Why Tax Planning Can’t Wait Until the Deadline
For many South African entrepreneurs, tax season feels like a scramble, but it doesn’t have to be. Small business tax planning is about foresight, not panic. By understanding your obligations early and taking advantage of legal deductions, you can avoid penalties and keep more of your profits where they belong: in your business.
At CTV, we work with SMEs across industries who want to take control of their tax strategy before SARS deadlines arrive.
Understanding Your Tax Obligations as an SME
1. Income Tax
All registered businesses are required to submit annual income tax returns. The current small business corporation (SBC) structure offers reduced tax rates, but only if you meet strict qualifying criteria.
2. VAT Registration
If your annual turnover exceeds R1 million, VAT registration is compulsory. But even smaller businesses can register voluntarily to claim input VAT on purchases, a smart move for growth-stage companies.
3. PAYE, UIF and SDL
If you employ staff, you must deduct and pay Pay-As-You-Earn (PAYE), Unemployment Insurance Fund (UIF) and Skills Development Levy (SDL) each month.
4. Provisional Tax
Most SMEs must pay provisional tax twice a year (August and February) based on projected earnings. Missing these payments can result in hefty interest and penalties.
Tax-Saving Opportunities You Shouldn’t Miss
Proper planning isn’t just about compliance, it’s about optimisation.
1. Claim Allowable Deductions
Expenses such as rent, utilities, professional fees, repairs, and depreciation can all be claimed, provided they’re directly related to generating income.
2. Invest in Assets Before Year-End
Purchasing equipment or vehicles before 28 February can qualify you for accelerated depreciation allowances.
3. Contribute to Retirement or Medical Funds
Owner-managers who contribute to approved retirement annuities or medical schemes may benefit from personal tax deductions.
4. Review Loan Accounts
If you’ve borrowed funds from your company, ensure shareholder loan accounts are structured correctly to avoid deemed-interest penalties.
How to Avoid Common SARS Pitfalls
- Late Submissions: SARS imposes automatic penalties for missed deadlines.
- Inaccurate Returns: Even small calculation errors can trigger an audit.
- Poor Record-Keeping: Keep source documents for at least five years.
- Mixing Personal and Business Finances: Maintain separate bank accounts to prevent SARS from disallowing expenses.
CTV’s Advice: Be Proactive, Not Reactive
Working with a qualified tax practitioner ensures your business remains compliant, but it also gives you the confidence to plan ahead. Our experts help small businesses design tax-efficient structures, manage cash flow, and prepare for SARS reviews before they happen.
Conclusion: Prepare Early, Save More
The end of the tax year is an opportunity, not an obstacle. Start planning now, not when SARS reminders start appearing in your inbox.
CTV’s tax professionals can help you review your finances, identify savings, and finalise your 2025 strategy. Schedule your consultation today and take control of your compliance future.
