PROBLEM

It has always been a difficult and demanding task for professional contractors to stay on top of tax and workplace compliance regulation in South Africa, some of the most complex in the world.

With the looming introduction of other tax reforms, the situation will not become any clearer. The tax law requires that all contractors / commission agents are required to obtain directives. This requirement forces contractors back into the PAYE system.  If you are not issued tax directives, a tax rate of +/- 45 - 49 % will apply.

What is needed is someone to look after these concerns for you, making sure you stay ahead of changes and relieving you of all your administrative burdens, allowing you to focus more clearly on the main game - delivering your specialist skills.

Background

The SARS has mounted a more and more vigorous attack on the "bonafides" of self-employed persons.

The SARS has spent considerable time and effort to attempt to classify Commissions as Salary/Wages. 

There is ever increasing pressure from the SARS both to increase their revenue base and improve their collection methods.

High on their list of priorities are non-incorporated persons operating as contractors, sub-contractors, commission sales persons and other similar entities where the predominant purpose is "wholly or principally the provision of labour". 

Another initiative attempted to have a series of new laws promulgated in an attempt to eliminate contracting as we know it. 

Will The Tax Office Be Looking At Computer Contractors?

During the coming year we will be taking a close look at "contract" arrangements that involve the provision of personal services.  We are aware of these arrangements in various industries and professions including:

• computing / services industry
• sales and marketing
• building industry
• government and semi-government instrumentalities
• architecture
• insurance agents
• engineering
• professional occupations such as law, medicine and accountancy
• teaching

Where a person offers their services through a duly incorporated company structure, which preferably is entirely independent, and provides services of more than three parties to a range of end users, the SARS is unable to dispute the arrangement.

This is the comfort that a composite company structure provides.
see Solution