SARS Tax Compliance

SARS compliance covers multiple tax obligations that every business must meet.

The key tax types for SMEs include:

• VAT (Value-Added Tax):
  • Required if turnover exceeds R1 million/year (compulsory).
  • Voluntary registration from R50,000 turnover.
  • VAT201 returns submitted monthly or bi-monthly.
• PAYE (Pay As You Earn):
  • Applies to any business with salaried employees.
  • EMP201 returns submitted monthly.
• UIF (Unemployment Insurance Fund):
  • Deducted alongside PAYE.
• SDL (Skills Development Levy):
  • Required if payroll exceeds R500,000 per year.
• Provisional Tax:
  • Paid twice a year for most companies.
  • Based on estimated taxable income.
• Company Income Tax (CIT):
  • Annual tax return (ITR14) due 12 months after financial year-end.

📌 Tip: These taxes don’t operate in isolation — SARS cross-references everything. Accuracy across all submissions is critical.

CIPC Compliance (Company Registration & Annual Returns)

Every registered company must:

• File CIPC Annual Returns once a year, during its anniversary month.
• Keep director information updated.
• Maintain statutory records and resolutions.
• Submit financial statements or summaries depending on company type.

📌 Tip: CIPC non-compliance can lead to deregistration—blocking tenders, contracts, and funding.

Financial Reporting Compliance

SMEs must prepare and maintain proper financial records that:

• Accurately reflect income, expenses, and profit
• Support SARS submissions
• Are ready for auditors or funders if required
• Are retained for at least 5 years

📌 Tip: Even if your business isn’t audited, clean financials are essential for tax, funding, and business valuation.

SARS Record Keeping Rules

By law, SMEs must retain:

• Tax invoices
• Bank statements
• Contracts
• Payroll records
• Loan agreements
• Asset registers
• SARS assessments and submissions

Retention period: 5 years minimum.

📌 Tip: Using cloud software like Xero (managed by Bletchleys) simplifies long-term record keeping and compliance.

Labour & Payroll Compliance

If you have employees, financial regulations don’t stop at tax:

• Employment contracts must meet labour law standards.
• PAYE, UIF, SDL must be correctly calculated and submitted.
• IRP5s must be issued annually to employees.
• UIF declarations must be filed monthly.

📌 Tip: Payroll compliance is one of the fastest areas SARS can audit if your submissions are late or inconsistent.

SARS Audits & Verifications

Even if you believe your submissions are correct, SARS can:

• Request supporting documents (verifications)
• Conduct full audits covering multiple years
• Apply penalties and interest if errors or omissions are found

📌 Tip: At Bletchleys, we manage SARS verifications directly for our clients — reducing stress and minimising risk.

Why Financial Regulations Matter Beyond SARS

Non-compliance doesn’t only affect tax — it can block:

• Funding and finance approvals
• Contract tenders
• Investor due diligence
• Company sales or exits
• Banking facilities

📌 Tip: Long-term business growth depends on clean, compliant financials.

Why SME Owners Often Struggle With Compliance

• Regulations constantly change.
• Directors are focused on operations, not admin.
• SARS systems are complex and unforgiving.
• Small errors compound quickly if left unchecked.

This is exactly why outsourcing to experts like Bletchleys saves SME owners both money and stress.