Following the success of their tax return product for individuals, innovative fintech company, TaxTim, has launched a company tax return tool to broaden their tax service to South African small businesses.
TaxTim provides an online service to help with the completion and filing of tax returns, thanks to expert guidance from Tim, a digital tax assistant. The latest addition sees TaxTim provide provisional and annual tax return services for SMEs that:
· Are registered Pty Ltd with the Companies and Intellectual Property Commission (CIPC)
· Make less than R1m in turnover/revenue for the tax year.
Small business owners typically go it alone when it comes to tax
TaxTim conducted a survey this year of small business owners in South Africa. The data revealed that 58% of owners took it upon themselves to manage the books of their company, with the majority not having any formal training. When asked about who was responsible for completing the annual company tax return (ITR14), only 13% of those handed the role over to an outsourced professional. This data validated the decision to provide an affordable service for small business owner-managers who don’t have extensive accounting and tax knowledge, allowing them to complete their company tax returns correctly and confidently. The cost of the SME annual tax return (ITR14) completion is R1199.
Marc Sevitz, co-founder and CFO, said, “When we started this venture, our vision was to transform the tax return process for all taxpayers. The individual market was a natural starting point and I looked forward to the day that we would release services for businesses too. It’s exciting to see that come to fruition.”
TaxTim is a gold member of AlphaCode, a Rand Merchant Investments (RMI) club for fintech start-up entrepreneurs. Dominique Collett, RMI’s senior investment executive and head of AlphaCode comments, “SMEs have traditionally been underserved by financial services firms, so we think this is an exciting development from TaxTim as small business owners really need empowering tools like this to enhance their business productivity. We particularly like how TaxTim approaches a daunting topic like tax by simplifying the process and engaging the user digitally.”
Easy company tax returns and tools for SME business owners
Like the individual tax return service, TaxTim’s conversational approach guides users through the company tax return step-by-step, without the need to understand technical accounting and tax terms. Questions are presented in a logical order in plain English and, where necessary, linked to pre-formulated calculators or tools.
Nicci Courtney-Clarke, Senior Tax Specialist and project lead, explained “Company tax is more detailed than individual income tax, but this provided us with an opportunity to expand the service and develop several new tools that add value. We were able to break down complicated tax specific transactions into simple terms and ultimately help SMEs turn accounting transactions into tax values – quickly, easily and correctly.”
These calculators and tools allow users to:
· Determine whether the business qualifies as a Small Business Corporation (SBC)
· Calculate wear and tear / depreciation values on various assets or equipment
· Work out whether certain expenses are tax deductible
· Calculate complex asset disposals to ensure accurate capital gains / losses are recorded
Throughout the process, as the user responds, TaxTim records the answers and, once completed, presents the results with all incomes, expenses, allowances, calculations and deductions filled in the correct place on the ITR14 document and checked for accuracy and compliance. The only thing left for the taxpayer to do is to copy the information across into the SARS generated ITR14 document on eFiling and submit their return.
Future update plans include company tax returns for businesses earning more than R1m per annum, direct linking with SARS for one-click submission (as available for individual tax returns) and integration with leading cloud accounting packages such as SAGE, Xero and SMEasy.