101.1 Unemployment Insurance Fund (UIF) Increase – Update Your Systems
The Minister of Labour announced, via Government Gazette on 26 September, that the UIF threshold had been raised from 1 October 2012. The ceiling amount goes from R149,736 per annum (or R12,478 per month) to R178,464 per annum (or R14,872 per month). The maximum monthly deduction for employees and employers increases to R148-72 from R124-78.
At the same time benefits paid to qualifying unemployed persons increase to a maximum of R5,651 per month from R4,732 per month.
This increasing of the UIF threshold has been ushered in with little publicity and gave taxpayers just one month to adjust their systems. The onus though is on you to update your payroll system to ensure deductions are correct, and that the right amount is paid over to SARS with your submission of the EMP201 form. Please ensure you do this to avoid paying unnecessary penalties and interest.
A recent survey of small businesses in the Eastern Cape by the Labour Department found more than two thirds were not registered for UIF. Whilst this almost certainly does not apply to you, it is the type of story which could lead to authorities auditing UIF deductions. So be prepared!
101.2 Your Business Address: CIPC Gets Tough
As you are aware, the CIPC (Companies and Intellectual Property Commission) replaced the old CIPRO with the introduction of the new Companies Act in 2011. The CIPC has issued a notice to companies and close corporations (CCs) requiring that postal and physical addresses “be of the actual physical premises” of the entity, i.e. “the site from where the business operates”. The practice of using “addresses of convenience”, such as your auditor, is no longer acceptable. Addresses are to be as follow:
- Street number
- Street name
- Postal code
- Postal number or description
- Postal code
If the address is outside South Africa the name of the country is to be shown.
Why is CIPC doing this?
CIPC are seeking to improve their “statistical records and data quality
What happens if I don’t follow CIPC’s laid down procedure?
Your submission will be rejected and you will have to redo it. This applies to all businesses – both new and existing.
Avoid the frustration of wasting time and effort.
101.3 Electronic Records Storage
On 1 October, the Commissioner of SARS released a Notice prescribing the format in which electronic records are to be kept.
In specifying the format for an “acceptable electronic form”, the Commissioner refers to the standard set out in the Electronic Communications and Transactions Act. The overriding factor is that the electronic document be presented or retained in its original form and thus cannot be altered.
In addition, you must be able to provide SARS with the electronic document so that SARS can access, read and analyse the electronic document. This means you must be able to email it to SARS and provide them with print copies.
Finally, the electronic records are to be available for inspection by SARS at a reasonable time and in a location in South Africa so that SARS can administer all tax Acts in terms of the Tax Administration Act.
What about Cloud storage?
We have seen that records have to be available for inspection at a location in South Africa. Thus, if your Cloud storage is outside of South Africa:
- You will need to get the permission of a senior SARS official,
- There must be a double tax agreement between South Africa and the country where your records are stored,
- You must be able to fulfil the requirements for electronic storage set out above, and
- If software or the platform used is not recognised in South Africa, then you need to keep manuals that document the method of record keeping and how to access the records. If you do not have this documentation, then you must compile a written list as per the requirements of the Commissioner’s Notice. This is quite an extensive list so if you plan to use the Cloud for storage outside the Republic, make sure that your service provider can meet the Commissioner’s requirements.
© DotNews, 2005-2012. This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.