A lot of people are currently starting companies at the moment due to job losses and seeking alternative income. Unfortunately, these business owners are never advised on what steps to take next i.t.o staying compliant at SARS and other state institutions. Below is a bit of a break down of what needs to be done and which returns need to be submitted.
The first thing you should do is open a bank account for the business. Without one, you will not be able to register for any tax types, or register on the central supplier database.
The company will be liable for tax from the day it is registered. After the end of each financial year, a set of financial statements will have to be compiled. These information on these financial statements will be used to submit the tax return of the company.
During the year, all companies have to submit 2 provisional tax returns based on the figures of the current financial year. The first one is 6 months into the year and the second 12 months. So for company with a February year end, it will be August and February.
As soon as one of your employees earn more than R6 918(for the 2021 financial year), you will have to register at SARS for employee tax. Or PAYE as it is known. You will have to deduct PAYE on a monthly basis from the employee and pay it over to SARS before the 7th of the following month. This also means that you will have to provide all employees who tax are deducted from with an IRP5 certificate on an annual basis.
Once a company has a turnover of more than R1 million for a 12month period, they have to register for VAT. There is also an option for companies to voluntarily register if their turnover is less. The VAT is then calculated every second month and paid over to SARS. A lot of customers and suppliers prefer to do business with companies who are VAT registered. You will also need to be VAT registered in order to apply for tenders or contracts.