Financial software: A guide to Turnover Tax on Micro Businesses
The South African Revenue Service (SARS) has devised a new tax option that could reduce the time and resources needed for small businesses to apply for tax returns. A survey performed by SARS indicates that many small businesses are overwhelmed by the extensive paperwork that must be submitted for tax returns throughout the year.
This new tax option, coupled with financial software, could save small business owners a large portion of administration costs. The new system is optional for businesses with an annual income lower than R1,000,000. It will dramatically reduce the average number of tax return forms that must be submitted from ten to three.
Small businesses that make use of financial software, such as those available from QuickBooks, can save time and money that would have been used to apply for tax returns. There are, however, a few factors that must be taken into consideration before opting to switch to the Turnover Tax on Micro Businesses tax category.
The pros and cons of switching to Turnover Tax
The new tax option for small businesses replaces all other taxes, including capital gains tax, Value Added Tax (VAT), income tax and Secondary Tax on Companies (STC). Small businesses therefore do not need to spend exorbitant amounts of money on hiring an accountant. Previously complex calculations can now be done by business owners with the help of financial software.
However, Turnover Tax is mostly beneficial to businesses that make a substantial profit. Since tax is charged on turnover rather than profit, businesses that are running at a loss still pay tax.
Moreover, once a business chooses the Turnover Tax option, it must remain in this category for a minimum of three years, unless it goes out of business or no longer qualifies.
Use QuickBooks’ financial software to see if you will benefit from Turnover Tax
Although Turnover Tax on Micro Businesses is a worthwhile choice for many small companies, it is vital to identify whether your business will benefit from making the switch. Financial software can help you to identify whether you are making enough profit for Turnover Tax to be a viable option for your company.
QuickBooks offers a selection of accounting and payroll systems that make it possible for a small business owner to make an educated decision to switch to Turnover Tax or to remain on the more complex tax option.
Choose from our range of financial software packages to save money on tax administration costs.
QuickBooks SimpleStart - for new and home based business
The simplest way to manage and track money going in and out of your business.
QuickBooks Pro - manage your business accounts simply and easily
Manage your business accounts simply and easily.
QuickBooks Premier - fast and easy advanced accounting
Fast and easy advanced accounting.
Quick Payroll is designed to meet the fast growing needs of dynamic South African SMEs.
It simply manages all aspects regarding payroll, including payroll calculations, leave registers, report writing, tax year-end, and more. Quick Payroll interfaces seamlessly with QuickBooks accounting software, which means your general ledger journals will automatically update.
Our solution automatically provides new tax law or statutory upgrades as they arise, keeping you on the payroll cutting edge. What is more, our Quick Payroll is so flexible; it can be used in any industry sector, injecting value into your company, employee and client relations across the board.
Quick Payroll Lite is designed to meet the fast growing needs of dynamic South African SMEs. It simply manages all aspects regarding payroll, including payroll calculations, leave registers, report writing, tax year-end, and more. Quick Payroll Lite interfaces seamlessly with QuickBooks accounting software, which means your general ledger journals will automatically update.
Our solution automatically provides new tax law or statutory upgrades as they arise, keeping you on the payroll cutting edge. What is more, our Quick Payroll Lite is so flexible; it can be used in any industry sector, injecting value into your company, employee and client relations across the board.
Quick Payroll Startup is designed to meet the fast growing needs of dynamic South African SMEs. It simply manages all aspects regarding payroll, including payroll calculations, leave registers, report writing, tax year-end, and more. Quick Payroll Startup interfaces seamlessly with QuickBooks accounting software, which means your general ledger journals will automatically update.
Our solution automatically provides new tax law or statutory upgrades as they arise, keeping you on the payroll cutting edge. What is more, our Quick Payroll Startup is so flexible; it can be used in any industry sector, injecting value into your company, employee and client relations across the board.
