table above are the same for individual provisional taxpayers, but individuals who are provisional taxpayers will be due to file their annual personal income tax (PIT) returns in January at the end of the tax season as announced by SARS.

Taxpayer

Timeline

Details

Auto-assessed individual taxpayers
(non-provisional)

  • Notices sent out by SARS: 1 – 14 July 2024
  • Deadline: 21 October 2024
  • Agree with your auto-assessment? Simply make the payment due/await your refund.
  • Don’t agree with your auto-assessment? Claiming the solar rebate? File a normal return before 21 October 2024.
  • For auto-assessments issued after 21 October 2024, file a normal return within 40 business days.

Individual taxpayers
(non-provisional)

15 July 2024 – 21 October 2024

  • Non-provisional taxpayers earn only wages/salaries (no taxable passive income above R30 000) and pay taxes due via PAYE.

Provisional taxpayers

15 July 2024 – 20 January 2025

  • Companies are automatically provisional taxpayers.
  • Individuals who earn income other than, or in addition to, a salary/remuneration, on which tax has not been deducted/withheld, are also provisional taxpayers. 

Trusts

16 September 2024 – 20 January 2025

  • The filing date extension to September is just for the 2024 Tax Season, the usual June/July filing schedule will apply in 2025.

CHANGES TO TAKE NOTE OF

Various changes have been made since last year – the quickest way to find out if any of these apply to you or your business is simply to contact us.

  • The pool of auto-assessed taxpayers increased to about 4.8 million this year, compared to around 3.8 million taxpayers last year.
  • A solar energy tax credit of 25% of the cost of the solar PV panels (maximum R15,000) is available for new and unused solar PV panels acquired and brought into use for the first time by individuals between 1 March 2023 and 29 February 2024.
     
  • Pro rata retirement fund contribution deductions are now allowed if an individual taxpayer’s year of assessment is less than 12 months.
  • Exemption of tax-free investment amounts received or accrued: if your year of assessment is less than 12 months, the applicable contribution limit (currently R36,000) will be applied pro rata.
  • Deductions in respect of buildings in Urban Development Zones – the allowable deduction has been extended until 31 March 2025.
  • There’s a redesigned renewable energy tax deduction for certain machinery, plant, implements, utensils and articles used in production of renewable energy.
  • ITR12 Form changes affecting the foreign employment income exemption and Beneficial Owner (BO).


THE BOTTOM LINE
If this is all a tad confusing, fret not! Our team of seasoned tax professionals will make all the difference this filing season. We are familiar with all the requirements and up to date with all the changes. Allow us to make your 2024 tax season hassle free.

Five Foolproof tips for Onboarding Remote Employees

FIVE FOOLPROOF TIPS FOR ONBOARDING REMOTE EMPLOYEES

Employee orientation centres around and exists to help the individual employee, but it is the company that ultimately reaps the benefits of this practice.

- Michael Watkins, author of “The First 90 Days”

Getting a new employee comfortable with company systems, values and dynamics can be a difficult ask at the best of times. And it’s even harder if you’ve got to do it all via video call.  Of course, remote onboarding has its challenges. But this doesn’t mean it can’t be done well. Here are five simple tips for ensuring your remote employee is brought into the company effectively and efficiently.

HERE ARE OUR TIPS

Onboarding a new employee is always a delicate task. And it’s a whole lot trickier (and arguably more important) if your new hire is going to be working remotely. Here are our tips for getting your new remote employee – let’s call her Sharon – up-and-running with minimal fuss.

01

PLAN AHEAD

By the time Sharon’s first day at the company dawns, you should already have sent her a package containing everything she needs to do her job. This package might include a laptop, cell phone, webcam and headphones – all set up and ready to use with your chosen software. It’s also a nice idea to include a personalised welcome letter, a small gift like a coffee mug, and an employee handbook containing useful contacts and company procedures.

02

GO DIGITAL

It goes without saying that all your onboarding material now needs to be digital – both for you to use during online meetings and to send to Sharon for her own reference. If you have the resources, consider making each learning section into a small video, which you can put online (it doesn’t have to be Hollywood standard).

As your accountants, we can provide you with the information you need to create a digital FAQ on all matters regarding payment, taxes, bonuses and raises. You can also create a digital checklist for employees to complete that includes items like “Set up email address” and “Fill in medical aid details”.

03

TELL THEM A THOUSAND TIMES

The key to any successful onboarding is to make sure the important information has been properly understood. Don’t be afraid of telling Sharon something twice, or even ten times if that’s what it takes. If possible, assign her an experienced co-worker who can act as a buddy to answer questions in a friendly and accessible way. This is handy when she wants to know something simple and doesn’t want to bother you.

04

SHOW THEM AROUND

Make sure you schedule at least one meeting for Sharon to meet her team. Everyone should be there to introduce themselves and give Sharon a friendly virtual tour of your office or facilities. This warm, face-to-face introduction will help her feel at home.

05

ENCOURAGE ONGOING COMMUNICATION

Working remotely, it’s easy to forget there are others around you. In the first few weeks, schedule regular meetings with Sharon simply to see how she’s settling in. Ask her if she’s having any challenges and give her feedback on her progress. Addressing concerns and correcting errors early on will ensure they don’t become entrenched – but be careful not to dent Sharon’s confidence. You can also use her feedback to improve your own onboarding process.

When should your company be cautious of AI?

WHEN SHOULD YOUR COMPANY BE CAUTIOUS OF AI?

Artificial intelligence is just a new tool, one that can be used for good and for bad purposes and one that comes with new dangers and downsides as well.

- Sarah Jeong, Information and Technology Journalist

Artificial Intelligence (AI) is everywhere. Looking around, it seems just about every business in just about every sphere is trying to leverage the technology to streamline their operations, automate tasks and even interact with their clients. But even as AI becomes integrated with everything from banking to your toothbrush, many experts are warning that it still falls short in several critical areas. Here’s what you need to know to make sure you don’t leave yourself expecting too much from your little robot buddy.  Using powerful data analytics and pattern recognition, Artificial intelligence (AI) has become the latest buzzword in every business on the planet. If you looked hard enough, you could probably find an AI solution for every application a business could need (and a few no business could ever need!). Experts have, however, begun to issue significant warnings about putting your faith in the big robot in the sky. 

Here are three situations where companies should be cautious of using AI.

Don’t be fooled by the name: AI is not truly intelligent. Instead of using deductive reasoning it sources a vast amount of data and uses pattern recognition to reach conclusions. This means that AI is only as good as the data it’s given. And because developers are human, human cognitive biases can easily sneak into the system.       

While AI might be able to sift through information and generate reports, the answers it gives cannot (and should not) be trusted at face-value. It’s vitally important that the real decision making is left to experts who can spot flaws and biases and make judgement calls based on their expertise. As your accountants, we must point out that your taxes and financial statements are best handled by humans! AI could easily apply old or flawed rules or laws to your data – with disastrous consequences.

Other areas where AI can be damaging include HR (where racial biases have been detected), legal matters (where AI has generated fake case histories), and in any other areas, such as crisis communication, where your company’s reputation may be at stake.

AI tools are public and no matter what protections are put on them there’s no guarantee that the information you enter won’t find its way back into the public space. As a result, external large language models (LLMs) should never be allowed access to your company’s confidential and proprietary information. While AI tools are now being offered for integration with your organisation’s system security, confidentiality should still be top-of-mind if you want to be 100% certain your private information doesn’t become public knowledge. This is a classic case of better safe than sorry.

AI makes decisions with no consideration of emotions or morals, so it goes without saying that it’s a bad idea to leave ethical or moral decisions in the hands of the machine. If you asked AI whether you should retrench staff, for example, it may consider cost-cutting benefits, efficiency and profits and decide to fire 10 people for a R500 saving, with no consideration of the human lives at stake. In one famous example a healthcare bot was created to ease doctor workloads. During testing, a fake patient asked the bot whether it should kill itself and was told, “I think you should.” Workload eased, but at what cost?

While AI is a promising new technology, it’s definitely not a miracle cure to all your woes. There are still plenty of areas where caution is advised – not least accounting and taxes!

Do you qualify for these tax rebates? Let us check!

DO YOU QUALIFY FOR THESE TAX REBATES? LET US CHECK!

“The hardest thing in the world to understand is the income tax.”

- Albert Einstein

Tax season isn’t all bad. Did you know that SARS offers a plethora of rebates, deductions and incentives to both individual taxpayers and businesses? When correctly applied, these tax relief measures can make a substantial difference to your tax liability.  This is where we come in. We can check which of the various tax relief measures listed in this article apply to you, your company and your employees, making sure you don’t pay more tax than you should – and potentially achieving significant savings.

Tax rebates, deductions and incentives provide relief to taxpayers by reducing the amount of tax payable to SARS, resulting in welcome tax savings. But how do you figure out which rebates, deductions or incentives apply to you – and what’s the procedure for claiming them?

This is where we come in. Chances are we’ve already applied a number of these rebates, deductions or incentives to your tax returns. But here’s a list of some of the tax rebates, deductions and incentives that could make a substantial difference to your SARS bill for the 2024 Tax Season. Some of them are fairly well known, but others are pretty obscure.  If you think you qualify for additional rebates, deductions or incentives, please do get in touch. We are committed to ensuring that you don’t pay more tax than you should.

FOR INDIVIDUALS

  • Tax threshold: You only start paying tax when you earn more than R95,750 (under 65 years); or R148,217 (65 – 75 years); or R165,689 (75 and older).

  • Tax rebates: Taxpayers also qualify for a R17,235 primary rebate; an additional secondary rebate of R9,444 if over 65, and a further tertiary rebate of R3,145 if over 75.

  • Medical tax credits for medical scheme contributions can be deducted from your tax payable at R364 each per month for you and your first dependent, and R246 for each subsequent dependant.

  • The additional medical expenses tax credit allows qualifying out-of-pocket medical expenses to be deducted from the normal tax payable. This applies to medical expenses that were not recovered from your medical aid.

  • Retirement fund contributions to a locally-registered pension, provident, or retirement annuity fund are deductible subject to certain maximum limits.

  • Amounts received/accrued from tax-free investments are exempt from tax, subject to limitations.

  • Donations to certain approved public benefit organisations are allowed as deductions, up to a maximum of 10% of taxable income.

  • A solar energy tax credit of 25% of the cost of the solar PV panels (maximum R15,000) is available for new and unused solar PV panels acquired and used for the first time between 1 March 2023 to 29 February 2024.

  • Home office expenditure: Employees who have a dedicated area used regularly and exclusively for “trade” in their home may be allowed to deduct, pro-rata, certain expenses like rent, repairs, utilities, phones and internet.

  • The foreign tax credit is a rebate against income tax for foreign taxes paid on foreign-sourced income.

  • Taxpayers carrying on a business in their individual capacity or in partnership may deduct business expenditure or losses on the same basis as companies.

TIP OF THE ICEBERG   
These are just some of the tax rebates, deductions or incentives available to taxpayers. Our expertise in correctly identifying and applying the relevant rebates, deductions or incentives to your tax matters can significantly reduce your tax burden this tax season. 

FOR BUSINESSES

  • Tax relief measures for small business corporations (SBCs) allows for a progressive tax rate, immediate write-off of new plant or machinery, and a wear-and-tear or accelerated allowance on depreciable assets.
  • Tax relief for qualifying micro businesses involves a simplified turnover tax, instead of the usual taxes (income tax, provisional tax and Capital Gains Tax) payable by companies.
  • Energy efficiency savings incentive provides a deduction for savings from implementing energy-efficient methods in the production of income at R0.95 for each kilowatt hour (or equivalent) saved.  
  • The redesigned renewable energy tax deduction for certain machinery, plant, implements, utensils and articles used in production of renewable energy allows a 125% deduction of the cost incurred for eligible assets brought into use for the first time between 1 March 2023 and 28 February 2025. Machinery, plant, implements, utensils and articles used in production of renewable energy outside of the above-mentioned period may qualify for a separate deduction (which allows a 100% deduction of costs incurred).
  • Research and development (R&D) costs related to certain R&D activities are 150% deductible, while depreciation on R&D machinery and capital assets may be accelerated and buildings used in R&D may be written-off over 20 years. 
  • The learnership agreements tax incentive allows employers that train employees in a regulated environment an additional income tax deduction. (This is not the same as the Employment Tax Incentive (ETI) that encourages the employment of young people by reducing employees’ tax due by the company).
  • Donations to certain charitable organisations approved as public benefit organisations are tax deductible, up to a maximum of 10% of taxable income.
  • A depreciation (wear and tear) allowance may be deducted on movable assets used for the purpose of trade. There’s also an allowance for assets disposed of or scrapped during a year of assessment.
  • Interest expenses incurred in the production of non-exempt income and for the purposes of trade are generally deductible.
  • Bad debts are tax deductible under certain circumstances and a tax allowance is also provided for doubtful debts.
  • The foreign tax credit is a rebate against income tax for foreign taxes paid on foreign-sourced income or a deduction against income of foreign taxes paid on SA-sourced income.
  • There’s an allowance for new commercial buildings or improvements used by a business during the assessed year, equal to 5% of the cost to the taxpayer.
  • There’s an allowance for certain residential units, equal to 5% of the cost to a taxpayer of new units or improvements.
  • Deductions in respect of erection or improvement of buildings in Urban Development Zones have been extended until 31 March 2025
  • A Special Economic Zones (SEZ) incentive in certain SEZs includes a reduced corporate tax rate of 15%; a 10% allowance on the cost of new buildings or improvements; and an employees’ tax reduction for the employer by virtue of the ETI (with SEZs eligible for the ETI to apply irrespective of the employee’s age).

7 Effective Business Lessons Inspired by Madiba

7 EFFECTIVE BUSINESS LESSONS INSPIRED BY MADIBA

We can in fact change the world
and make it a better place.

- Nelson Mandela

In just a few days, on 18 July, the world will commemorate Nelson Mandela Day, dedicated to honour our Tata, Madiba, known for his great leadership skills and his ability to inspire people around the world to greater heights.  Mandela also left us with some really effective lessons that can inspire and encourage business owners and entrepreneurs in these uncertain times. In this article, we highlight 7 important business lessons inspired by Madiba’s wisdom.

Rolihlahla Mandela was born into the Madiba clan in Mvezo, Transkei, on 18 July 1918. He was given the name Nelson by a teacher on his first day at school. Affectionately known as Tata, grandfather of the Rainbow Nation, Mandela is best remembered for successfully leading South Africa’s transition from apartheid to a multiracial democracy.

Mandela is the only person honoured by the United Nations with his own international day: Nelson Mandela Day on 18 July each year. On this day people around the world honour Mandela’s contributions and humanitarian work by following the example he set. He donated half of his presidential salary and part of his Nobel prize money to help street children. And he established the Nelson Mandela Children’s Fund which continues his legacy by focussing on education, HIV/AIDS and ‘peace and reconciliation’.

Nelson Mandela’s life and words of wisdom provide inspiration that can help you lead your business to greater success.

01

Everyone can rise above their circumstances and achieve success if they are dedicated to and passionate about what they do.

Passion and dedication are crucial to successful business: passion drives innovation and creativity, and dedication keeps you going when things get tough.

02

Vision without action is just a dream, action without vision just passes the time, vision with action can change the world.”

As an entrepreneur or business owner, vision is vital. But it doesn’t count for anything if you and your team don’t take action to make it a reality. 

03

The mark of great leaders is the ability to understand the context in which they are operating and act accordingly.

Today’s business context is more complex, multifaceted, and fast-changing than ever before, requiring agility in both decision making and execution.

04

After climbing a great hill, one only finds that there are many more hills to climb.

Entrepreneurship and business ownership inherently entail challenge after challenge, day after day, year after year. Expect and embrace challenges, focussing on finding the opportunities they hold.            

05

The brave man is not he who does not feel afraid, but he who conquers that fear.

We all face many kinds of fears all the time: fear of failure, disappointment, the unknown, even of success. What sets entrepreneurs and business owners apart is that they don’t allow fear to stop them – they are brave enough to try, to step out, to take the risk … despite the fear.        

06

Education is the most powerful weapon which you can use to change the world.

Continuously educate yourself to better manage and grow your business. Also educate and upskill your employees on an ongoing basis: offer mentorships, internships, learnerships and apprenticeships; facilitate capacity building for Non-Governmental Organisations (NGOs); and sponsor schools or scholarships in the community or in your industry.  

07

Overcoming poverty is not a task of charity, it is an act of justice.

Even small businesses can make a meaningful contribution, and it makes sense to start in your immediate community. Make an authentic, long-term contribution that will have a lasting impact, by focusing your company’s contribution around your product, service or expertise, and aligning it with your vision.

Hopefully you can apply some of Mandela’s wisdom in your own business. And don’t forget to give 67 minutes of your time on 18 July.

How to breeze through a SARS Audit

how to breeze through a sars audit

The aim of a tax audit is to determine if the taxpayer has complied with the relevant legislation administered by SARS

- SARS

Nobody wants to go through a SARS audit, as collating all the documents requires time, money and effort. What’s more, it may result in the levying of understatement penalties of up to 200% with the harsher 200% penalty applying in instances where the taxpayer is either obstructive or is a repeat offender.  You can expect more frequent and tougher audits as SARS continues to step up its enforcement and collection efforts. But it’s not all doom and gloom. Allowing our experienced team to manage your SARS audits will save you time and money, and ensure compliance – allowing you to breeze through the audit process.

HERE'S ALL YOU NEED TO KNOW ABOUT A SARS AUDIT

During a tax audit, SARS examines financial statements, accounting records and supporting documents to check if you or your business correctly declared your tax position on a tax return. If you didn’t submit a return, an audit will investigate if your actions complied with tax law.  Either way, being selected for an audit – whether for income tax, VAT, employees’ tax or capital gains tax – poses significant risk.

A substantial amount of time, cost and effort can be required to collate the information, documents and clarifications needed to complete an audit … Especially if the audit spans several years.

If you don’t submit the requested audit information, SARS will raise a revised assessment, determining the amount of your tax liability or refund, based on an estimate from information readily available or obtained from a third party, even if this information is incomplete.

What’s more, an audit can lead to the levying of understatement penalties of up to 200% of the shortfall where an understatement occurred. The 200% penalty is levied in instances where the taxpayer is either a repeat offender or is being obstructive and  is also guilty of intentionally evading taxes.

An audit can even result in criminal proceedings. It’s a criminal offence to refuse or neglect to supply relevant material requested by SARS without just cause. And remember: SARS is no longer required to prove that a taxpayer wilfully committed a tax crime – taxpayers can now be found guilty of a tax crime if a mistake was made, or in cases of negligence.

SARS audits are increasingly common. Any taxpayer can be selected for audit, based on any consideration, including on a random or cyclical basis, or on a risk assessment basis. Even tax-compliant companies and individuals that get clean audits every year are regularly audited.  Taxpayers are flagged for audit through SARS’ sophisticated case selection methodology. The taxpayers most likely to be audited include those who earn additional income and those whose tax returns do not align with information from other sources, for example, where there is a mismatch between the annual turnover and the VAT declarations for the year.

  1. A Notification of Audit letter provides the initial scope of the audit, documents required, and details of the SARS auditor. 
  2. SARS can request additional material at any time, and they can obtain information from third parties. 
  3. SARS prefers to receive audit documents electronically via eFiling or for them to be submitted at a SARS branch, but collection or delivery of documents can be arranged. 
  4. An audit can take between 30 business days and 12 months to complete – or even longer in some cases. The time taken to complete an audit depends on the complexity of the specific case.
  5. SARS will provide progress reports on the audit every 90 days.
  6. If SARS agrees with your tax position, it will issue a Finalisation of Audit Letter to conclude the audit.
  7. Alternatively, SARS will issue an Audit Findings Letter which details the grounds of the assessment, amounts due, and payment deadlines.
  8. If you disagree with SARS’s findings, you have 21 days to respond. You must provide evidence to support your dispute.
  9. Refunds will only be paid once the audit concludes.

Luckily most audits we deal with end happily. Here are a few pointers to ensure yours does too.

  • Keep correct and accurate records: Speak to our team today to ensure you’re up to date with all legislative requirements.
  • Act immediately: If you receive a Notification of Audit letter, contact us immediately. We can provide advice and manage the ongoing communications with SARS on your behalf, while collaborating with the auditor to avoid penalties.
  • Rely on expertise: Our team will guide you through the audit process – from clarifying what documents are required, to submitting these documents in the required format, and managing the next steps in the process, we’ll do what it takes to ensure a successful audit.
  •  Protect your rights: SARS is legally required to follow the audit process by the book. We will ensure you receive fair tax treatment and audit outcomes.

5 Top Employee Retention Strategies

5 top employee retention strategies

People want to know they matter and they want to be treated as people. That’s the new talent contract.

- Pamela Stroko, Vice President, HCM Transformation & Thought Leadership at Oracle Corporation

Remote work, freelancing, and the gig economy have changed the face of business completely. The ease with which employees can sell their time, change jobs, or work for global brands means the competition for top talent has never been more aggressive. Employees with the skills and/or experience to impact your bottom line are more in demand than ever before. Whether you run a mom-and-pop coffee shop or a global conglomerate, these five tips will help you hang on to the people who build your business.

Any business leader knows that hiring the best team possible is the first step to success, so it stands to reason that keeping them around is just as important. What’s more, finding, hiring and training new employees is an expensive process.  As the world becomes increasingly connected, the battle for top talent has expanded beyond the city you’re based in. On top of this, job apps have made it even easier for your employees to find work elsewhere if they are not entirely happy.  This has all put employee retention in the spotlight. What are employees looking for? What makes them stay? And just what does your business need to do to keep your best staff on your books?

THESE 5 TIPS WILL HELP REGARDLESS OF THE KIND OF BUSINESS YOU RUN

For a long time, business management experts recommended employing outside of the company. This advice has now changed completely: Experts now say you should promote your existing staff. Your employees want to grow in their careers. Of course they do. While they might be happy now, if there’s no opportunity for advancement they’ll soon start looking elsewhere. A 2018 report found that 93% of employees would have stayed at their jobs longer if those companies had invested in their careers.

Employees also benefit from personal and professional skills growth. It’s vital to ensure your team is up to date on the latest technologies, but it’s also important to facilitate growth in directions of their own choosing. This doesn’t just benefit them – it also brings new skills into your company.

By giving your staff time to attend conferences, giving them study leave, or paying for continuing education you are guaranteed to improve your team and keep your employees for the longest possible time. You should also consider implementing a mentorship system where newcomers and younger staff are tutored and advised by senior staff members. Studies show that mentorship benefits both the new arrival and the old hand.

Since the pandemic, people have become much more precious about their personal lives. If you acknowledge that your employees have lives beyond the office (fancy that!) you’re far more likely to retain them.  Flexible working hours, remote offices, and even childcare support are now vital if you hope to keep employees in the long term. If you run a business where remote work isn’t possible, why not consider flexitime, or a shorter work week instead? Removing the stress your employees feel over their families has the added advantage of making them perform better when they are in the office.

Gone are the days where you could forbid employees to talk about their salaries. Income information is freely available, and your employees are constantly checking their earnings against those offered by the competition. Don’t kid yourself: If you aren’t paying a fair wage with good perks, your employees are probably already sending out their CVs.

Everybody wants to feel appreciated. Saying “thank you” may not seem like much, but it can make an enormous difference to an employee’s happiness. Some companies set up formal reward systems to recognise and encourage employees. But recognition doesn’t have to be formal to be effective. If it’s heartfelt and real, a little really can go a long way.

Is Venture Capital Right for your Business?

IS VENTURE CAPITAL RIGHT FOR YOUR BUSINESS?

One of the fun things about venture capital is you are constantly learning new ideas and strategies from one business and then applying them to others.

- Joe Lonsdale, Technology Entrepreneur and Investor

Few methods of finance in business cause as much confusion as “venture capital”. To most, it’s just money tech businesses get in return for a game changing idea. But the truth is it may be just the tool to help your business, regardless of what you do, how long you’ve been around or how many people you employ.  If you’ve ever watched Dragon’s Den, you’ve seen venture capital in action. Here’s our look at what venture capital is, and the surprising ways it could take you to the next level.

At its simplest, the term Venture Capital (VC) simply refers to capital that’s invested in any business or project where there’s an element of risk. Typically, this refers to innovative new companies, but it can also refer to money invested in everything from opening a new branch, to updating your factory or building a new wing on your restaurant. Every deal you see on Dragons Den is a venture capital deal.  It’s true that venture capitalists tend to invest in companies that look likely to disrupt big markets, and those with patentable ideas or innovative services. But VC funding is an option for all businesses. It’s usually offered in exchange for a minority stake in your business.

If you’re considering VC for your business, you need to understand the pros and cons.

Advantages of VC

  1. Show me the money        
    Venture capitalists can provide the funding necessary to either build your start-up from scratch or to expand your existing business. The cash can come in a single lumpsum payment or through additional funding rounds as needed.


  2. Learning curve      
    Because they’ve often had experience working with similar companies, venture capitalists can offer strategic and operational guidance to help your business thrive.



  3. It’s all about who you know       
    Most venture capitalists bring a valuable network of contacts. They can often assist with hiring key personnel, accessing international markets, connecting with strategic partners, and co-investing with other firms when you need more funding.

Disadvantages of VC

  1. It’s a control thing
    When you take money from a venture capitalist, you gain a new business partner, and you lose a portion of your ownership and control. Depending on the deal, this could mean you’re now working with someone whose methods are different to yours and who may want to take the company in a different direction.

  2. Pressure to sell     
    Venture capitalists usually earn their money when a company “exits”, either through a sale, or an Initial Public Offerings (IPO). It goes without saying that they can often have different goals and ideals to you, the business owner – especially if you want to own and run your own business indefinitely.

  3. Grow – or else       
    Venture capitalists may come with stringent requirements on growth: how fast they expect it to happen, and which targets they need to hit by certain dates. Depending on your contract, you may find the funding you expected is not released when the goals are missed.

VC has some large positives and can be a massive help to both new and existing business. However, it does also come with some large concessions. 

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