Am sure you have been following developments of social unrest and tensions through the media particularly in the broader areas of Gauteng. Kindly be advised that IABC operations are sustained however been affected due to ongoing protest actions in the context that at times for safety reasons staff were advised to stay home for safety and security reasons. As a result we have sustained operations however not at the capacity that the company has set for itself and its client base as per company policy and value proposition. Kindly bear with us during this. It might happen that there may be no person at the office or telephone calls may be unmanned and unanswered, however we will ensure to the best of our abilities that core services are still delivered and disruption minimized so that compliance and business needs of our larger clientele base is not compromised. Managing Consultant.
Read MoreArchive for category Notice Board
The contents and information provided in this article are generalised and must not be acted upon as legal advice
“This article makes extensive reference to the study conducted and report written by Professor Marius Pretorius of Business Enterprises at University of Pretoria (Pty) Ltd (“the study”), undertaken for the CIPC, entitled “Business Rescue Status Quo Report”, issued and published on 30 March 2015.
A not so new landscape has been created by the New Companies Act presenting lucrative business opportunity not only for the legal fraternity but business and finance and accounting professions. Business rescue has for some time now been ignored under the misunderstanding that it’s a turf for the legal profession, but this is far from true as Business Rescue above all else requires key business and entrepreneurial skills in addition to Finance, Taxation and Legal skills.
Financially distressed companies in South Africa now have an opportunity can opt to reorganise and restructure through Chapter 6 of the amended Companies Act, No 71 of 2008. This has far-reaching effects on creditors, financial institutions, shareholders, employees and restructuring specialists.
Kindly note that Section 66 (1A) of the Close Corporations Act 69 of 1984 provides that the business rescue provisions of the Act apply equally to close corporations as they do to companies.
To fully determine what causes firms to enter into business rescue and how business rescue is initiated, it’s of fundamental importance to comprehend the terms and provision including key definition, as contained in chapter 6 of the Companies Act, No. 71 of 2008, amended.
The key TEST to determine whether an entity should enter is that of financial distress which the Act has defined under section 128(1)(f), subject to two (2) conditions below, as: “financially distressed, in reference to a particular company at any particular time, means that; (i) it appears to be reasonably unlikely that the company will be able to pay all of its debts as they become due and payable within the immediately ensuing six months; or (ii) it appears to be reasonably likely that the company will become insolvent within the immediately ensuing six months”.
It would then be safe to say for an entity to consider entering into Business Rescue (“BR”) the company must be “financially distressed”. This means that it is reasonably unlikely that the company will be able to pay its debts as they become due in the next 6 months, or, it is reasonably likely that the company will become insolvent in the next 6 months. If a company is financially distressed and the directors/members do not file for BR, they can attract personal liability, according Pat Pattinson.
The ultimate goal of business rescue is to reach a commercial and viable solution, culminating in the rescue of the company as well as maximising the likelihood of its continued existence on a solvent basis.
However the following conditions are also deemed to hold:
- Reasonable prospect: In a decision of the South Gauteng High Court, in the case of
Oakdene Square Properties (Pty) Ltd v Farm Bothasfontein (Kyalami) (Pty) Ltd 2012 JPR 0239 (GSJ), the court considered the plausibility of business rescue in an instance where liquidation was preferable. In this instance, the court dismissed the application for business rescue and held that a liquidation of the company would achieve a similar result to that of a business rescue. This judgment makes it clear that prior to a company, or an
affected person being placed in business rescue, consideration should be given to the nature of the company, the extent to which business rescue is the appropriate procedure for that company and the extent to which business rescue would be more beneficial for the company than liquidation. If the answer to the latter questions is in the affirmative, business rescue proceedings are likely to be successful. If not, liquidation may be the preferred alternative. The term reasonable prospect is further defined under key terms and phrases as well as introduction of the concept of;
- The company must not be insolvent in terms of the definition of insolvency under the Act and if its insolvent and proceedings have commenced or imminent for windup, BR should may only be considered if it results in a better return for the company’s creditors or shareholders than would result from the immediate liquidation of the company in line with Section 128(1b)iii = Better Return than in Liquidation (“BRiL”)
It is important to note that when referring to insolvency, the Act has two considerations for insolvency;
- Technical (factual) insolvency whereby the total liabilities of the entity exceeds the total assets and thereby reflecting negative equity;
- Commercial insolvency; whereby it appears reasonably unlikely that the company will be able to pay all of its debts as they become due and payable within the immediately ensuing six months, regardless of whether assets exceed assets.
The measure of solvency according to the Act refers to the second definition.
The test of reasonable prospect above entails that business rescue is meant for economically viable companies only, and that economically unviable companies entering the process, when allowed, is the cause of its high failure rate overseas, as well as locally.
Note that depending on circumstances surrounding the business rescue, in terms of how the BR proceeding are instituted, whether voluntary or by the courts (in favour of affected person), the Business Rescue Practitioner (“BRP”) will be appointed by either the company or by the court. However, further note that any BRP appointment has to be ratified by the court.”
Section 138 of the Act regulates the qualifications required for a business rescue practitioner. In order to qualify as a business rescue practitioner a person must be –
- a member in good standing of a legal, accounting or business management profession accredited by the CIPC (section 138(1)(a)); and
- be licensed as such by the CIPC (section 138(1)(b)).
From this it appears that a person must satisfy both the above requirements for appointment. But Regulation 126 of the Act states that a person who is part of an accredited profession need not be licensed by the CIPC (Regulation 126(2)). The CIPC has further indicated that it is, at least for the meantime, accrediting certain professions for the purposes of business rescue appointments and instead is appointing and licensing business rescue practitioners on an ad hoc basis in accordance with section 138 (1)(b).
Read MoreSource: http://www.engineeringnews.co.za/article/sars-revenue-collection-increases-by-63-yy-but-misses-treasury-target-2018-04-03
The South African Revenue Service (Sars) collected R1.216-trillion for the 2017/18 financial year, representing growth of R72.4-billion, or 6.3%, year-on-year.
This was, however, lower than the R1.217-trillion target set by the National Treasury during the 2018 Budget speech.
The main sources of revenue that contributed were personal income tax, value-added tax (VAT) and company income tax.
Finance Minister Nhlanhla Nene on Tuesday said the 2017/18 financial year had been characterised by distinct and clearly delineated growth patterns.
Until December 2017, revenue in aggregate grew by 6.2% year-on-year.
For the period from December 2017 to February 2018, revenue growth accelerated to between 9.5% and 15.5%, strengthening aggregated year-on-year growth to about 7.3%.
Nene attributed this to an improvement in business confidence to levels last seen in 2015, resulting in an improved profit outlook and provisional payments.
From the above article it is clear that SARS is struggling and in my opinion will push, going forward, more stringent compliance audits to try to mitigate shortfalls in collections.
Read MoreDear Customer,
The Minister of Finance announced an increase in Value Added Tax (VAT) from 14% to 15%, effective 01 April 2018. Our products and services are subject to VAT and therefore the increase in VAT will result in price adjustments.
The updated invoice amounts will be reflected on ALL of our invoices and quotations from 01 April 2018.
We value your continued support.
Should you have any further queries or require further information or clarification, please do not hesitate to contact me directly on email: secretarial@iabctraining.com or you can call us on: 011 312 9250 (Switchboard).
www.iabcgroup.com
A worthwhile read:
Never before have the fundamental assumptions about the US job market looked so precarious. Automation, artificial intelligence, and robotics, among other technologies, are changing the skills and the skill level required of employees in many industries, including retail, transportation, and manufacturing.
This is according to an article in AccountingToday
Amy Pitter writes that the accounting profession is experiencing similar changes, and the pace and pressure of that change is exploding into a major disruption. She says robotics is expected to eliminate 40 percent of basic accounting work by 2020. We’re in the early stages of the big data and artificial intelligence revolution in accounting, which already is being wholeheartedly embraced at the larger firms. “Blockchain, which may develop as the most significant disruptor of all, is only in its infancy. As blockchain gains traction, it promises to provide a viable replacement for the traditional third-party verifier of transactions, radically altering both the concept of audit and the role of auditors in ways that are only beginning to emerge”.
Pitter further writes:
These new technologies create a labour conundrum for the accounting industry. As routine work becomes commoditised, the traditional entry-level jobs are being eliminated. At the same time, there is an intense demand for accountants with more specialized and higher-level skills. But where are these accountants with knowledge of data analytics, cybertechnologies, critical thinking and great client skills going to come from? It’s hard to grow them organically with fewer entry-level jobs, and these higher-level skills are not necessarily being taught in college accounting programs.
The demand for data analysts and experts in the space where technology meets accounting is through the roof. Also, what we used to call “soft skills” are now being taken very seriously. Critical thinking, creativity, communications skills and the ability to be part of a team are skills that have become as integral to the job as debits and credits. One clear challenge for the academic community is to provide curricula that better mirror the reality in the industry – for new hires must embrace the evolving technology and also quickly become fluent in the new level of consultative services the technology will yield.
One thing that hasn’t changed is the human capital crunch in accounting, which has brought a profound culture shift in the profession. There was a time when staff at all levels were expected to be physically in the office nights and weekends during the “busy season.” Increasingly, a combination of enabling technology and employee expectations has turned those old ways on their ear, giving way to greater flexibility for employees – so long as they produce. Firms also are learning that Millennials are not a generation that wants to be seen and not heard. Indeed, they want to be consulted and see their ideas put into place.
This is just a high level summary, should you need detailed information kindly email our secretarial team on:
2018/2019 Tax Table
Rates of tax for individuals
Following the changes announced in the Budget Speech on 21 February 2018, the rates of tax outlined below will be effective 1 March 2018.
| Taxable Income (R) | Rates of tax (R) |
| 0 – 195 850 | 18% of taxable income |
| 195 851 – 305 850 | 35 253 + 26% of taxable income above 195 850 |
| 305 851 – 423 300 | 63 853 + 31% of taxable income above 305 850 |
| 423 301 – 555 600 | 100 263 + 36% of taxable income above 423 300 |
| 555 601 – 708 310 | 147 891 + 39% of taxable income above 555 600 |
| 708 311 – 1 500 000 | 207 448 + 41% of taxable income above 708 310 |
| 1 500 001 and above | 532 041 + 45% of taxable income above 1 500 000 |
Tax Rebates:
| Rebates | |
| Primary | R14 067 |
| Secondary (Persons 65 and older) | R7 713 |
| Tertiary (Persons 75 and older) | R2 574 |
Age Thresholds:
| Age | Tax Threshold |
| Below age 65 | R78 150 |
| Age 65 to below 75 | R121 000 |
| Age 75 and over | R135 300 |
Medical Aid Tax Credits:
| Medical Aid Tax Credits | |
| Main Member | R310 |
| First Dependent | R310 |
| Additional Dependents | R209 |
Subsistence Allowance:
| Subsistence Allowance (RSA) | |
| Meals and Incidentals | R416 |
| Incidentals Only | R128 |
Prescribed Rate Per Kilometre:
| Prescribed Rate Per Kilometre |
| Prescribed Rate Per Kilometre is R3.61 (2017/18: 3.55) |
Read More
This is just a high level summary, should you need detailed information kindly email our secretarial team on:
E: secretarial@iabctraining.com; T: 011 312 9250; web: www.iabcgroup.com
Read More
We are pleased to announce that Sage South Africa accredited IABC several years ago as an Approved Business Partner FOR product sales, implementation, support and training. IABC supports a wide range of Sage products including; Sage Evolution, Sage Partner & Xpress, Sage One Accounting & Payroll and Sage Partner Payroll & HR. IABC has since achieved Gold Re-seller status.
Feel free to contact us on E: sagepastel@iabctraining.com T: 011 312 9250; web: www.iabcgroup.com
Are your declarations and refunds in line with the Vat Act and Tax Administration Act? Its all nice when we get the refunds but there could be comebacks.
“South African Revenue Service (Sars) commissioner Tom Moyane has been accused of illegally authorising the payment of a R70 million VAT refund to a Gupta-linked company, Daily Maverick’s investigative unit Scorpio reports.
According to the report, Oakbay Investments director Ronica Ragavan emailed Moyane on May 22 last year requesting him to pay the first of three VAT payments amounting to R70 million into Terbium Financial Services’ account for the benefit of Oakbay.
The Guptas appointed Terbium as a payment agent to manage the payment of staff salaries after the country’s four major banks in 2016 severed ties with the controversial family accused of state capture and corruption.
The payment of the VAT refunds was reportedly despite objection from several Sars officials who warned Moyane and its chief officer of legal counsel Refiloe Mokoena that the law doesn’t permit the payment of VAT refunds into third party accounts to prevent fraud and money laundering.” – News24
M Kalaluka
Its that time of the year again, when we need to complete and submit income tax returns (ITR12) to Sars.
WHO SHOULD SUBMIT ITR12:
* If you are under the age of 65 and received an income of more than R59,750 from one or more sources or received more than R120,000 from a single source of employment, during the year of assessment 1 March 2011 to 29 February 2012;
* If you are aged between 65 and 75 and received an income of more than R93,150 from one or more sources or received more than R120,000 from a single source of employment, during the year of assessment 1 March 2011 to 29 February 2012;
* If you are over the age of 75 and received an income of more than R104,261 from one or more sources or received more than R120,000 from a single source of employment, during the year of assessment 1 March 2011 to 29 February 2012;
* If you:
– Conducted any trade in the Republic of South Africa (“Trade” is summed up as, including every profession, trade, business, calling, occupation or venture, including the letting of any property, but excluding any employment income.);
– Received an allowance such as travel, subsistence or office bearer allowance as per section 8(1)(a) of the Income Tax Act;
– Hold any funds or assets outside South Africa that a value of more than R50,000;
– Have a local capital gain/(loss) exceeding R20,000;
– Received any income or capital gain in a foreign currency;
– Held any rights in a controlled foreign company;
– Received an income tax return or you have been requested to submit ITR12 for the year in question.
METHODS OF SUBMISSION
There are various ways in which you can complete and submit your return;
1. eFiling: The most convenient and quickest way of completing and submitting tax (www.sarsefiling.co.za )
2. Branch: Filing electronically at a Sars branch (check www.sars.gov.za to locate a Sars branch nearest to you);
3. Post/ Drop box: Complete your return in writing and post yo Sars or drop it off in a Sars drop box.
DEADLINES FOR SUBMISSION AND PAYMENT OF TAX
* The deadline for all taxpayers who submit their tax return manually, by posting it or droping it off in a Sars drop box; is 28 September 2012;
* The deadline for all taxpayers who submit their tax returns electronically at a Sars branch; is 23 November 2012;
* Non-provisional tax payers who submit their returns via eFiling have until 23 November 2012;
* Provisional taxpayers who submit their returns via eFiling have until 31 January 2013.
If you should require further information or seek clarification, please call either Mr. Japhta Nkwana or Mr. M Kalaluka from our office on +27(0)11 312 3149 or email us: secretarial@iabcgroup.co.za
Read MoreWe are proud to announce that IABC is now an accredited Pastel Evolution Business Partner, Pastel Accounting Forum Member, Authorised Resellers, Certified Installation Technicians, Pastel Certified Trainer and Product Consultants/ Technicians for Pastel Accounting Products. We are also Authorised Resellers and Installation Technicians for Pastel Payroll Products.
IABC was also awarded “Approved Training Centre” status by Softline for all Pastel Accounting related training, although our intitial focus will be on “on-site” end user training with selected class room and college based training.
Read Moreiabc is an approved training partner for:
1. The Association of Chartered Certified Accountants (“ACCA”) – Silver Level Approved Employer – Trainee Development (in recognition of the support provided to ACCA students and affiliates working towards the ACCA professional scheme, Certified Accounting Technician (CAT) scheme or Diploma in Financial Management qualifications;
2. The Chartered Institute of Management Accountants (“CIMA”) – Approved CIMA Training Partner (in accordance with CIMA’s Quality Standards for the training of Chartered Management Accountants.
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2011 Message from the MC
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| The years 2009 and 2010 have been undoubtedly the toughest years for business both on the South African political and economic platform as well as internationally. Even the world cup event hosted right in our backyard was incapable of significantly mitigating the effects of the global economic meltdown.The above said, even as I would confirm at this point that several businesses both in the small/ medium and large segments have closed down (take a look at the financial distress/ receiverships & liquidations stats), an encouraging number of small businesses have survived. A few have even used the adverse economic climate to grow and excel to greater heights. Many professional argue that the survival of small/medium enterprises is due to the inherent advantage they hold arising from being owner managed and hence decision making is often very flexible and quick making them more responsive.
Whatever the case may be, I am particularly confident that the economic recovery that is already visible at this point will start filtering down into all sectors of the economy stimulating economic activity across all enterprises including small/ medium enterprises in the 2nd half of the year (2011) and we should start to see improvement in business and therefore wellbeing of most enterprises. I would like to urge all business to continue exercising discipline, managing costs, continue with marketing and sales efforts and being innovative in the adoption of business models that ensure efficient and yet effective ways of doing business. I may not be quoted, that said however, “for business that ensure survival until the 2nd part of 2011, these will most likely remain in operational existence for a relatively long time”. If there is a positive that has come out of this economic recession is that we all have been educated and re-educated around points of;
As earlier stated, from now on things can only get better so here is to wishing you a prosperous 2011. |
CIPC: Private Companies and Close Corporations Annual Returns:
This is an urgent message for members, directors and representatives of registered companies; Legislation was passed that makes submission of CIPC annual returns mandatory. If returns are not lodged and fees paid, your company will be de-registered (struck off) from the companies register at Cipro. The consequences of which are;
- You lose the legal status of your registered company;
- You might lose you business bank accounts;
- You will be unable to transact under the registered company particularly with financial institutions and other major players in the economy. You will be unable to access credit with any institution;
- You might be out of business altogether.
Should you require assistance with secretarial work, please contact Mr. Richard Ziko from our office on 011-312 3149.
Vat Returns Submissions:
Kindly be advised that Vat returns (Vat201s) for period 201108 (July 2011 & August 2011) were due and payable on 25 September 2011 and 30 September 2011 respectively and the returns (Vat201s) for period 201109 (August & September 2011) will be due and payable on 25 October 2011 for manual submissions and 25 October 2011 and 31 October 2011 respectively for electronic filers.
Please ensure that all submissions and payments are done on time to avoid interest charges and administrative penalties. Should you require assistance from our consultants, kindly provide our office with all the financial and transactional documents. You may contact our tax consultant, Mr. Richard Ziko on 011 – 312 3149 for further assistance.
Employee Taxes (PAYE, UIF & SDL) Returns Submissions:
Kindly be advised that the employee taxes returns (Emp201s) for period 201108 ( August 2011) were due and payable on 07 September 2011 and for period 201109 (September 2011) will be due and payable on 07 October 2011.
Please ensure that all submissions and payments are done on time to avoid interest charges and administrative penalties. Again, should you require assistance from our consultants, kindly provide our office with all the financial and transactional documents. You may contact our tax consultant, Mr. Richard Ziko on 011 – 312 3149 for further assistance.
Financial Year End (28 February 2012):
To all our contractual clients: Please note that we are yet again we will be coming yet to another financial year end. As a result, we will be doing a lot of clean up on our system databases in quarter 4 of the financial year in readiness for finalization of Trial Balances to 28 Fenruary 2012 to be used in the preparation of Annual Financial Statements and Annual Income Tax Computations. In these regard please bear with us and our consultants as we will be making numerous enquiries in order to close off any gaps that there may be in the system as well as to clear all suspense items so that we don’t have heavy reconciliation backlog towards ther end of the financial year (year end) . Please assist us in every way that you can.
To our non contractual clients, if you will need our assistance with annual financials, please note that we need full account of transactions accumulated during the course of the year as well a reliable set of financials for the previous year. You contact us either towards the end of February 2011 or in March 2011 to arrange for the preparation of your annual financial statements with us. You can speak to Mr. Siphiwe Nkovani of our office on 011 – 312 3149. Please note that effective year ends falling after 1 May 2011 (including the year ended 28 February 2012), companies will not be able to submit CIPC annual returns without preparing and submitting a full set of financial statements.
Dedicated Tax (Sars) and Secretarial (CIPC) Consultant:
To all our esteemed contractual and non contractual clients, please be advised that due to the fact that we are going into a very busy administration period for both Sars and Cipro requirements, particularly with a large part of the business community now registering private companies and those who had close coprorations (“CCs”) rushing to convert their CCs into private companies, IABC has appointed Mr. Richard Ziko to handle all CIPC and Sars related assistance requests and queries. He can be contacted directly on 011 – 312 3149.
Read MoreMain key indicators only – 2 December 2010: Source: Statsa (StatsOnline):
- CPI: December 2010 = 3,5% y/y;
- PPI: December 2010 = +5,8 y/y
- GDP: 3rd Quarter 2010 2,6% q/q
- Unemployment: 25,3% 3rd Quarter 2010
- Population (Census 2001): 44,8 million Night of October 9-10, 2001
- Population (Mid-year estimate): 49,99 million Mid 2010
Interest rate in week of 17-21 January 2011:
Latest Rates (source: liberta.co.za):
Prime * = 9.00%; Repo * = 5.50%; CPI * = 3.50%; PPI * = 5.80%; GDP * = 2.60% ;
The latest interest rate cut by the SARB brings interest rates down to the lowest level they’ve been in 28 years. The prime interest rate is currently touching a 28-year low, which was equaled briefly in April 2005. Before that the last time South Africa had interest rates lower than what we have now was in February 1981.