SARS: Time to upskill your employees

One of the priorities for Employers is to develop an engaged, agile and diverse workforce. At the same time, some employees aspire to improve their formal qualifications, while some individuals are looking for a job.

Employers are encouraged to take advantage of the existing Learnership Allowance Agreement which aims to encourage skills development among employees. Additionally, it promotes job creation and contributes to economic growth in South Africa.

A learnership agreement is a contract between an employer, a learner and a training provider that allows the learner to gain a recognised qualification while working for the employer. The learner receives both theoretical and practical training, and the employer provides the necessary resources and supervision.

A learnership agreement can be entered into by any employer, regardless of whether they are registered for the Skills Development Levy (SDL) or not.

Learnership agreements have many benefits for both employers and learners/employees.

One of the main incentives for employers who enter learnership agreements is the additional tax deduction in respect of learnership agreements (as stipulated under Section 12H of the Income Tax Act). This deduction allows employers to claim an amount over and above the normal salary or wage expense for each learner who is party to a learnership agreement.

The amount of the deduction depends on the NQF level of the qualification, the duration of the learnership, and whether the learner is a person with a disability or not. The deduction is available for both new and existing learnership agreements, and for both full-time and part-time learners.

A learnership allowance consists of two parts:

1. An annual allowance is available for each year of assessment in which a learner is party to a registered learnership agreement (Section 12H(2) and (2A)). It is apportioned if the agreement was not in effect for the full year.
2. A completion allowance is a lump sum available in the year of assessment when the employee completes the learnership. It is claimed in addition to the annual allowance.

The amount of the allowance depends on the level of qualification and the disability status of the employee. The table below shows the current rates of the allowance as of the 2023/2024 tax year.

To claim the allowance, the employer must complete an IT180 form for each learnership agreement. This must be submitted to SARS along with the employer’s annual Income Tax Return. The allowance will be deducted from the employer’s income from trade when the employer’s Taxable Income is determined.

Tax Filing Deadline Reminder for Provisional Taxpayers

An important reminder is that Provisional taxpayers must file their annual Income Tax return for the 2023 tax year by 24 January 2024. This applies to both electronic and manual submissions.

Electronic submissions can be done through SARS eFiling or the SARS MobiApp. Manual submissions can be done by appointment at a SARS branch. Provisional tax criteria are published on the SARS website.

We encourage those taxpayers who are yet to file their tax returns to do so immediately to avoid administrative penalties for late and non-submission.

Deadline for Trusts to file an annual return

All Trusts, including those who are not economically active, are required to file a tax return annually. Trusts must file their annual income tax returns before or on 24 January 2024.  Individuals and trustees, as representative taxpayers of Trusts (or their appointed tax practitioner), are reminded to ensure timeous filing based on their specific taxpayer status (provisional or non-provisional). Late filing will attract penalties and interest.

As of 2023, trustees are required to submit mandatory supporting documents during the filing process. These documents include, amongst others, the Trust instrument, Annual Financial Statements, Letters of Authority, resolutions/minutes of trustee meetings and an organogram depicting the Beneficial Ownership of the Trust. Additionally, beneficiaries of Trusts are required to declare their income, including income derived from a Trust, in their personal income tax returns.

The personal income tax return (ITR12) and Trust income tax return (ITR12T) can be obtained on eFiling. An appointment with a SARS branch may be made on the SARS website. Taxpayers are encouraged to obtain information on trusts on the SARS website.

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