Share this Mister Wong Digg Del.icio.us Slashdot Furl Yahoo Technorati Newsvine Googlize this Blinklist Facebook Wikio Hear this text Print E-mail Tags tax ” changes travel employee sars information company schmikl submission retirement allowance contribution benefit employers addition numbers companies – means Taryne Eastwood

Keeping up with SARS changes

At the beginning of every year, as tax season approaches, SARS makes important changes to tax administration. Many companies are unaware of these changes, and many only adjust their own processes too late. “To benefit from the new SARS changes, companies should make sure they are prepared for the submission and informed about the process they need to follow,” says Karen Schmikl, tax legislation specialist at Softline VIP.

As a company whose business is making sure its clients’ payroll and HR systems are providing ultimate benefit to their businesses, VIP is always ahead of any changes to legislation and/or processes. Schmikl explains that this year’s tax submissions will require additional information. “Some of the mandatory fields for February 2010 are company related, and some are employee related,” she says. “Making use of a computerised payroll system will make it even simpler for companies to do the submission because the format of the files will be guaranteed to be correct and no manual process will then be required.”

The new information SARS will require includes company information such as SDL and UIF numbers and employer contact person and numberIn addition, employers can provide employee ID numbers or Passport number, income tax reference numbers and three addresses. This additional information will become mandatory from the next submission to SARS.

Taking effect from 1 March, the tax consequences of medical aid, retirement annuities and travel allowances are also changing. “The full company medical aid contribution is now taxable. However, the tax deductible deduction will include the ‘deemed’ employee contribution. This will result in a tax equal position for the employee,” says Schmikl. “In addition, the Income Act changed to include the employer contribution to a retirement annuity as a deemed deduction when calculating the tax deductible value. This means a larger benefit to the employee – and will especially be favoured by employers who structure retirement annuities into remuneration packages.”

She adds that the biggest talk has been around the travel allowance changes. “Although the act did not change that drastically, there seems to be a big panic among employers. Basically, the taxable value of the travel allowance increases from 60% to 80% as from 1 March 2010. In addition, the deeming provision against which one could claim travel expenses on assessment was removed – this means that all individuals who have a travel allowance will have to keep a logbook in order to prove their business expenses on assessment.”

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