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Sars 101 for small businesses: Tips to get through tax season
'Timely planning and preparation can help alleviate stress' - expert.
Entrepreneurs should ensure their tax filing is in order. Image: iStock
Getting through the tax season can be an administrative storm for most entrepreneurs, requiring sufficient information for smooth sailing.
While filing taxes can be a lengthy process, having the right knowledge and expert guidance can help ease the burden.
Although the South African Revenue Service (Sars) has set guidelines for all taxpayers, most small business owners struggle to navigate their way through the taxman’s roadmap.
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‘Missed opportunities’
Echoing, Country Manager at Xero South Africa, Collin Timmis said despite the tax collector’s efforts to modernise its systems, small businesses still struggle to fulfil their tax obligations.
“In 2022/23, 1.2 million business owners submitted tax returns, but only 130,000 registered for small business corporation tax and turnover tax,” Timmis noted.
“The numbers are very low in both of these areas. This is a huge, missed opportunity for smaller businesses, as there are benefits they could be missing out on, like paying less tax,” he explained.
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Leveraging technology
However, the expert said that small firms could leverage technology and strategic planning to make taxes work for their benefit.
Furthermore, he advised entrepreneurs to work with an accountant to better understand the tax implications for their business.
“Accountants can assist in navigating financial regulations, tax compliance, and can introduce digital tools for streamlined operations and real-time insights,” said Timmis.
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Getting into the habit
Timmis also emphasised the importance of keeping track of deadlines and knowing the different tax types, saying it allowed for better cash flow management and provision for pending payments.
“Timely planning and preparation for tax season can play a huge role in alleviating stress and ensuring compliance.”
The expert encouraged entrepreneurs to get into the habit of keeping digital records of all accounting transactions, as well as supporting documents throughout the year.
“Capturing receipts, bills, and invoices digitally makes it easy to access these when it comes to tax time,” he said.
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