Struggling to Keep Up With Compliance Requirements? Need Payroll Help?
Payroll management is often left behind when it comes to prioritising management, but considering how poor management of the function affects staff members, perhaps companies need to take the function seriously. Late payment of salaries is against the law and inaccuracies on the pay slips apart from leading to disgruntled employees can lead to SARS investigations.
Companies need payroll help, so we have listed some of the common payroll mistakes that company owners make and how to avoid such as briefly discussed below.
Accounting Information Issues
SARS is rather serious about accuracy and inaccurate accounting information certainly affects the correctness of the employee’s tax return. The mistakes often arise from the lack of clear distinction between the affairs of the business and the owner, especially when it comes to small- to medium-sized companies. SARS auditors assess the accuracy and integrity of the firm’s accounting records to determine where the owner has submitted private expenses as business expenses.
The law pertaining to taxes in South Africa requires proof of the expenses and income, as well as requires that supporting evidence must be kept in a certain order. To prevent getting on the wrong side of the law business owners should hire an experienced bookkeeper or outsource the function to payroll and tax experts such as The Tax Shop. They must ensure consistency in their account and reports. Another step that can be taken is that of setting up of control accounts and ensuring monthly reconciliation of such, as well as setting a policy for recording of expenses and income to create a clear line between what is private income or what is a private expense and what is a business expense and thus tax deductible.
Small business owners often don’t see the seriousness of payroll management and tax accountability. They leave the issue of tax submissions and payments before the allotted deadlines till last and first deal with business operation expenses. However, not paying the taxes due or not submitting the provisional tax returns on time go hand in hand with excessive penalties. Two or three years of such and the business owners are in severe financial trouble with SARS.
If the profile fits you and you need payroll help – let The Tax Shop help you rather than landing in the hot pan. With such professional help you are reminded of submission deadlines and payments due. In addition, The Tax Shop can help you negotiate extension of deadlines for submissions. Monthly PAYE calculations and deductions associated with your payroll should be done correctly and on time and this is why expert help from The Tax Shop is so valuable.
To prevent the situation from getting out of control if you fit the profile, get The Tax Shop help and make sure you include your income tax, PAYE and VAT in your monthly cash-flow projections. Setup a separate bank account where you deposit the indirect taxes for when you have to make the provisional tax payments. Start including your income tax in all planning to ensure that the cash is available to pay the taxes when necessary and get tax advice from one of The Tax Shop consultants regarding compliance requirements and which expenses you can deduct.
With payroll compliance being exceptionally important it is essential for small business owners to ensure correct recording, on-time payment, correct deductions and general compliance with SARS requirements.
Understandably time is often not a resource that is readily available when it comes to the small business owner. This leads to slacking on the part of payroll management and more often than not they employ people without ever setting up employment contracts or deducting UIF and tax. If you are also one of these small business owners you need payroll help. Let The Tax Shop help you sort out the monthly payroll, ensure proper recording, on-time payment, accurate pay slips, submissions to SARS and UIF while you focus on business at hand.
All these questions can be answered when you make use of The Tax Shop payroll, accounting and tax services.