Page 9 - Business Sense-11.2 Brian Howarth- ebook

FROM RETRENCHMENT TO REINVENTION:

NAVIGATING THE ENTREPRENEURIAL JOURNEY

Heather Flack, Business Undoubtedly, retrenchment When deciding on whether to assess whether you are still able much profit you think you will
Leader, Flair Accounting is one of the most emotionally trade as a sole proprietor versus to afford the debt you need, make for the whole year, so be
taxing career moments for anyone. a Pty, I always ask clients – what they will now use the Annual sure that you are including all

But once the rollercoaster ride is track are we racing on? You need Financial Statements (AFS) the deductions available to you.
ncreasingly I over, those brave enough realise to bring the right vehicle to the of your business. This is the You then pay 50% of the tax due
am seeing, in they have an opportunity to be right track. I grew up on a farm, independently accounted for and on that profit to SARS. When
Ithis rapidly their own boss and, ‘ta-da’ – a and out there, a tractor is your best reported record of all financial your final income tax return
changing new consultancy is born! This friend. Formula 1 is also a deep transactions of your business. So, is submitted, you need to be
economic ethos is what I love about South passion of mine. Now, you can get a good accountant as soon within 80% of your provisional
landscape, Africa, the opportunities to be an enter a tractor in an F1 race, and as possible! And remember that tax estimates. If you are not,
businesses entrepreneur abound. it will make it around the course when presenting an AFS to a SARS will charge a 20% penalty,
scaling – eventually, but it will never win, bank or investor, the reputation plus daily compounding interest
back and So, what’s next? You need to and the cost to Team Tractor will of your accountant does matter, on the under-estimation.
riding the proverbial wave, by consider three factors. Mitigating be huge. Similarly, you can put so choose wisely. Multiply that over a few years
retrenching as many people as risk and protecting your personal Lewis Hamilton and his Ferrari in Something that is very important and suddenly the penalties and
they can. A huge upswing of assets from the risks of a new a tractor race, and that beautiful to every entrepreneur, is their tax interest grow into a mountain.
retrenchments was seen globally venture. Maximising your ability red racing machine will be bill. While you were employed, What an absolute waste of
in 2024. Dell cut its workforce to access finance. And being as smoking and in pieces before the the company you worked for money. So please get a good
by 12,000 employees, Samsung financially efficient as possible and first corner. deducted PAYE (Income Tax) accountant who will effectively
by 26,780 and Unilever by 7,500. leaving no tip on your tax bill! Often for service industries, such from your salary and paid it over help you to plan for this.
The South African mining sector Let’s delve a bit deeper. as consultants or contractors, to South African Revenue Service You have already survived the
retrenched over 10,000 people. a Pty may not be the most (SARS) every month. Once a hard part of the retrenchment,
And Telkom reduced their Most people run out and register efficient vehicle for you to start year they issued you with a tax so take a moment to dream of
headcount by 1,747. a Pty Ltd (Proprietary Limited). your business in. Similarly for certificate (IRP5) that showed something new. Reach for the
businesses with high risk and your total earnings and how much stars but keep your feet firmly on
stock exposure, being a sole tax they had deducted from your the ground by getting informed
proprietor may not be the best salary. You used this to submit and starting off right. I wish you
move. So, get some advice and your personal tax return to SARS every success on your journey!
decide what track are you going to each year, and that was that. As a Our beloved country needs more
race on, before you go out and buy contractor or consultant, you still people like you.
the vehicle. need to pay tax. The question is
how much tax, and how do you
Being self-employed, your pay it over to SARS? T: +27 (0)31 207 1572
access to finance has now E: heather@flairaccounting.co.za
drastically changed. While you Your business cycle will work W: www.flairaccounting.co.za
were employed, walking into a in financial years – beginning
dealership with three months’ pay 1 March and ending the last
slips and bank statements, meant day of February each year.
walking out with a new car. Now, You will need to register as
you need to prove your income, a provisional taxpayer with
and your overall wealth and SARS – which means every six
ability to sustain that income. months in August and February,
For a financial institution to you submit an estimate of how

TIME TO STEP UP:

FIXING INFRASTRUCTURE AND DISASTER MANAGEMENT

Inanda Bezuidenhout, Franchise We supposedly have an collapses, we end up paying Earlier this year, some insurers Transparency matters – Disaster
Principal, Short-Term Insurance Asset Integrated Disaster Management again through higher insurance and municipalities signed a funds and municipal budgets
Protection and Risk Management Plan that’s meant to be updated premiums. Every storm leads to memorandum to collaborate, but, should be audited and made
Specialist, Consult Peak Sure every five years, but where’s the more claims, forcing insurers as usual, implementation is the public. We need to know where
impact? What’s happening with to hike prices. Insurance isn’t issue. More insurance companies our money is going.
he recent heavy rains and the money allocated for disaster a government handout – it’s need to push for meaningful
devastating floods have response, including funds from funded by policyholders. partnerships. We have the Government-backed disaster
Tleft destruction in their international partners like the With only about 30% of South skills and resources – so what’s insurance – South Africa doesn’t
wake, exposing just how weak Netherlands? If the plan exists, Africans insured, who’s going to stopping us? have a national disaster insurance
our municipal infrastructure and why aren’t we seeing it in action? cover the next big disaster? fund. It’s time to create one to help
disaster response really are. Years The Way Forward: Real Solutions, reduce the financial burden on
of neglect and poor management Budgets are there so why are we Globally, insurers are getting Not Just Talk individuals and insurers.
by municipalities are now front always playing catch-up? stricter as disasters become more
and centre, with the public frequent. If we don’t manage Action over paperwork – Let’s Demand Better – Now
demanding answers and action. Every year, municipalities funds wisely, insurance pools Disaster management plans This isn’t a temporary
get budgets. Yet, when disaster will dry up, putting even more shouldn’t just be reports sitting crisis. Climate change is real,
Climate change is here, and our strikes, they scramble to shift pressure on individuals and on shelves. They need to be and things are only going
infrastructure isn’t ready funds from essential services like taxpayers. implemented, and the public needs to get worse. We must hold
Weather patterns are getting road maintenance. This vicious to see real results. municipalities accountable,
more extreme, and it’s happening cycle of reactive spending means Why aren’t we using private Preventative measures – Let’s push for smarter planning, and
fast. The South Coast and nothing ever gets fixed properly. sector expertise? fix infrastructure before the next encourage collaboration between
eThekwini Municipality have Instead of always cleaning up Risk management experts flood hits. Municipalities should government, the private sector,
taken serious hits, with each storm after the fact, why aren’t we have been saying it for years: work with insurers and engineers and communities. Only by being
making it harder for communities investing in prevention? insurers, municipalities, and to strengthen weak spots now. proactive and transparent can we
to bounce back. Our infrastructure The Double Payment Problem the private sector need to work protect our province and build a
just isn’t holding up. Officials say together. Insurance companies Community involvement – safer future for everyone. 
these systems were built for ‘once- Taxpayers and insurers have top-tier risk assessment Residents also play a role. Keeping
in-a-decade’ storms but let’s be real: are footing the bill. We pay tools and expertise – why aren’t drains clear and reporting M: +27 (0)71 238 8973
these extreme events are happening taxes expecting functional municipalities tapping into that maintenance issues can go a long E: inanda.bezuidenhout@consultm.co.za
way more often than that. infrastructure, but when it knowledge? way in preventing bigger disasters. W: www.consultm.co.za

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