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

  • RT  @Edge_Growth : In the words of our Executive Director (Jayesh Nair): "Supporting and developing #SMEs is one of the best ways to stimulat… 6 hours ago
  • RT  @TyronneNel : Full House tonight! #StartDbn Well done everyone for showing an interest https://t.co/PpKLd2iIAv 20 hours ago
  • RT  @TyronneNel : #StartDbn - “You can’t get good money from a bad VC” - Solid advice  @darlenemenzies  20 hours ago
  • RT  @TyronneNel : Looking forward to  @StartupGrindDBN  tonight! Expecting pearls of wisdom from  @justinclarke   @darlenemenzies  and  @aishapando … 20 hours ago
  • RT  @TyronneNel : Is the #Durban SME Ecosystem finally starting to rear it’s head? #StartDbn making a meaningful impact. https://t.co/d9EvDLf… 20 hours ago
  • RT  @TyronneNel : #SME Advice - Focus is probably the most important skill required by an entrepreneur, yet it is the most underrated! 1 day ago
  • - FAQ - Need help accessing finance for your small business? We did the research here: https://t.co/HzcDjiOiDz… https://t.co/uyoCgUumrk 1 day ago
  • RT  @TSiBA_Education : Are you a small entrepreneur, committed to grow your business but don't know where to start? The Annual TSiBA Accelera… 2 days ago
  • RT  @FMFSouthAfrica : 11/30 He could claim the shortfall from his gap cover policy, but, whereas previously gap cover benefits were unlimited… 2 days ago
  • - Taxable Awards - Do you reward your team for excellent performance results? Not only is it a great motivation, bu… https://t.co/LaURRQ5rEW 2 days ago
  • RT  @TyronneNel : #SME Advice - While many might question your logic, sometimes it’s important to pick a fight with authority, just to see ho… 2 days ago
  •  @kenb7   @Fin24  Do you have outstanding returns? Worried about prosecution? Read our Blog https://t.co/LKnbWpWXaw T… https://t.co/pYmZVGP5oO 3 days ago
  • RT  @so_innovate : Apply for the 2018 IV program https://t.co/ISzdFC23aD & get funding of up-to 30,000, access 2 further capital, global part… 3 days ago
  • - Monday Motivation - Up your determination and lets get through this week. #Phezulu #MondayMotivation… https://t.co/IvQ3pung2t 3 days ago
  •  @finfindeasy  This is going to be fun - I can't wait 3 days ago
  • RT  @ProcessMechanic : We have room for 50 players at the next #BizOlympiad pop-up. Only registered people will get an invitation. No busines… 4 days ago
  • RT  @finfindeasy : Entrepreneurs, don't miss out on #Durban FastTrack Event #Startupbootcamp https://t.co/dtVRk5z8X6 https://t.co/AunLKoJkBY 6 days ago
  • RT  @StimulusAfrica : The #CESAfrica 2018 training!An opportunity for creative entrepreneurs looking to turn their talent into a business. If… 6 days ago
  • On the go and needing an easy way to invoice your clients? Not only do we process your monthly books of account, we… https://t.co/HqdvzthQCB 6 days ago
  • -BUDGET SPEECH- Did you miss the Finance Ministers 2018 Budget Speech? Here's a quick summary of what was said ear… https://t.co/bvgWsOsOX8 1 week 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