If it is back to work for your manufacturing, supply or provision of essential services company, what exactly are your obligations in terms of the Occupation Health and Safety Act?

Employers must guarantee the safety of their workers in respect of updating their risk assessment, social distancing, health and safety regulations, symptom screening, sanitization, supply of masks and ventilation.

See Full Requirements

What is the impact of COVID-19 on UIF contributors?

Measures have been put in place to allow tax payment deferral and relief for small or medium sized businesses (under R50-million).

 

The UIF’s Easy-Ad Guide for Employers explains exactly what you need to know, what forms you need to complete and who to contact to access the 4 major benefits:

 

  • National disaster
  • Reduced work time
  • Illness
  • Dependents’ benefits in case of death
UIF’s Easy-Ad Guide for Employers

What relief can we expect from the Government?

The four ways Government is supporting companies through the COVID-19 pandemic are:

 

  • Deferral of taxes
  • Non repayable Grants
  • Government procurement, essential and critical goods
  • Loans at low interest and payment holidays

What taxes can be deferred and how?

Measures have been put in place to allow tax payment deferral and relief for small or medium sized businesses (under R50-million).

 

Three dispensations are in place:

 

  • Employment Tax Incentive (ETI) reimbursements programme
  • Delayed payment of PAYE
  • Delayed Payment of Provisional Tax

How is the Employment Tax incentive (ETI) reimbursement affected during lockdown?

The Government is expanding the ETI age eligibility criteria and the amount claimable in order to minimize job loss in this critical period. Eligible employees aged 18-65 and earning less than R6,500 per month are concerned. The measure is applicable for a limited period of four months, beginning 1 April 2020 and ending on 31 July 2020 for tax compliant employers registered with SARS as at 1 March 2020. The measure:

 

  • Increases the maximum amount of ETI claimable during this four-month period for employees eligible under the current ETI Act from R1,000 to R1,500 in the first qualifying twelve months and from R500 to R1,000 in the second twelve qualifying months.
  • Allows a monthly ETI claim in the amount of R500 during this four month period for employees from the ages of: 18 to 29 who are no longer eligible for the ETI as the employer has claimed ETI in respect of those employees for 24 months; and 30 to 65 who are not eligible for the ETI due to their age.
  • Pays employers their ETI reimbursements monthly during this period instead of twice a year.

What concessions are allowed for PAYE?

To alleviate possible cash flow burdens tax compliant small to medium sized businesses (annual turnover under R50-million) can benefit from special measures for a four-month period from 1 April 2020 to 31 July 2020 as follows:

 

  • Deferral of payment of 20 per cent of the PAYE liability without incurring SARS’ administrative penalties and interest for late payment.
  • The deferred PAYE liability must be paid to SARS in equal instalments over the six -month period commencing on 1 August 2020, i.e. the first payment must be made on 7 September 2020.

 

To benefit, the taxpayer must be compliant with regards to all taxes.

Example: XYZ Pty Ltd has a recurring monthly PAYE liability of R23,000.

 

The delayed PAYE payment relief is applicable for 4 months from 1 April 2020 to 31 July 2020.  It is calculated as follows:

 

R23,000 x 20% = R4,600 per month with a total of R18,400 over the 4 months.

 

The delayed PAYE liability will be payable in six instalments from1 August 2020, therefore declared on the EMP201 form submitted on or before 7 September 2020.

 

In our example XYZ will pay R23,000 + (R18,400/6) R 3,067 = R26,067 on the 7 September to SARS.

 

Simply, add the calculated monthly instalment to your current monthly liability.

Can payment of Provisional Tax be delayed?

Yes, SARS has provided a delayed provisional tax payment process that will be applicable for the 12 months beginning 1 April 2020 and ending on 31 March 2021 for small to medium sized businesses with an annual turnover not exceeding R50 million and provided that the beneficiary is tax compliant with regard to all taxes.  During this 12-month period SARS will not levy any interest nor penalties.

 

Relief Provided

 

In order to help alleviate cash flow burdens arising from the COVID-19 outbreak, the Government offers tax relief measures for tax compliant small to medium sized businesses (maximum annual turnover of R50-million), for a period of twelve months, beginning 1 April 2020 and ending on 31 March 2021. These include:  

 

  • Deferral of a portion of the payment of the first and second provisional tax liability to SARS, and waiving administrative penalties and interest for the late payment of the deferred amounts;
  • The first provisional tax payment due from 1 April 2020 to 30 September 2020 will be based on 15 percent of the estimated tax liability for the period;
  • The second provisional tax payment from 1 April 2020 to 31 March 2021 will be based on 65 percent of the estimated total tax liability.
  • Provisional taxpayers with deferred payments will be required to pay the full outstanding tax liability when making their third provisional tax payment payable within seven months after the tax yearend of the taxpayer, in order to avoid interest charges.
Example: XYZ Pty Ltd has an estimated income tax liability of R600,000 for the tax year ending 31 March 2021

 

The first delayed provisional tax payment will be calculated on
30 September 2020 as follows:

 

Tax Payable for 2020 estimated at                                            R600,000

First Provisional Payment Liability                                            R300,000

Payment required (15% of R300,000)                                        R45,000

Carried forward as temporary relief                                           R255,000

 

The second delayed provisional tax payment will be calculated on
31 March 2021 as follows:

 

Tax payable for 2020 estimated at                                            R600,000

First Provisional Payment (see above)                                       (R45,000)

Second Provisional Tax Payment                                               R555,000

Payment required (65% of R555,000)                                        R360,750

Carried forward (temporary relief)                                             R194,250

 

Third provisional tax payment due before 31 October 2021
(seven months after the tax year end)

The carried forward temporary relief amount                           R194,250

 

Please note:
No interest nor penalties will be levied using this deferred payment process.

Can Value Added Tax (VAT) payment be delayed?

No, there is no deferral on the payment of VAT. Vendors are required to pay VAT monthly/bimonthly in terms of normal rules.

 

The only exception is for businesses importing critical supplies into South Africa.  These companies will benefit from a full rebate of custom duties and exemption from VAT on critical supplies imported during the COVID-19 pandemic.

 

For further information:

www.sars.gov.za
www.itac.org.za

How can I get further information?

Should you require further information with regards to the Government’s tax relief programs please contact tax@wkwilton.co.za