Travel Allowance changes!!!

Deemed Kilometres Travel Allowance Going...

Currently, employees who travel 32 000 kilometres or more per year are allowed to claim a deduction against their travel allowance of up to 14 000 kilometres under the deemed business kilometres allowance, regardless of the actual business kilometres travelled.

The option to use the deemed kilometre allowance will fall away with effect from the commencement of the 2011 tax year (ie, March 1 2010).

A deduction against a travel allowance will, then, only be available to employees based on actual business kilometres travelled.

Taxpayers will therefore need to keep a logbook in order to claim for business travel.

Effective 01 March 2010, 80% (2009/2010: 60%) of travel allowance will be taxed monthly on the normal tax rate.

Acme Accountants will provide all our clients with a complimentary logbook and pen before 1 March 2010! For enquiries contact us.

SARS Offers Window Period

SARS Offers Window Period to Transfer Property to Individuals, Transfer Duty Free


Is your house in a Company, Close Corporation or Trust?

The Taxation Laws Amendment Act became operational on 30 September this year. One of the amendments applies to persons who own their residential home in a trust, close corporation or company and offers a window period in which the property can be transferred from the trust, close corporation or company to the individual without attracting liability for the usual taxes payable on such a transaction.

This means that no Transfer Duty, Capital Gains Tax (CGT) and/or Secondary Tax on Companies (STC) will be payable to SARS when the property is transferred to the individual in terms of this amendment.

This saving will be available if:

• you (or you and your spouse) are the holder/s of all the shares in the Company that owns the residential home; or,

• you (or you and your spouse) are the holder/s of all the member's interest in the Close Corporation that owns the residential home; or

• you (or you and your spouse) financed the purchase of the residential property in a Trust; and

• you (or you and your spouse) have always resided in the home and have used it for normal domestic purposes (and not merely as holiday house) since 11 February 2009; and

• you transfer ownership in the property into your name, or in both you and your spouse's names jointly before 31 December 2011.

Acme Accountants urges property owners to take advantage of this window period: "The concession offers property owners a welcome saving, especially in this challenging economic period."

Cipro - Annual Returns

Dear Client

CIPRO introduced annual returns on 1 September 2008 for closed corporations. This is to update details with CIPRO, with regards to company and financial information, on an annual basis. An annual return fee is also payable to CIPRO based on your turnover.


Also note that should we not submit your return in due course, deregistration by CIPRO will take place.

Please treat this matter with urgency!!


What is the purpose of an Annual Return?
In keeping with legislation, the Registrar of Close Corporations needs to determine whether a registered organisation is still in business and to confirm the Registrar is in possession of the latest information of the close corporation, each close corporation is compelled in terms of the Act to lodge an Annual Return once every year.

When do I need to lodge the close corporation’s Annual Return?
An Annual Return needs to be lodged within the anniversary month of its official incorporation up until the end of the month following its anniversary month.

What will happen if I fail to lodge the close corporation’s Annual Return?
Should a close corporation fail to lodge and pay for its Annual Returns for a period more than six months the Registrar may conclude that the close corporation is no longer conducting business and may refer it to be deregistered.

Budget Speech 2010/2011

Budget Highlights 2010/2011


Relief for Individuals


Personal Income Tax

Budget 2010 provides significant tax relief to individuals amounting to R6.5bn, which partially compensates for the effects of inflation (bracket creep).

This means that individuals younger than 65 years of age earning a total amount of–

• R80 000 will pay tax at an average rate of 5.2% on earnings and save R504;

• R250 000 will pay tax at an average rate of 17.6% on earnings and save R1 614;

• R750 000 will pay tax at an average rate of 30.6% on earnings and save R3 534.

The tax threshold for individuals younger than 65 will be R57 000 and for individuals 65 or older R88 528.

Increased exemption for interest and dividend income

• The annual exemption on interest earned for individuals younger than 65 years is raised from R21 000 to R22 300.

• The exemption for individuals 65 years and older increases from R30 000 to R32 000.

• The threshold for the tax-free portion of interest and dividends from foreign investment increases from R3 500 to R3 700.


Medical Expenses

From 1 March 2010 the tax deductible portion of monthly contributions to medical schemes is increased for each of the first two beneficiaries from R625 to R670 and for each additional beneficiary from R380 to R410.

Retrenchment Packages

The R30 000 exemption for termination of services has not been adjusted in many years. It is proposed that this exemption be merged into the retirement fund lump sum benefit system and that the qualifying lump sums be taxed by applying the tax table for retirement fund lump sum benefits. The aggregation principle will apply.





Other Tax Proposals Affecting Individuals


Standard income tax on individuals (SITE)

SITE was introduced in the late 1980s to limit the number of tax returns filed annually. Administrative modernisation and the fact that the tax threshold for taxpayers younger than 65 years is approaching R60 000 have eliminated the need for this system.

SITE is to be abolished from 1 March 2011.

Administrative relief measures will be considered for low-income taxpayers with multiple sources of income.

Limiting salary structuring

• The company car fringe benefit value is to be increased

• Deferred compensation and employer-provided group life insurance will be taxed as fringe benefits




Voluntary Disclosure Programme

In order for taxpayers to disclose their defaults (non-compliance) and regularise their tax affairs a voluntary disclosure programme will be implemented.

• The programme is to be effective during a window period from 1 November 2010 until 31 October 2011
• The full amount of tax remains due

• Relief with regard to interest and penalties will apply

• Relief is to be granted if–

º the disclosure is complete

º SARS was not aware of the default

º a penalty or additional tax would have been imposed had SARS discovered the default in the normal course of business.