“When you wake up every day, you have two choices. You can either be positive or negative; an optimist or a pessimist. I choose to be an optimist. It’s all a matter of perspective.” – Harvey Mackay
In these uncertain times with the coronavirus crisis and the impact it has on each individual, business and family, we want to share the following information with you. We are aware that there are still alot of grey areas, with new information being released on a daily basis. We are committed to staying informed as far as possible so that we can help you during this challenging time.
Essential Service Businesses
During the lockdown period as set by the President of South Africa, only businesses listed as “essential service businesses” may trade. Visit this website for the complete list, and also to apply for a permit to trade.
The concession is for small and medium businesses with a turnover of less than R50 million per year. Note that there is no relief at this stage w.r.t. the submission and payment of VAT and UIF.
The relief is as follows:
ETI benefits raised from 1 April 2020 to 31 July 2020
The maximum rebate that can be claimed is raised from R1000 to R1500 for the first twelve (12) qualifying months, and then from R500 to R1 000 for the next twelve (12) months. An ETI claim of R500 will be allowed during the four (4) months for employees in the age group 18-29 who were no longer entitled to claim ETI benefits because the employer already claimed these benefits for 24 months. An ETI claim of R500 will also be allowed during the four (4) months for employees in the age group 30-65 who would otherwise not qualify because of their age.
Postponement of payment of employee tax (1 April 2020 to 3 July 2020)
20% of the employee tax payable to SARS can be deferred without SARS imposing fines or interest. The deferred employee ta must be reimbursed in equal parts. This should be done over a six-month (6) period that will start on 1 August 2020. The first payment must therefore be made by 7 September 2020.
Postponement of payment of provisional tax
This relief applies for the period 1 April 2020 to 31 March 2021. A portion of the amount of provisional tax payable may be deferred without SARS levying penalties and interest. The first provisional tax payments payable from 1 April 2020 to 30 September 2020 can be made based on 15% of the estimated SARS liability. The second provisional payments payable for the period 1 April 2020 to 31 March 2020 will be based on 65% of the total SARS liability. The difference must be paid in full with the third provisional tax payment to avoid interest.
State Funding and Aid
There are three (3) options available. Please make sure that you meet the criteria. It is also important that all your business with SARS is up to date.
Visit this website to apply for funding. Note that only companies and CCs qualify. Here there are two (2) grants that can be applied for, the SMME Business Growth Resilience Facility and the SMME Debt Relief Scheme. The eligibility criteria are available on the website.
This financing is facilitated by Nedbank, ABSA, Standard Bank and FNB. Eligible small and medium businesses will receive a loan amount equal to R750 per qualifying employee per week for a period of fifteen (15) weeks. Thus, R11,250 is received over a period of fifteen (15) weeks per permanent employee. There is no limit to the number of qualifying employees per business. All employees, except directors, will qualify. The funds will pay out directly into the employees’ bank account, although the responsibility for repaying the loan remains with the business. The funds will be lent interest free, with a repayment period of five (5) years.
The requirements to qualify are as follows:
- Annual business turnover is less than R25 million.
- The business has been trading for at least 24 months.
- The business had to be a sustainable business on 29 February 2020.
- The business must be adversely affected by COVID-19.
This grant and funding assistance is available to sole proprietors, CCs, companies and trusts. Visit this website to register. The Rupert Funding offers sole Proprietors a grant of R25 000 per qualifying business to pay for overheads and undertakes to make the payment within seven (7) working days of the application, provided that the criteria are met. The Rupert Funding offers CCs, companies and trusts a grant of R25 000 per qualifying business, as well as loans between R250 000 and R1 million. The loan is interest free for twelve (12) months with no repayment terms. The loan is repayable after twelve (12) months and will bear interest at prime rate from month thirteen (13), when the business is back on its feet. The fund also undertakes to provide part of the financial assistance within seven (7) working days of the application being submitted. Due to the high volume of applications, the application process was temporarily halted until the backlog was met.
Claims regarding employees
There are two (2) options that can be followed regarding your claim due to COVID-19. Please note that no claims can be made if your employees are not registered on your UIF.
The first option is UIF. You can claim UIF if your employees work reduced hours as a result of COVID-19. The application is submitted by the employee himself and the UIF pays directly to the employee. The pay-out will be equal to the minimum wage (R3 500) per employee for the period the business is under lockdown, limited to a maximum of three (3) months.
The second option is TERS. You can only use this option if you close your business because of COVID-19 and employ your employees. The employer submits the application. The money is then paid to the employer to pay the employees themselves. The employer does not have to open a new bank account to pay the claims, the claims will be paid into the employer’s existing bank account. To initiate the process, email email@example.com and a return email will automatically be sent with all the necessary forms to be completed. The money paid is calculated on a scale of 38-60% of the employee’s salary, subject to a maximum threshold of R17 712. BVSA can assist with the preparation of the documentation and also the submission of the claims.
Accidental/casualty claims due to COVID-19 can only be submitted if the employee has contracted the virus while employed at work.
Good luck to each of you in these uncertain times. BVSA’s accounting and financial services continue as usual. Staff are available via their cell phone or e-mail. Everyone has a responsibility to do their part to prevent the spread and social distancing is the most important thing we can do now.
Please contact one of our expert advisors for further information.
The above-mentioned is for information purposes only and is in no way advice. Boshoff Visser Konsult (Pty) Ltd. encourages readers to get in touch with an expert financial advisor before making any decisions.
Article written by BVSA