Tax year-end. There’s nothing quite like the sigh of relief when everything is submitted correctly and compliantly, but it’s the process of getting there that makes some businesses squirm. Here are top tips on preparing for tax year-end
- Get the facts for company tax
If your business pays provisional tax, make sure you reconcile all your expenses before February, when provisional tax season starts. As for company tax, ensure all the relevant bank, debtor, and creditor reconciliations are in.
Don’t forget about depreciation journals and interest in capital splits. Your accountant may deal with it, but it’s still important when calculating your monthly company or provisional tax.
In addition, be careful how you spend your money before tax season, as SARS is more likely to make full deductions on smaller expenses than big assets.
- Do your payroll reconciliation
Have accurate employee data ready to avoid missing SARS deadlines or submitting incorrect information.
Remember, SARS already knows from your IRP5s what your salary bills should look like before submitting. So, make sure data for salaries, contributions, bonuses, fringe benefits, and anything payroll-related is up to scratch.
- Stay proactive with PAYE and UIF data
Whether you use cloud-based payroll software or a manual system, it’s always best to finalize your data for Pay As You Earn (PAYE) reconciliation and workers’ compensation returns well ahead of time. Doing so will give you enough time to resolve any outstanding UIF returns and SARS amounts.
- Put on your VAT hat
Preparation is your ultimate secret weapon. You’ll want to start with bank reconciliation and work your way toward reconciling negative and old debtors and creditors statements.
Remember, if a debtor hasn’t paid you for 120 days or more, you still have to pay the VAT – even if they haven’t paid you yet.
Regarding creditors, it’s vital to collect statements and compare them to the balance in your accounting system to ensure you haven’t forgotten to capture anything.
Make sure you have your VAT, bank, debtor, and creditor reconciliation down to a T by the time tax year-end arrives
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