Fill in your details below and one of our friendly consultants will call you back as soon as possible.
  • This field is for validation purposes and should be left unchanged.

Follow us on Twitter

  • #AwesomeAccounting - Always keep your eyes on your costs! Frugal businesses are profitable businesses. https://t.co/BuVzZ68fsK 3 hours ago
  • #FridayFun - What's the one thing you can't do without during your work day? #lovecoffee https://t.co/JZPYsR1Z8n 6 hours ago
  • RT  @ProcessMechanic : When start/started your business, did you take into account the sort of lifestyle you want to live alongside growing y… 16 hours ago
  • RT  @uctgsbsolutions : "The Solution Space Philippi hub is the first community hub to be established by UCT in its 178-year existence." - Pro… 1 day ago
  • #AwesomeAccounting - We're 20 days into #taxseason2017, read our blog ➡️https://t.co/ApsUOQDHU5 & get prepared 🤓 https://t.co/IliEeVuL7n 1 day ago
  • #ThursdayThoughts - There is only 1 way to get ahead in life - add an action component to your dreams! https://t.co/GBKze09hJR 1 day ago
  • RT  @Seedstars : Deadline EXTENDED: FinTech Startups can still submit an application for  @bbva  Open Talent 2017 till FRIDAY:#FinTech https://… 2 days ago
  • RT  @ABANAngels : Why African entrepreneurs need to think bigger  @GuardianNigeria  https://t.co/m8N5HPTKJu 2 days ago
  • RT  @TyronneNel : Have to agree,  @Phezulu_Group  is a focused #SME accounting solution- check them out https://t.co/ykjTbw2Lu4 2 days ago
  • #AwesomeAccounting - Affordable monthly business management & accounting services 4 SME's are not a myth -… https://t.co/uNjzCbaZje 2 days ago
  • #WednesdayWisdom - If it's important you'll make time to do it, if not you'll make excuses! So, what is it....... https://t.co/7Xtupl8W0k 2 days ago
  • #TuesdayTip - Remain curious, remain passionate - it's what creates a great #entrepreneur. https://t.co/hwxlALhbn0 3 days ago
  • RT  @HeadHonchoSA : INTERN WANTED 📣 Our  @6th_Ave_Group  fam are in need of an intern! If the requirements best describes you, drop them a mail… 4 days ago
  • #AwesomeAccounting - #entrepreneurs personal tax is linked 2 the companies they own, appoint somebody who understa… https://t.co/AiE2afYZFo 4 days ago
  • Well done  @Edge_Growth  a really positive development in your history https://t.co/CY04LsyIE2 4 days ago
  • #AwesomeAccounting - Didn't realise that affordable business management & accounting still existed? chat to… https://t.co/jRcJ6FT1t3 4 days ago
  • #MondayMotivation - For #entrepreneurs it's our passion that gets us up, but it's the coffee that keeps us going 😉 https://t.co/0J18wylYln 4 days ago
  • RT  @YALI_SAfrica : "Have an accountability partnership as an entrepreneur "  @AwethuProject  5 days ago
  •  @FMFSouthAfrica  Government's role is to improve efficiencies in the services it provides & then to reduce these ser… https://t.co/EEwFhv217B 5 days ago
  • RT  @FMFSouthAfrica : Rand: The government was set to protect man from criminals; the Constitution was written to protect man from government 5 days ago
 In Newsletters

Only the most optimistic among us would declare Budget 2017 a Small Business friendly budget!

There are however those who make the point that it could have been worse, so maybe we should celebrate none the less.

So, what are the positives?

  • VAT as many speculated, did not increase.
  • Company Taxes remained the same
  • R3,9 billion allocated for SMME’s and Cooperatives over the next 3 years

The negatives?

  • Limited bracket creep to take into account inflation
  • Dividend withholding tax increased to 20%
  • New super Tax bracket of 40% for those earning more than R1,5 million per annum
  • 30c per litre increase in Fuel levy
  • 9c per litre increase in Road Accident Fund levy

Despite the pro small business leaning of the budget speech, the clear facts are that business ownership for all entrepreneurs is going to carry more “penalties” than many might think the risks warrant!

So how can these penalties be mitigates? The best way, is to ensure your business qualifies as a small business corporation (SBC) as this still allows for a little breathing room from the new tax increases.

How, you may ask?

The table below illustrates the different outcomes on R1,5 million profit and shows that being an SBC is clearly the best option.

 

Income Type PAYE SBC Tax Co Tax Dividend Tax Total Paid
           
All Salary R533 625 0 0 0 R533 625
           
SBC Mix Sal / Tax / Div. R308 124 R59 098 0 R98 180 R465 402
Co. Mix Sal / Tax / Div. R308 124 0 R154 000 R79 200 R541 324
           
SBC All Dividend 0 R59 098 R266 000 R234 980 R560 078
Co. All Dividend 0 0 R420 000 R216 000 R636 000
           

At Phezulu VBO we do more than just assist clients with tax planning, we are your “one stop SME shop”, assisting with everything from Accounting, Business Management, BEE, Consulting, Company Registration to Payroll and Mentoring.

For more information, please visit our website or give us a call on 010 003 8558

Recommended Posts

Leave a Comment

Start typing and press Enter to search