Vision Business Consulting
Vision Business Consulting

Resources

Resources2022-01-02T12:28:29+02:00

Frequently asked questions for Business Owners

Am I tax differently if I am the Director of more than one Business?2022-02-13T20:54:38+02:00

No, as an individual you are taxed on the income that you are earning from your companies. Companies are currently taxed at a flat rate of 28%, and individuals are taxed on a sliding scale based on their income.

If you only earn R5000. A month from 4 companies that is R20 000 a month, leaves your tax at approximately R 2449.17 a month, which is 12.24%
Your personal tax rate only reaches 28% when you reach an approximate income of R69 000 a month.
Your tax rate is only determined by your age and your taxable income, nothing else. You can be a director of 10 companies, it will have no impact on your tax rate.
Tax planning for small business owners is exceptionally important. By planning your taxes properly, it could help you save tax in the long run.
When do I need to register for VAT?2022-01-02T12:25:23+02:00

If your turnover (the value of your sales) exceeds R 1 000 000 in a period of 12 months you are compelled to register as a VAT Vendor.

You may, voluntary, register to become a VAT Vendor when your turnover exceeds R 50 000 in a 12 month period.

Medical Aid for Business Owners2022-01-02T12:22:35+02:00

Medical Aid is a big part of the budget of every South African Citizen.

Medical aid has certain tax benefits and can be structured in different ways for business owners.

Company payment
Depending on how you structure the income from your business, you can pay your medical aid contribution from your business account. In terms of a tax classification, this will be a fringe benefit that you will be taxed on. You will then be able to claim the tax credits as indicated below.

Own Payment
If you pay your medical aid from your own account, you will still be able to benefit from the tax credits below.

Medical aid tax deductions are divided into two parts. The first part is medical aid tax credits which is a fixed amount per month, per beneficiary on the medical aid. A further tax credit is then calculated based on your contribution and actual medical aid

In summary

The account from where the payment is made becomes irrelevant without proper tax planning. Small business owners are often in a position where they end up paying more tax than necessary due to a lack of proper tax planning and using tax planning tools to minimise their taxability to the benefit of the business and themselves.

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