Nwanda internal news (March)

1. Annual Tax and Legislation Update Seminar
We will be hosting our annual tax and legislation seminar on the 14th of May 2014 at St Andrews Schools for Girls. Please click here to book your seat.

2. Nwanda Incorporated’s Facebook Page. Go and have a look!
To all readers, like our Facebook page and if you are the 100th person you receive R250!


3. Awesome Reward
This Month’s awesome reward goes to: Vicky du Plessis and Denise Behenna.

4. School Visits
Thank you to Jeppe High School for Boys, Benoni High School and Sunward Park High School for inviting us to their Career Expo.

5. Action Cricket
Our cricket team: Sons of Pitches!  Make us proud.

Sons of Pitches

Proof required for Income Tax Returns: Individuals

BbFollowing the conclusion of the tax year on 28 February 2014 documents are issued to you that must be retained for tax purposes.

The following documents should, if applicable, be submitted to the accountant who completes your tax return and should be available if the South African Revenue Service (SARS) requests them:

1. IRP5 and IT3 certificates
IRP5 and IT3 certificates reflecting salary, annuities, pension and other income received.

2. Interest received – local and foreign
IT3 certificates reflecting the interest received for the year 1 March 2013 to 28 February 2014 relating to savings accounts, cheque accounts, fixed deposits and other investments.

3. Dividends received – local and foreign
Details and/or proof of dividends received.

4. Bequests and donations received
Details and/or proof of bequests and donations received.

5. Capital gain or loss
The following information is required:

  • Was the asset your residential property?
  • Return on the sale of the asset.
  • Base cost of the asset, i.e. the purchase price if purchased after 1 October 2001, or a capital gain valuation of the asset.

6. Other income
Details and/or proof of other income (e.g. partnership income).

7. Medical fund contributions

  • Medical fund contribution certificate.
  • Proof of payment of claims not covered by your medical fund and paid by yourself.

8. Annuity fund contributions
Annuity fund contribution certificates.

9. Travel allowance
If you wish to claim expenses against your travel allowance, the logbook for the tax year is required, together with the following information concerning the vehicle for which you received the travel allowance:

  • Make and model
  • Year of manufacture
  • Purchase price
  • Registration number
  • Kilometre reading on 1 March 2013
  • Kilometre reading on 28 February 2014

If you kept a record of travel costs incurred during the year, proof of the following is required:

  • Fuel and oil consumption
  • Repairs done
  • Insurance and licence fees
  • Lease/Installment agreement

10. Income protector
Contribution certificates.

11. Donations
Proof of deductible donations.

12. Other information
Details of any other action or event that may influence your tax liability.

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.

How does the new Employment Tax Incentive (ETI) work?

AaWhat is ETI?

ETI is a tax concession made to encourage employers to hire young people with no work experience. The employer may claim the ETI from the South African Revenue Service (SARS) by reducing the amount to be paid over in terms of PAYE by the total ETI calculated  on the basis of qualifying employees. This tax concession came into effect on 1 January 2014.

Who qualifies for ETI?

Employers who are registered for PAYE purposes and whose tax affairs are in order, are permitted to claim ETI. If an employer’s tax affairs are not in order ETI may still be claimed, subject to certain restrictions, as soon as the tax requirements are complied with.

Who does not qualify for ETI?

  • Employers who have been disqualified by the Minister of Finance due to their replacing existing workers or who do not comply with the regulations prescribed by the Minister.
  • Instances where the employee’s monthly remuneration :
    1. is less than the regulated remuneration, or R2 000 where remuneration is not regulated;
    2. would be less than R2 000 if the employee worked for only a portion of the month.

When may ETI be claimed?

Employers may claim ETI if they have workers in their employ who comply with the following requirements:

  • They must be in possession of a South African identity document.
  • They must be between 18 and 29 years old. (This age limit is not applicable if the employer’s fixed business address falls within a special economic zone or if the employer operates in an industry designated by the Minister of Finance.)
  • They must not be domestic workers.
  • They may not be family of the employer or be in any way connected to the employer.
  • They must earn at least the minimum wage or, should there be no required minimum wage, R2 000 per month.
  • Their earnings must be less than R6 000 per month (fringe benefits included).

Note: ETI may be claimed for a maximum of 24 months per qualifying employee.

How is ETI claimed?

An employer can claim by reducing the PAYE payable monthly, by the total ETI as calculated for each qualifying employee. This can be done by completing the ETI field on the monthly EMP201.

There is no limit on the number of qualifying employees that may be hired.

Note: Employers must be able to produce the identity documents of the employees that ETI is claimed for, if requested to do so by SARS.

How is ETI calculated?

Employers must carry out the following steps each month:

  • Identify all the qualifying employees for the month.
  • Determine the relevant claim period – first 12 months or second 12 months.
  • Determine each qualifying employee’s monthly remuneration.
  • Determine the amount of ETI for each qualifying employee.
  • Calculate the total ETI for the month.

The ETI is calculated as follows:

Monthly remuneration Year 1 – first 12 months

ETI for qualifying employees

Year 2 – second 12 months

ETI for qualifying employees

R0 – R2 000 50%  of monthly remuneration 25% of monthly remuneration
R2 001 – R4 000 R1 000 R500
R4 001 – <R6 000 Formula: R1000 – [0.5 x (monthly remuneration –
R4 000)]
Formula: R500 – [0.25 x (monthly remuneration – R4 000)]

If a worker was employed for only part of the month, calculations must be adjusted accordingly.

Note: If the value of the ETI is more than the PAYE liability of the entity for a specific month or if the employer is not able to claim for a specific month, the ETI is carried over to the next month.

What fines are applicable?

Fines will be imposed should, inter alia:

  • An employer claim ETI for an employee who does not qualify. The penalty will be equal to 100% of the ETI claimed and the employer will consequently face PAYE underpayment and penalties and interest.
  • An employer replace an employee with a qualifying employee. In such a case the employer could be fined R30 000.

The foregoing is only a limited summary for information. Consult your financial adviser for more details.

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.

Estate planning for young adults

CcIt is very important for you to plan your estate, which could include a living will, a last will and a living trust. This can help families prepare for difficult times when you are no longer around to assist or advise them. Our lives get busier and more complicated by the day, so estate planning for young and old becomes increasingly important. Young people should consider preparing certain estate planning documents, and in particular financial powers of attorney and living wills.

At the age of 18 a young man or woman officially becomes an adult in the eyes of the world. This means that you are entitled to make important financial, legal or health decisions about your lives. But what if something happens and you are unable to make these decisions at a critical time? Such situations can range from a small inconvenience to a life-threatening crisis, but if your estate is in order, it can speak on your behalf. Consider the following:

Financial power of attorney

A financial power of attorney allows you to appoint someone you trust, like another family member, to make financial decisions on your behalf. This document can be activated when you are incapacitated or right after it has been signed, and it will remain effective until you can resume charge of your own decisions again.

A financial durable power of attorney will allow the appointed person to handle important legal and financial matters on behalf of the grantor. In the case of a business or financial situation which involves the young adult, such as a passport or car registration renewal, it is convenient for the power of attorney to act on his/her behalf if they cannot tend to the problem. This arrangement may come in very handy when there is a legal situation which requires quick action and the young adult is unable to attend. Families with a disabled family member can also benefit from the security of a power of attorney.

Living will

A living will enables you to state specific medical wishes if you are alive, but unable to communicate them. Artificial life support in the case of a coma or terminal illness is an issue often discussed in such a document. Preferences regarding administering of pain medication, artificial nutrition and other treatments can be dictated in this document.

The Terry Shaivo case shows what can happen if this document is not in place. The legal battle between her husband, family and state of Florida lasted for years before she was granted her wish and taken off life support.

Health care power of attorney

With this type of power of attorney, you give someone else the power to make health decisions on your behalf. These decisions regarding serious health and emotional crises will be made based on instructions which you have given to your power of attorney beforehand. Sometimes a living will is combined with a health care power of attorney, because both of these can be revoked, i.e. it can be cancelled at any time by destroying it, communicating your wishes to your doctor, writing a letter regarding the cancellation or by creating a new living will and health care power of attorney, indicating that the new will revokes all the previous ones.

Start the conversation

Every family’s legal needs are different, so perhaps you should take the first step in being prepared for the worst. Remember that every time your family composition changes, like when a child is born, you need to adapt your will to include them. Start the process and be prepared.

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.