South Africans and foreigners crossing our border (on arrival and departure) are now required to complete one more step before they travel: an online declaration to SARS covering goods, cash and other items in their possession. The system, which is already in place across South Africa’s air, land and sea borders, became compulsory from 1 July 2026 and is part of a broader push to digitise customs controls and tighten oversight at the border.

A flurry of conspiracies

Since the announcement, social media has been flooded with conspiracy theory videos alleging ulterior motives. But the documentation released by SARS reveals travellers need not fear: this new requirement is not an income-tax filing in disguise. The available guidance makes clear that it is a customs measure aimed at simply improving how travellers declare goods, currency and other regulated items when entering or leaving the country.

So, what’s really going on?

SARS says the online process replaces much of the old manual declaration system and is intended to make compliance easier, create a smoother traveller experience and strengthen risk management at ports of entry. In practice, that means customs officials receive information earlier and can respond before a traveller reaches the inspection point. The system asks travellers to submit their details before travel, including passport information, travel plans, contact details and the names of companions. Adults must also complete declarations for children or infants travelling with them. Once the form is submitted, the traveller receives an electronic confirmation by email. That confirmation must be kept on a mobile phone or printed out, and it contains instructions on what to do at the port of entry or departure. Travellers arriving in South Africa are directed through customs according to those instructions, while departing passengers may be told whether they need to report to customs before leaving.

When will it impact you?

For businesspeople and frequent travellers, the commercial significance lies in what must be declared. Ordinary personal belongings such as clothing, a phone or a laptop for personal use do not need to be listed. But goods above duty-free thresholds, items intended for resale or business use, and cash above the legal limits do. The guidance provided in the source material states that goods with a value up to R5 000 per person are duty-free, while goods above that level may trigger duty and VAT, with normal customs duty and VAT applying above R25 000. Cash above R100 000 must also be declared. The rules haven’t changed, the method of declaration has. A traveller returning with expensive goods, a businessperson carrying samples, or an entrepreneur moving stock across the border may all face duties, VAT or reporting obligations depending on what they are carrying. The online declaration gives SARS a digital record in advance and gives travellers a clearer process to follow.

Tried and tested

SARS says the system was first piloted at OR Tambo, Cape Town International and King Shaka airports in 2022 before being expanded nationally. The message to travellers is straightforward: border declarations have moved online, and failing to declare goods or giving false information could lead to delays, penalties or the seizure of goods. For anyone crossing South Africa’s borders, customs compliance is now a digital-first process.

We all read the brochures. Automation was going to offer us a future where laborious and repetitive tasks were all handled instantly without human intervention. Jobs that used to take weeks would now take hours. Businesses rushed to automate every task they could in search of this promised utopia of lower wage bills and greater efficiency. But now, just a few years later, retailers are reopening staffed tills, customer-service teams are restoring human support, and executives are rethinking whether every process should be handed to software. Is it time for your business to go back on automation? Here are the signs.

Customers keep asking for human help

One of the clearest warning signs is persistent demand for human help. According to HubSpot and SurveyMonkey, 53% of consumers actively dislike or hate AI in service interactions, and 82% would still prefer human support even if the outcome and waiting time were identical. Five9 separately found that 86% of consumers rate empathy and human connection as more important than speed. For businesses, that matters because automation often looks efficient internally while feeling obstructive externally. If customers repeatedly seek an employee after going through a bot, menu or self-service loop, the system may be reducing convenience rather than improving it.

Your conversion percentages have been falling

In some settings, the mere presence of a human fallback improves commercial outcomes. A Management Science study examining a credit union’s self-service loan-approval process found that inviting customers to connect with a human loan agent increased the uptake of approved loans by 24%. Crucially, very few customers actually used the option, they just liked having it there. The finding suggests that access to human support can reduce anxiety, improve trust and make customers more comfortable completing important decisions. For firms operating in finance, healthcare, education, legal services or any emotionally charged sector, full automation may damage performance even when the process appears technically sound.

Your staff spends their time rescuing broken journeys

Automation often fails by pushing complexity downstream to employees. Payments service Klarna became one of the most visible examples of that correction. After loudly promoting an AI assistant that handled large volumes of customer chats, the company later moved to bring more people back into customer service, because, as its spokesperson put it, AI brings speed while people bring empathy.

If you find your team members are constantly stepping in to correct chatbot confusion, soothe irritated customers or solve exceptions the system cannot handle, not only is automation not saving work, it’s ruining your relationship with your customers as well.

Shrinkage, theft or abandoned sales

Retail offers perhaps the clearest example of automation being scaled back for hard commercial reasons. NBC News reported that Dollar General eliminated self-checkout at about 12,000 stores, and Five Below removed it in some high-risk locations. The common thread was not nostalgia for staffed tills; it was concern over shrinkage, scanning errors, and difficult customer experiences. While your business might be saving on staffing, if it’s losing margin through mistakes, misuse, walkaways or required oversight, the costs are simply being reallocated.

Is your business better?

In routine, low-stakes tasks, automation can be enormously useful. But where trust, nuance or reassurance matter, evidence increasingly shows that businesses need visible human support. The companies rethinking automation simply recognise that efficiency only counts when it improves the customer experience and frees people up to do higher-value work. If it damages trust, degrades quality or creates hidden costs, it is not smart automation at all. Ultimately, the question to ask yourself is not whether a task can be automated, but whether the business improves after it is. It’s vital that after a move to automation, you keep a keen eye on the numbers. As your accountants, we can help.

Most business owners believe that their personal will has the business covered too, but that’s usually not the case. First things first, your valid, updated Last Will and Testament (i.e. your personal will) must clearly state your instructions regarding the distribution of your business assets in your estate, be they company shares, member interest, or 100% of a sole proprietorship. Without this, your business assets will be distributed under the rules of intestate succession.

But that’s not the end of the story…

Firstly, the actual transfer of ownership in a business, even as dictated in a valid, updated personal will, remains subject to the company’s structure and its governing documents. If the company’s Memorandum of Incorporation (“MOI”) or Shareholders’ Agreement includes specific rules for the transfer of shares upon death, these rules must be followed. Secondly, a “business will”, commonly called a shareholder’s agreement, a buy-and-sell agreement, or succession plan, is essential. It focuses specifically on the company’s success when you or other partners or shareholders are no longer there. It should answer questions like who steps in to run things, who is entitled to buy shares, and at what price. And it typically includes insurance to cover the costs of appointing key people and the agreed share sales price when the time comes.

Why you need one…

Having a properly structured (and regularly updated) business will is important because:

• It prevents operational paralysis when the owner is no longer there. Without a clear plan, bank accounts can be frozen, signing authorities revoked, and employees left stranded without leadership.
• It helps to prevent family and partner conflict by eliminating guesswork between grieving family members who inherit paper value and business partners who need operational control.
• It secures fair valuation and liquidity, working with funding mechanisms like life insurance to ensure your estate receives fair market value for your shares immediately, rather than forcing a fire sale.
• It protects your legacy by ensuring the core vision, values, and strategic direction you built are smoothly transitioned to chosen successors.

And why you need to update it regularly

Having an up-to-date business will keeps your business positioned to take advantage of changing tax legislation. A current example is the increased capital gains tax (CGT) exemption for small business owners aged 55 and older who sell their businesses. For many business owners, the sale of their business is their primary retirement asset. The increased CGT exemption means more business owners now qualify for meaningful tax relief when they exit. The exemption is determined on an asset-by-asset basis, and each asset must have been held continuously for at least five years before disposal.

A well-structured and continuously updated business will ensures your succession plan aligns with these conditions so that you and your estate can benefit from the relief available.

Types of business wills

• A shareholders’ agreement can impose conditions on the transfer of shares, often taking into account the interests of the remaining shareholders, such as restrictions and approvals on transfer, pre-emptive rights and forced buyouts. Please note that the shareholders’ agreement must comply with the Companies Act and be consistent with the company’s MOI.
• A buy-and-sell agreement is sometimes referred to as a “business will” because it allows business owners to govern the relationship between the respective shareholders and to outline who will take over their shares in the business and at what price in the event of their death or retirement.
• A succession plan is a strategic business process to ensure continuity by preparing contingency plans for when key people in critical roles leave, retire, or pass away. It’s a good idea to include “key man” insurance to cover the costs involved.

Protect your business and your family

To circumvent the problems created by cash shortfalls, business owners are also encouraged to have personal investments outside of the business. A retirement annuity may be a sensible option since its proceeds generally enjoy significant protection from creditors, although access to the funds is restricted and they should not be regarded as a source of immediate liquidity. A life policy specifically structured to cover business debts can also make a significant difference.

The key is to work with financial, tax and legal advisers who understand the full picture. A business will that is reviewed and updated regularly – particularly when tax legislation changes, business value shifts, or ownership structures evolve – ensures your plan remains implementable and your beneficiaries are not left with a document that no longer fits the reality of your business. The cost of professional advice is small compared to the cost of getting it wrong.

The time is now

National Wills Month is the ideal time to review whether your business is properly protected – and whether your existing plan is still fit-for-purpose. Our team is ready to review your estate planning, your personal will and your business succession and exit strategy. We will help you structure a plan that protects what you have built.

SARS offers a range of rebates, incentives and deductions that can significantly reduce the tax you need to pay, if you know where to look. The challenge is knowing which ones will apply to your situation this Tax Filing Season 2026 and how to claim them correctly.

We’ve put together handy (but by no means exhaustive) lists for individuals and businesses.

For individuals

• Thanks to rebates available to taxpayers, you only start paying tax when you earn more than R95,750 if you are under 65. The threshold jumps to R148,217 for those aged between 65 and 75, and R165,689 if you are 75 or older. These are automatic deductions that reduce the tax you pay before any other relief is applied.
• Medical scheme contribution tax credits provide R364 per month for you and another R364 for your first dependent, plus R246 per month for each additional dependent. For taxpayers under 65, an additional credit of 25% may be available where the combined total of medical aid contributions above four times the medical tax credit, plus qualifying out-of-pocket medical expenses, exceeds 7.5% of taxable income. Taxpayers 65 and older, and those with disabilities, qualify for a 33.3% credit on medical aid contributions that exceed three times the medical tax credit received plus additional out-of-pocket medical expenses.
• Interest from a South African source of up to R23,800 per annum is exempt from income tax when earned by any natural person under 65 years of age (R34,500 over 65) or a deceased estate.
• Retirement fund contributions to a registered pension, provident or retirement annuity fund are deductible up to 27.5% of the greater of your taxable income or remuneration, calculated as per the income tax rules and capped at R350,000 per year. This is one of the most powerful ways to lower your tax bill while building long-term savings.
• Tax-free savings accounts remain one of the simplest ways to build wealth tax-efficiently. All returns, including interest, dividends and capital gains, are 100% tax-free. The annual contribution limit for the 2026 tax year was R36,000, and the lifetime limit is R500,000.
• If you work from home and have a dedicated home-office area used for your trade, you may be able to deduct a portion of your rent, utilities, rates and wear-and-tear on office furniture or equipment on a pro-rata basis. The rules are specific, and there are potential downsides to claiming, so professional guidance is recommended.
• Donations to section 18A-approved organisations are deductible up to 10% of taxable income calculated in accordance with legislation. Any excess is carried forward to the following tax year.

For businesses

• Small Business Corporations (SBCs) benefit from tax relief including immediate write-off of new plant or machinery. SBCs also benefit from a wear-and-tear or accelerated allowance on other depreciable assets and a progressive tax rate that can deliver substantial savings for qualifying smaller businesses.
• Micro businesses (with a total annual turnover of R1 million or less) may qualify for a simplified turnover tax, that replaces the usual taxes payable by companies, such as income tax, provisional tax and Capital Gains Tax (CGT).
• Some manufacturing businesses may also enjoy specific accelerated depreciation allowances for manufacturing machinery and certain assets used in the production of renewable energy.
• Employers who register SETA learnership agreements qualify for additional tax deductions beyond the actual training cost. This is a great way of reducing taxable income while building skills.
• Qualifying research and development costs are 150% deductible, with accelerated depreciation on R&D machinery and capital assets.

Other deductions worth noting include the Urban Development Zone allowance, the Special Economic Zones incentive offering a reduced corporate tax rate of 15%, and a potential accelerated building allowance for new and unused buildings and improvements to a building at 10% of cost per year. Business owners older than 55 might also qualify for a capital gains exemption when selling a business.

Do you qualify?

These are just some of the rebates, deductions and incentives available. The difference between a good tax outcome and a great one often comes down to knowing which relief measures apply and how to claim them correctly. Our team stays on top of every change so you don’t have to. If you would like to ensure you and your business don’t pay more than necessary this tax season, please get in touch. We will review your situation, identify every relief measure available, and make sure you do not pay a cent more tax than you should.

In South Africa, business compliance obligations are enforced by several different government bodies, each responsible for a different section of business oversight, and each with its own systems and requirements. Compliance is a strategic business priority today, not only because it is essential to business success, but also because it is ongoing, extremely expensive, and increasingly complex.

Compliance is essential

Non-compliance with business regulations can trigger financial penalties, audits, being flagged as non-compliant by CIPC, rejected funding applications, and missed commercial opportunities. Unpaid tax debt can be collected by SARS directly from a company’s bank account or another third party, like a client. Deregistration at CIPC means the company loses legal standing to contract, and this can result in, for example, the company’s bank account being closed by the financial institution. 

Compliance is ongoing

Compliance isn’t a once-off exercise. It’s an ongoing responsibility that evolves as your business starts interacting with banks, funders, clients, and regulators, employs staff, and generates more revenue. Local businesses are subject to ever more regulatory obligations that are not only increasingly complex but also constantly changing, demanding ever more human and financial resources.

Compliance is so expensive

Compliance costs are substantial in South Africa, roughly three to five times higher than in similar countries, according to the Free Market Foundation. “Across an estimated 150,000 SMEs, the aggregate cost of compliance is estimated at R270 – 450 billion annually, equating to roughly 4 – 6% of GDP.” The report continues: “For a medium-sized enterprise, direct compliance expenditures, including internal compliance staff, external advisors, licencing and filing fees, and reporting systems, range from R1.4 million to R3 million per year. When indirect costs (diversion of management time, lost strategic opportunities, risk mitigation activities) are included, the total annual burden may easily double.”

Compliance is for every business

For almost all businesses, essential compliance includes at the very least the requirements of the Companies and Intellectual Property Commission (CIPC), the South African Revenue Service (SARS) and the Department of Employment and Labour (DEL)

CIPC compliance: Annual returns and Beneficial Owner Registers

• Registration: CIPC registers and maintains records of private companies (Pty Ltds) and close corporations (CCs) in South Africa.
• Legal standing: CIPC compliance gives your business a legal registration number, recognition as a juristic person, the standing to contract with clients and institutions, and the ability to open a business bank account.
• Annual returns: Every registered company must submit annual returns (and other documents) to CIPC within 30 business days of its registration anniversary to confirm the business is active and to disclose annual turnover. Beneficial Owner Registers must also be filed annually or when beneficial ownership changes occur.

Consequences of non-compliance include late filing penalties, being marked as a non-compliant company, and – after two consecutive years of non-submission – possible deregistration. Deregistration can invalidate contracts and result in bank accounts being frozen.

SARS: Tax compliance

• Income tax: Companies are automatically registered for income tax when incorporated with CIPC, but compliance still requires submitting income tax returns annually, as well as provisional tax returns twice a year where applicable, while keeping accurate financial records and paying tax liabilities on time.
• Employee taxes: From the day your first employee starts, employee income tax (PAYE), Unemployment Insurance Fund contributions (UIF), and the Skills Development Levy (SDL) must be declared and paid monthly via the EMP201 return.
• VAT: VAT registration is mandatory once annual taxable supplies exceed R2.3 million in any 12-month period. Voluntary registration is allowed when taxable supplies exceed R120,000. VAT compliance typically means bi-monthly or monthly VAT201 submissions, accurate invoicing and strict record-keeping.

Tax non-compliance is one of the most common reasons businesses run into penalties, audits, or rejected funding applications, because many tenders, credit applications, and commercial contracts require proof of tax compliance in the form of a SARS TCS (Tax Compliance Status) PIN (Personal Identification Number).

DEL: Labour law compliance

• Written employment contracts and policies aligned with the Basic Conditions of Employment Act (BCEA), the Labour Relations Act (LRA), the National Minimum Wage Act (NMW) and any applicable sectoral determinations are critical.
• UIF registration is mandatory within 21 days after appointing the first employee who works at least 24 hours a month, using the DEL’s uFiling portal.
• The COIDA (Compensation for Occupational Injuries and Diseases Act) requires registration with the Compensation Fund to provide workplace injury compensation. Businesses must submit an annual Return of Earnings (ROE) to the DEL, declaring employees’ earnings, even in years with no incidents, to keep the crucial Letter of Good Standing valid.

Labour law non-compliance is a common cause of audits, inspections, and penalties. In addition, missing a ROE submission can delay the company’s Letter of Good Standing, holding up tender participation, contracts, and even site access.

Compliance as a strategic strength

Compliance can be a strategic strength. Proactively managed compliance protects organisations from risk, improves access to funding, maintains eligibility for opportunities and partnerships, and enables your business to thrive responsibly. We can assist you in all company compliance matters. Our expertise and years of experience will not only unlock all these benefits for you but will also save your company a great deal of time, hassle, and costs – now and in the long run.

From communication channels, to shared workspaces, AI chatbots and design services, companies are aware that they are paying more for monthly subscriptions than ever before. Research, however, suggests that most firms have no idea how deep the problem goes. The Zylo 2026 SaaS (Software as a Service) Management Index reported that the average large organisation manages 305 separate software applications. Forty-six percent of those licences sit unused at any given time, representing approximately $19.8 million in wasted annual expenditure for the average enterprise. And it’s not just a problem affecting larger businesses. According to the report, the average British SME is estimated to waste as much as R250 000 a year on software that isn’t being actively used. These figures reflect more than careless purchasing decisions. They are a predictable consequence of how cloud software is designed to be sold, distributed, and renewed. SaaS vendors have built their distribution models around frictionless adoption and auto-renewals. For organisations that lack formal governance over their software portfolios, this dynamic produces a cost base that grows by default, irrespective of whether the tools in question are delivering measurable business value.

Why oversight fails

The central driver of SaaS creep is decentralisation. Over the past decade, purchasing authority for software has migrated steadily away from IT and finance functions and towards individual business units. The Zylo 2026 SaaS Management Index found that business units now control 81% of total SaaS spend, while IT departments directly manage just 15%. In a small business, where procurement processes are typically informal and financial controls on software purchasing are loosely enforced, this dynamic is even more pronounced. In short, no single department maintains visibility across the full portfolio. The Marketing team acquires its own tools, Operations purchases its own platforms, and individual team members subscribe to productivity applications on corporate expense accounts. According to Productiv, approximately 48% of enterprise applications are effectively unmanaged, meaning no one in the organisation is tracking renewal dates or monitoring active usage. Each purchasing decision is locally rational. But collectively, they produce a software stack which is almost impossible to fully understand, manage or audit.

The renewal mechanism

Automatic renewals compound the problem. SaaS vendors have no interest in identifying underutilised licences ahead of renewal as exercising the contractual right to reduce or cancel rests entirely with the buyer.

Are there solutions?

The only way of making sure you don’t become a victim of SaaS creep, is to take control of the issue and focus on visibility, ownership, and timing. Complete visibility means knowing every active subscription in the portfolio: what it costs, who authorised it, and whether it’s being used. As your accountants, we can help you conduct a full audit of subscriptions, and put together a list of just what’s being deducted and for which service. Once you know what you are subscribed to, you can decide what to keep and which to cull. Following on from this, it’s vital to assign someone from each team to oversee subscriptions. This person needs to make the ultimate purchasing decisions, and must maintain a complete list of subscribed services. This way, subscriptions can become an element of employee onboarding and offboarding, ensuring nothing gets lost in the system and invisible renewal costs don’t pile up in the background.

The final word

SaaS creep is, at its root, an organisational design problem. It emerges predictably wherever purchases are not carefully monitored, and where auto-renewal clauses allow costs to persist beyond the point of value. For you as a business leader, the takeaway is simple: software spend requires the same disciplined oversight as any other cost.

Bad decisions are a near-universal leadership experience. A 2023 study of more than 14,000 employees and business leaders across 17 countries, commissioned by Oracle, found that 85 percent of business leaders have suffered from what the researchers called “decision distress” (regretting, feeling guilty about, or actively questioning a decision made) in the past year. The same study found that 72 percent of business leaders admitted they had, at some point, given up on making a decision altogether because the available data felt overwhelming. Decision-making, in other words, is hard for everyone. What separates leaders who recover and grow from those who stall is not the absence of bad calls. It is the quality of their response.

Own it before it owns you

The most consistent thread running through research on leadership recovery is the importance of accountability. The instinct to go quiet or minimise the impact when a decision backfires is understandable, but it can also be expensive. Once an error is noticed, credibility is far harder to restore than it would have been had the leader simply spoken plainly from the outset. The fastest route to rebuilding trust is not spin, but ownership.

Diagnose the root, not just the symptom

The second step, and one that leaders under pressure are most tempted to skip, is genuinely understanding why the decision went wrong. Surface-level post-mortems, such as “we moved too fast”, or “we didn’t have enough data” only produce surface-level corrections. Durable improvement requires tracing the failure back to its actual structural cause. Was it a flawed decision-making process? Groupthink? A blind spot about the customer? Or an incentive structure that rewarded the wrong behaviour? Denis Liam Murphy, leadership consultant and author of The Blame Game, argues that leaders need to develop what he calls “real-time hindsight”, the discipline of reflecting immediately and honestly on what a decision revealed, rather than waiting for a formal review cycle.

The Schultz playbook: Structural recovery at scale

When Schultz returned to Starbucks as CEO in January 2008, he inherited the consequences of decisions made during a period of aggressive over-expansion. The company’s stock had declined approximately 70 percent from its 2006 peak, and 600 stores were closed across 2008 and 2009. As a Harvard Business School case study on the turnaround later documented, Starbucks had drifted from the core identity that had made it successful: the experience, the craft, and the culture. Schultz’s recovery was not built on a single dramatic gesture. It was built on a systematic return to first principles: closing 7,100 US stores for a single afternoon in February 2008 to retrain baristas, investing in the quality of the product, and making a deliberate, public commitment to slowing down in order to grow sustainably. The recovery that followed became a business school case study not because the error was unusual, but because the response to it was disciplined, transparent, and impactful in a way that resonated with the customer base.

Build the lesson into the system

The next step in the process is to build the mechanisms which help prevent mistakes from going too far into the system. This means creating what practitioners sometimes call a “failure loop”, a deliberate process for reviewing decisions, documenting what was learned, and feeding those lessons back into future decision-making frameworks. The practical application for any business is straightforward: after a significant misstep, write down what happened and what should have been done differently. Share it with the team. Make the lesson available to the organisation, not just the person who made the call.

Resilience is not indifference

All this advice comes with a warning. Once making errors becomes consigned to a system, it opens up the possibility of leaders accepting errors as common, processing them efficiently and therefore, becoming indifferent to their impacts. On the surface this can look like emotional stoicism, but that is neither realistic nor effective. Obviously, mistakes should be avoided at all costs. Murphy’s research points to three foundations of genuine leadership resilience: psychology, self-care, and a support network. The first is the capacity to frame struggle as information rather than verdict. The second is giving yourself the actual time and space to recover. The third is having people around you who will tell you the truth.

None of that is soft advice. The studies show that a leader who burns through a failure without adequately processing it is actually more likely to repeat it. The goal is not to feel nothing, but to feel clearly, learn quickly, and move with intention.

For many taxpayers, it feels as if you’re making income tax payments all the time.

It’s not far from the truth because, in South Africa, provisional taxpayers make two compulsory payments (and possibly a third voluntary payment) each year. And that’s even before the annual income tax deadline in January of the following year, when any further tax liability will become due. As a result, there are numerous deadlines that overlap across tax years. Yes: it is confusing, as the table below illustrates. But there’s no point throwing your arms up in the air: provisional tax non-compliance is met with some of the harshest penalties imposed by SARS.

Provisional and income tax timelines

Who are ‘provisional taxpayers’?

• All companies except those specifically excluded
• Any person who earns income which is not remuneration, an allowance or advance or who earns remuneration from an employer not registered for employees’ tax except those specifically excluded
• A labour broker with an exemption certificate
• Any person notified by the Commissioner of SARS

Why must provisional tax be paid?

Provisional tax payments are like instalments on taxpayers’ annual income tax, paid in advance and spread over two or three payments during the year. These payments are deducted against any tax owing after the year’s final income tax return is filed – at which point any further tax liability will then become due. The objective is to prevent taxpayers from facing large income tax liabilities that are only revealed at the end of the year of assessment. 

How is provisional tax declared and paid?

• Provisional tax payments are calculated on estimated taxable income, including current taxable capital gains, for that particular year of assessment.
• The estimates, says SARS, must be determined sensibly and by careful reasoning and judgment, in a mathematical manner, and using experience, common sense and all available information.
• The first period estimate is forward-looking, requiring companies to estimate their taxable income for the year ahead and then to pay tax on this estimate in advance.
• In contrast, the second period provisional return is retrospective, since by the year-end there is more certainty regarding the income for the year, and the tax due thereon.
• These estimates of taxable income are submitted to SARS on an IRP6 return, which must be submitted by all provisional taxpayers for the first and second periods.
• Even if you or your company owes no tax, a ‘nil’ return showing taxable income is equal to zero must still be filed on time.
• If an IRP6 is filed more than four months after the deadline, SARS considers a ‘nil’ return to have been submitted, and unless the actual taxable income is really zero, this will result in penalties.
• Accurate records of all the calculations and source documents used must be kept as SARS can ask for the estimate to be justified and, if dissatisfied with the amount, increase the estimate.

Do call on our professional assistance

All taxpayers are ultimately responsible for their tax affairs, even though provisional tax is particularly daunting and confusing, with so many overlapping deadlines, complex requirements and harsh penalties.

Expert tax advice is highly recommended to ensure compliance with the requirements and the filing and payment deadlines. You know who to call.

When starting a small business, it’s easy to assume you don’t have all the knowledge you need to compete, and that the big, successful corporation next door holds all the keys to success. With their polished org charts, complex strategy documents, and fleets of middle managers, big corporations and their strategies can look like growth to the beginner. This is a mistake. The truth is, big companies operate within a completely different set of constraints and economies to smaller, founder-run businesses. Understanding which big business strategies could hurt if implemented in your business, is therefore a key to survival.

Hiring for the org chart, not the work

Large corporations often hire ahead of demand. They build out departments, create roles to fill future needs, and staff up in anticipation of growth. They can afford to carry headcount. Smaller businesses cannot. Many small business owners get caught up in the excitement of expansion, and start hiring to look like a bigger company, or in anticipation of future problems, rather than to solve a specific current issue. They add a layer of management before there’s anything to manage, or recruit a marketing team before they’ve validated what their customers actually want. The result is a payroll that grows faster than revenue, and a business that starts to take strain under the weight of salaries it was never ready to carry. As a new business, it is essential that each hire adds immediate value to the company and can justify their pay cheque from day one. If you are unsure what someone will do in their first 90 days, this is probably a hire you don’t need. 

Complexity for the sake of it

Big companies love processes and reporting structures. Everything from ordering printer paper to launching a new product needs multiple meetings, committee sign-offs, and documented procedures. Some of this is necessary when you’re coordinating thousands of people across continents… But for a small team, your biggest advantage is agility. Small businesses thrive on speed and flexibility. Your ability to make a decision at 9am and implement it by lunchtime is a genuine competitive edge over a corporate rival that needs a risk assessment before it can switch toilet paper suppliers. The moment you start building bureaucracy into your own operation (think overly formal sign-off chains, or meetings about meetings) you are denting the very quality that makes you competitive.

Spending unnecessarily on brand before earning the right

A classic mistake many growing startups make, is one that’s also obvious to any experienced business owner the second they walk into the offices. The expensive logo on frosted glass, the branded hoodies, and the slick website are all in evidence – but the pipeline runs thin and the cash flow statement speaks of desperation. Big companies invest heavily in brand because they have proven revenue streams and established customer relationships. Brand maintenance is a legitimate line item at that scale. For a small business still finding its feet, over-investing in brand before you have a viable business is putting the cart firmly before the horse. Customers care more about whether you solve their problem better than anyone else than they do about your brand. Earn that reputation first. The brand follows from the substance, not the other way around.

Chasing revenue while ignoring cash

Publicly listed companies are accountable to shareholders who want to see top-line revenue growth. That pressure filters through to every level of a large organisation and shapes how it measures success. Revenue is celebrated; profit is secondary. For small and medium-sized businesses, this is a genuinely dangerous mindset to adopt. In the early days, cash flow will be the ultimate difference between thriving and going bang. A client can owe you a large sum and your business can still fail if that money doesn’t arrive in time to cover your wages run.

But still, small business owners routinely chase headline revenue figures, winning bigger contracts, and pursuing growth at all costs without doing the hard work of understanding whether these sales are actually translating into cash flow, and whether the timing of receipts matches the reality of their outgoings. It is vital that you know the real numbers that will affect the day-to-day running of your business. And that you understand the difference between revenue and profit, and between profit and cash in the bank. As your accountants, we are here to help you see this clearly.

Outsourcing the customer service relationship

Enterprise businesses outsource customer service, because economies of scale demand it. For small businesses, this is a critical error, as the relationship between your business and your customers is one of the most valuable assets you possess. When you outsource your pitches to a big agency, your customer queries to a call centre, or your social media to a junior member of staff who doesn’t really understand what you do, you lose the intimacy that made customers choose you in the first place. People buy from small businesses because they feel seen. They want the expert, not the system. Protect that connection carefully.

The bottom line is this: the best small businesses succeed by doing things that big companies structurally cannot. They move fast, know their customers personally, make smart decisions without bureaucracy, and treat every rand as precious. Lean into that while you still have it.

When Mr and Mrs J set up a Type-A special trust for their eldest son, who is intellectually challenged, their intention was to make certain there would always be sufficient financial resources for his best care, both during and beyond their lifetimes. A special trust was recommended by a professional advisor and with good reason: Type-A special trusts are created “solely for the benefit of a person with a mental or physical disability.” However, as Mr and Mrs J found out, while Type-A special trusts have very compelling tax benefits, there are also substantial tax limitations. Fully understanding these within the unique personal context of the ultimate beneficiary is essential to ensuring the trust objectives are met over the long-term. And that means relying on specialist and individualised tax advice when considering a trust arrangement of any kind.

Why set up a trust?

A correctly structured trust can be a powerful financial planning tool for business and property owners, wealthy individuals, or families. It can help manage succession, protect assets, provide for children or dependents, navigate estate planning issues and pass on wealth responsibly. What is crucial is setting up the right structure for the objectives of the particular trust and understanding the consequences – and particularly the tax consequences – of the decisions made.

Which trust is best for you?

There are many different types of trusts in South Africa. For example, an inter vivos (living or family) trust, is created during your lifetime to hold assets such as property, business interests or investments, while a testamentary trust is created through a will (it only kicks in after your death) and is especially important where minor children are involved. There are also vesting and discretionary trusts, and hybrid trusts that combine the two, as well as a range of specific application trusts like trading (business) trusts, charitable trusts or BEE trusts, to mention but a few.

What about special trusts?

For tax purposes, two types of special trusts are also recognised, the Type-A special trust is intended solely for a person with a mental or physical disability, as in our opening story, and the Type-B special trust created specifically for the benefit of relatives of a deceased person, provided at least one beneficiary is a minor on the last day of the trust’s year of assessment.

The trust types are not mutually exclusive. For example, a trust can technically be both a Type-A special trust and a vesting trust; or both a Type-B special trust and a discretionary trust. However, the exact trust type really matters from a tax perspective, because Type-A and Type-B special trusts are not taxed in the same way, and both are taxed differently to normal trusts. This should be carefully considered before establishing a trust, and then disclosed when completing the mandatory annual tax returns.

How is income for normal trusts taxed?

In terms of what is called the “conduit principle”, trust income or capital gains may be taxed in the hands of the trust or the beneficiaries, depending on when that income or capital gain vests. Where the trust itself is taxed, it is taxed at a flat rate of 45%. Beneficiaries are taxed at their personal tax rate on a sliding scale from 18% to 45% and also benefit from various tax rebates. SARS taxes a trust’s capital gains depending on whether the gains are retained in the trust or vested to a beneficiary in the same year of assessment. Normal trusts face an effective Capital Gains Tax (CGT) rate of 36% (calculated from an inclusion rate of 80%, which is then taxed at the flat 45% income tax).

Beneficiaries that are individual taxpayers have a maximum effective CGT rate of 18% (calculated from an inclusion rate of 40%) and also qualify for rebates such as the R50,000 annual CGT exclusion, the R3-million primary residence CGT exclusion, and disregarded CGT gains on personal-use assets or compensation for personal injury, illness or defamation.

The special case of Type-A special trusts

Type-A special trusts, on the other hand, are taxed using individual income tax brackets on a progressive sliding scale from 18% to 45%. Their capital gains inclusion rate is 40%, making their maximum effective CGT rate 18%, lower than for normal trusts and the same as for natural persons. They also qualify for CGT rebates that apply to individuals as listed above. Relief from donations tax on interest-free or low-interest loans to Type-A special trusts also applies.

However, there are some important tax limitations. Type-A special trusts do not qualify for medical tax credits, primary tax rebates, or the annual interest exemption available to natural persons. A Type-A special trust may vest income in a qualifying beneficiary so that the income is taxed in that individual’s hands, enabling the individual to use their own rebates, medical credits and interest exemption.

Bottom line: it’s complicated, so get professional tax advice based on your specific circumstances.  

Our tax advice can make all the difference

Whether you’re considering a special trust, an inter vivos trust, or any other structure, the differences in how income and capital gains are taxed, and what tax rebates are allowed, can have a significant impact on the real-world benefit delivered to the trust beneficiaries. The right choice depends entirely on the trust’s objectives, your unique circumstances, and a careful analysis of possible tax consequences.

For specialist, individualised tax advice and professional assistance, contact us.