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Small business owner suffering in SA

Date posted: 08.10.2014 | Author: Harry Bovensmann

Small business owner Jonathan C shares the hard realities of running your own business in South Africa. He has two small businesses of R2m. As an accountant he does everything by the book and to him the biggest stumbling block is the returns required by the SA Revenue Service (Sars):

Tax returns

  • EMP returns (employee tax) 1 per month 12 per year
  • PAYE recon 2 per year
  • Got staff – perhaps 6 – 12 IRP5s or IT3s
  • VAT 6 per year excluding the 4 (in my case) VAT reviews.
  • If you have a claim? Mine has not been paid back despite recording a conversation that it will.
  • Now if you are a sole proprietor you will have another 2 provisional returns and a your own annual tax return.

Labour laws a small business has to comply

Now besides dealing with Sars one should also know these Acts:

  • Occupational Health and Safety Act
  • Compensation for Occupational Injuries and Diseases Act
  • Basic Conditions of Employment Act
  • Employment Equity Act
  • Labour Relations Act
  • Unemployment Insurance Fund Act
  • Skills Levy Act
  • Cipro return – if a company.
  • Coida  return and
  • any Act that may be specific to your business.

…and of course the laws are always changing.

Staff issues challenging a small business

Now we need to run the business. I have staff:

  • who constantly have to be paid, have to get a minimum salary and increase, even if they are not worth it.
  • want to borrow money – otherwise they don’t come to work as they cannot afford taxi fare.
  • who stay off work anyway.
  • who go on leave – so keep a leave roster.
  • who want a bonus at the end of the year – so prepare to have no cash over December.


You need to market, advertise and perhaps deliver your product. If you want to play with the big company’s get a BBBEEE certificate.

If the suppliers are VAT registered and you’re not, your cost is already 14% higher and Sars does not want small vendors, so you are immediately at a disadvantage. If you sell back to a VAT registered customer, they will need to further add 14% VAT on. Your product could be uncompetitive.

If your computer breaks you can’t call the IT guys next door – fix it yourself or take it somewhere and remember to backup.

Keep a Cashbook, debtors, credits, fixed assets, stock control, VAT and diary – and at the end of the day one may still have to make a product, as I do. So you need time and without this product everything above is pointless and must take a secondary seat. If you are selling a skill, then things are a lot different.

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