EMA Newsletter June 2009

New Changes Introduced by SARS and How They Affect You & Your Business

Tightening Up on Provisional Taxpayers

SARS have introduced a new method to determine the payment of your provisional taxes. Previously, a taxpayer was expected to calculate their provisional tax payment based on their last tax assessment. However, as from 1 January 2009, SARS now wants you to calculate an accurate taxable income figure, even though the year will not be finished.

Importantly, when making this calculation, SARS will allow a 20% margin for error, but should your calculation be out by than more than 20%, a penalty of 20% on the difference will be raised together with interest.

SARS have indicated that they will be lenient with regards to the payments made for your second 2009 provisional tax; however the new rule will be applied strictly with effect the provisional tax returns for the 2010 tax year.

The Importance of Accuracy – How Your Accountant can Help

Due to this new legislation, it is now imperative to make accurate calculations and it is here that your accountants can play a vital role. By timeously forwarding all relevant information to your accountants, it allows them to extract more accurate financial information, and similarly ensure that an accurate calculation is made for the assessment. Should you not give your provisional TAX returns the attention needed; the risk for penalties can make this potentially very costly.

Submitting an accurate provisional tax return is important even though you might not be in a position to make payments. Your accountant can always arrange with SARS that you settle the amount due in 3 installments which will also eliminate the additional 20% penalty.

Administrative Penalties

SARS have also introduced administration penalties - designed to target taxpayers who are not submitting their returns. This is applicable to virtually all returns and will be levied at R250 p/month per return. A sliding scale is applied once your taxable income exceeds R250 000 per annum. The penalties are also applicable should your returns be nil or credits due by SARS. The penalties will be applicable to the following:

• Registered as taxpayer
• Informing SARS of change of address
• Submitting returns ( All )
• To submit information requested
• Appointment of public officer

In ConclusionIf you are a provisional taxpayer, it is now of significant importance to give your assessments necessary attention so as to avoid incurring potential penalties due to administrative or calculation-related errors. These can become costly for you or your business.

4 Things to know about Life Assurance

Life Assurance (LA) plays an important role in the provision of finances for families and loved ones.When it comes to claims, most LA members believe that as long as they have remained up to date with their premium contributions that there will be no problems or delays when processing their claim.However, there are many things that can affect the claims process, creating delays and complications that can frustrate beneficiaries that in most cases are depending on the claim funds.
Every year the ombudsman receives thousands of complaints in respect of assurers that refuse to pay out a claim.

4 Tips to Avoid Claims-Related Complications

Here are potential 4 important points to consider regarding your LA policy that may help you avoid claims-related complications.


1. Failure to disclose
It is important to disclose all information required, and also to ensure that this information is as accurate as possible. This is probably the primary cause for assurers not settling claims.

2. Update your details
This is not only applicable to your personal details but also your current medical condition (i.e. You may have recently contracted an illness that may affect the claims policy).


3. Not Checking the “Fine print”
Always check the exclusions mentioned in your policy documents – this is important so that you are aware what aspects are not covered by your policy.

4. Check What You Were Sold
Be sure to check your actual policy document against what was agreed with your financial adviser. There may be details that were inadvertantly overlooked by your adviser