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What is Section 12H Learnership Allowance?

What is Section 12H Learnership Allowance?

Section 12H Learnership Allowance was implemented to motivate employers to encourage skills development among their employees.

The amendments to Section 12H Learnership Allowance are effective from 1 October 2016 and applicable to all learnership agreements (an agreement registered with SETA (Skills Education Training Authorities) ) entered into on or after that date but before 1 April 2022.

It must be noted however that the old Section 12H Learnership Allowance criteria will apply to agreements entered into before 1 October 2016.

All examples listed below are based on the new amendments.

The amount payable in terms of the allowance has also been amended to take into account the learner’s qualification level.

The allowance is made up of both an annual allowance and a completion allowance.

The annual allowance is deductible in each year of assessment during which the learnership agreement is in force.

The employer will qualify for the annual allowance if –
  • during any year of assessment the learner is a party to a registered learnership agreement with the employer;
  • the learner holds an NQF-level qualification from 1 to 10;
  • the agreement was entered into pursuant to a trade carried on by that employer; and
  • the employer has derived “income” as defined in section 1(1) from that trade.
The allowance applies only to a period during which a learner is a party to a registered learnership agreement with an employer. Thus an employer will not qualify for the annual allowance during any period in which –
  • a learnership agreement is not registered; or
  • a learner is not in employment.

The annual allowance is a pro rata portion if the learner is a party to a registered learnership agreement for less than 12 full months during the year of assessment.  Apportionment will therefore apply if the learnership agreement commenced or ended partway through the year of assessment.

The completion allowance is a once off allowance available to an employer on completion of the learnership agreement in addition to the annual allowance.

For learnership agreements of less than 24 months, the completion allowance equals one full year’s annual allowance. For learnership agreements of 24 months or more it is multiplied by the number of completed years service.

The completion allowance is only available for contracts one year or longer and is calculated on completed years of service.

The employer will qualify for the completion allowance if –
  • during any year of assessment the learner is a party to a registered learnership agreement with the employer;
  • the learner holds an NQF-level qualification from 1 to 10;
  • the agreement was entered into pursuant to a trade carried on by the employer;
  • the learner successfully completed the learnership during the year of assessment; and
  • the employer derived “income” as defined in section 1(1) from that trade
There are conditions on how each of these allowances will be apportioned in respect of the period of the registered learnership agreements.
For instance:

A company whose financial year end is February and entered into a learnership agreement (NQF 1) for 16 months on 1 May 2019. The company will be entitled to the following allowances:

28 February 2020

  • Annual allowance of R33 333 ( R40 000 x 10/12)

28 February 2021

  • Annual allowance of R20 000 (R40 000 x 6/12)
  • Completion allowance of R40 000

A longer learnership agreement, say extending for 48 months with a completion allowance of R40 000 for every 12 months completed will result in a completion allowance of R160 000. (R40 000 x 4)

 

Below is a summary of the NQF criteria for learners:
 

Learners (non-disabled)

·           Annual allowance o   NQF level 1-6 – R40 000

o   NQF level 7-10 – R20 000

·           Completion allowance o    NQF level 1-6 – R40 000

o    NQF level 7-10 – R20 000

 

Learners (with disabilities)

 

·           Annual allowance o    NQF level 1-6 – R60 000

o    NQF level 7-10 -R50 000

·           Completion allowance o    NQF level 1-6 -R60 000

o    NQF level 7-10 -R50 000

An employer may not claim an annual or completion allowance if:

• The learner has previously failed to complete a registered learnership agreement within the same organisation; and
• The learnership agreement contains the same modules or material as the previous registered learnership.

 

Contact Tuffias Sandberg for more information on how the Section 12H Learnership Allowance can benefit your organisation.

VAT Taxpayers: New Relief on Correcting Tax Invoices

VAT Taxpayers: New Relief on Correcting Tax Invoices

Issuing accurate tax invoices is vital, but the reality is that now and then errors inevitably creep in.

It has always been possible to issue credit or debit notes to correct calculable errors. However, because the VAT Act prohibits the issuing of more than one tax invoice per taxable supply until recently, there was no way to correct other errors such as wrong names or VAT numbers.

Fortunately, that has now been remedied by a recent amendment to the Act. We set out the time limits and rules for correcting invoices, with a brief refresher on the legal requirements for tax invoices generally.

There has been an anomaly in VAT law which new legislation has now largely resolved.

The problem with the old position 

It has always been simple to correct calculable errors in tax invoices, such as price. A VAT debit or credit note would fix such mistakes. However, other errors such as an incorrect name or VAT number were legally insoluble. This is because the Act prohibits the issuing of more than one VAT invoice for a supply of a product or service. In terms of the law, a deduction for VAT is not allowed if there is an error (even a technical error) on the invoice.

The solution

An amendment to the VAT Act allows a corrected tax invoice to be issued. This needs to be done within twenty-one days after the customer has requested a correction.

In addition, the vendor must keep an audit trail of the correction in case of a SARS query.

What has also been welcomed is that there is no change to the date of the transaction, i.e. if the invoice was issued in January but corrected in February, the date the transaction is to be accounted for is still January.

Checklist for you:

It is also worth remembering the legal requirements of a VAT invoice. They are that the invoice must contain:

  • The words “Tax Invoice”, “VAT Invoice” or “Invoice.”
  • Name, address and VAT registration number of the supplier
  • Name, address and, where the recipient is a vendor, the recipient’s VAT registration number
  • Serial number and date of issue of invoice
  • Accurate description of goods and/or services (indicating where applicable that the goods are second-hand goods)
  • Quantity or volume of goods or services supplied.
  • Value of the supply, the amount of tax charged and the consideration of the supply (value and the tax).

Tuffias Sandberg offer best in class Tax advisory, contact us today for all your TAX needs.

Tuffias Sandberg Budget Commentary – 2019

Tuffias Sandberg Budget Commentary – 2019

The Minister of Finance, Tito Mboweni, delivered South Africa’s 2019 Budget speech to Parliament on 20 February 2019. In the 2019 Budget review tax amendments have been proposed, it is important to bear in mind that the enacting legislation in respect of these proposals will only be sent out for public comment later in the year.

Here are Tuffias Sandberg’s top budget highlights:

  • The government will collect R42.8 billion less in tax revenue than estimated in last year’s budget.
  • Growth expectations have been pulled back to 1.5% in 2019 (down from 1.7%).
  • The public sector wage bill will be reduced, the plans to achieve this:
    • Offer early retirement to civil servants nearing retirement age.
    • Members of Parliament and provincial legislatures and executives at public entities will not be receiving a salary increase this financial year.
    • Reduce the number of staff in diplomatic missions.
  • Despite the revenue shortfall, the budget has the lowest tax increase measures in five years. There is no increase in personal taxes, but the government will collect more money by not adjusting the tax tables to accommodate for inflation.
  • About 1.1 million young people have been employed under the tax incentive scheme. From 1 March 2019 employers will be able to claim the maximum value of R1 000 a month for employees earning up to R4 500 a month, up from R4 000. The incentive tapers off to zero once the employee earns R6 500 or more.
    There are no changes to the following:

    • Local interest exemption still R 23 800 for under 65’s and R 34 500 for over 65’s.
    • Tax-Free investment annual limit R 33 000.
    • Corporate tax rate – 28%.
    • Dividend Tax – 20%.
    • CGT inclusion rates: individuals – 40%, other entities – 80%.
    • Transfer duty table.
    • Estate Duty abatement is still R 3.5 million.
    • Donations tax – 20%.

Download your copy of our electronic tax 2019/2020 booklet here.

Should you have any queries contact us.

You and Budget 2018:  The New Tables

You and Budget 2018: The New Tables

For ease of reference we have uploaded the new tax tables below.

NEW INCOME TAX TABLES 2018/19 (INDIVIDUALS & SPECIAL TRUSTS)
Taxable Income Tax
 
R0 – R195,850 18% of taxable income
195,851 – 305,850 R35,253 + 26% of the amount above R195,850
305,851 – 423,300 R63,853 + 31% of the amount above R305,850
423,301 – 555,600 R100,263 + 36% of the amount above R423,300
555,601 – 708,310 R147,891 + 39% of the amount above R555,600
708,311 – 1,500,000 R207,448 + 41% of the amount above R708,310
1,500,001 and above R532,041 + 45% of the amount above R1,500,000
New rates apply from 1 March 2018. Trusts (other than special trusts) are taxed at 45%

 

NOTES 2018/19 CHANGES FROM LAST YEAR APPLICABLE DATES
       
VAT 15% Increases by 1% 1  April
Rebates
Persons under 65 R14,067 Increased by R432 1 March
Secondary (Persons over 65 and below 75) R21,780 Increased by R666 1 March
Tertiary (Persons 75 and older) R24,354 Increased by R747 1 March
Tax Thresholds
Persons under 65 R78,150 Increased by R2,400 1 March
Secondary (Persons over 65 and below 75) R121,000 Increased by R3,700 1 March
Tertiary (Persons 75 and older) R135,300 Increased by R4,150 1 March
Interest Exemption
Persons under 65 R23,800 No change N/A
Persons 65 and older R34,500 No change N/A
Dividends
 Dividends Tax 20% No change N/A
Medical Aid Tax Credits per beneficiary
First two beneficiaries R310 p.m. each Increased by R7 1 March
Third and more R209 p.m. each Increased by R5 1 March
Business Travel – Tax free
Up to 12,000 kilometres per annum R3.61 per km Increased by 6 cents per km. 1 March
Travel Allowance 
Travel allowance still taxable at 80% No change No change N/A
Logbook compulsory
Other Taxes
Capital Gains Tax – Individuals/Special Trusts* 18.00% No change N/A
Capital Gains Tax – Companies 22.4% No change N/A
Capital Gains Tax – Other Trusts 36.00% No change N/A
Fuel Levy Increases by 22 cents a litre 4 April
Cigarettes Increases by R1.22 per packet of 20 1 April
Wine (Unfortified) Increases by 23 cents a 750 ml bottle 1 April
Spirits Increases by R4.80 a 750 ml  bottle 1 April
Beer Increases by 15 cents a 340 ml bottle 1 April
Road Accident Fund Increases by 30 cents a litre 4 April
       
*= Represents the maximum effective  rate of Capital Gains Tax

 

SMALL BUSINESS CORPORATIONS – NEW TAX TABLE
Taxable Income New SBC Tax Rates Change vs Prior Year
   
R0 – R78,150 Nil Band raised by R2,400
R78,151 – 365,000 7% of taxable income over R78,150 Small tax decrease
R365,001 – R550,000 R20,080 + 21% over R365,000 Small tax decrease
Over R550,001 R58,930 + 28% over R550,000 Small tax decrease
   
Benefits to taxpayers are marginal
Rates apply 1 April 2018 to 31 March 2019

NOTE FOR ACCOUNTANTS: See SAICA’s “Budget 2018” webpage here for more documents (with tables in the PDF and Word documents in the “SAICA 2018 Budget Pack” section).


© DotNews

SMEs Beware:  POPI is Finally Becoming a Reality

SMEs Beware: POPI is Finally Becoming a Reality

The Protection of Personal Information Act (POPI) has been in the public domain for several years and has been enacted into law, but its enforcement provisions are not yet in effect. The appointment of a Regulator and the issuing of draft Regulations for public comment, however, indicate that the Act will probably come into effect in 2018.  The recent massive database leak may lead to a bit of fast-tracking here.

POPI will require that all personal information (IDs, health records, religion, employment records, sexual orientation etc) must remain confidential and organisations need to identify where this information is held and take steps to protect it.

Although there will be a twelve month grace period (from the date POPI’s enforcement provisions become effective) entities should not underestimate how much work is required to ensure compliance.

The growing trend of hacking of private information will make this task more onerous and additional costs may need to be incurred to ensure that adequate cybersecurity measures are in place.

Small and medium sized businesses (SMEs) will be under greater pressure as they do not have the resources of the larger corporates. 

What will you need to do?

You will have to –

  • Appoint an Information Officer (the person or entity responsible for the implementation and operations of POPI).
  • As a starting point, identify what personal information you hold and how it is processed, given to third parties, stored and destroyed.
  • Design, test and implement systems and procedures to ensure compliance with POPI.
  • Have policies in place to report any breaches of personal information.

Per the draft Regulations (comment has been called for so they could well change):

  • A manual (which is available to the public) setting out how the organisation complies with POPI must be drawn up. The manual needs to provide assurance that personal information will be adequately protected;
  • Measures and systems must be in place to respond to requests for access to personal information; and
  • Training sessions must be held for relevant stakeholders to ensure that there is an understanding of POPI and that the company’s systems are compliant.

Penalties for non-compliance are severe – a fine of up to R10m or ten years’ imprisonment.

Don’t forget also the potential cost of being sued by people or organisations whose personal information falls into unauthorised hands or is hacked whilst under your control.  Consider for example the possible claims arising from the recent South African database leak compromising the private data of 60 million people.  (As a side-note:  Check whether any of your email accounts have been compromised here – remember to check all your email addresses, personal as well as business, and seek advice immediately in any doubt.)

It will be critical therefore that you can demonstrate you have shown the necessary preparation and have put in place robust systems to protect personal information.

Start planning for POPI now – it will expose you to huge risk when it kicks in and forewarned really is forearmed!  

NOTE FOR ACCOUNTANTS:

  • For the POPI Act go to ActsOnline.
  • For the Draft Regulations go to the SAICA website.
  • For further reading see “Popi regulations: Implications for SA businesses” on Moneyweb.

© DotNews