Kirsten Van Tonder – Page 13

2 Oct

Saving for retirement can prove to be a very complex task, however, this does not have to be the case. Many people are not making the necessary provisions for retirement. When you start a new job or enter the workforce for the first time, the last thing you think about is saving for retirement, however, you should start saving for retirement as soon as possible, to ensure that you live comfortably in your old age.

It does not matter how far away you are from retirement, you should start saving and not spend this money on other things. As a rule of thumb, it is recommended to save 15% of your gross income, over a period of 40 years, between the ages of 25 to 65. Remember, you will also need to develop a financial plan for major life events – expected and unexpected. This could include anything from medical needs to changing family dynamics.

When thinking about your financial future, it’s important that you make retirement planning a top priority. Today, it’s even more important to start planning for retirement early, as fewer employers are offering pensions and retirement savings. This means that retirement is now more challenging than ever, as traditional pension plans are becoming few and far between. Recently, the responsibility of saving for retirement has shifted from the employer to the employee.

Another reason why it is important to start saving for retirement as early as possible is that longer lifespans have led to people outliving their savings. For example, if you live up to 78 years old, you will be in retirement for a long time. Longer life expectancies also lead to more money spent on healthcare.

If you have not started saving for retirement yet, it’s not too late. Make sure to work with your financial advisor or a trusted financial professional to help you to set out new savings goals so that you can get back on track. With the proper preparation and planning, you can have a comfortable retirement.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

2 Oct

The different VAT supplies

Kirsten Van Tonder

Tax car, rental, VAT, vehicles

There are a few instances where VAT is not charged at the standard rate of 15%. In the following newsletter, we distinguished between the different supplies that attract VAT but does not necessarily have the impact of a standard rate supply.

Denied Supplies

The VAT Act provides for certain expenses where input VAT is denied, even if the expense is incurred in the course of conducting an enterprise and if there are no input VAT consequences there will ultimately be no output VAT consequences. The following circumstances are common instances where input VAT will be denied:

Acquisitions of a motor vehicle:

When a motor vehicle is purchased by a vendor, who is not a motor car dealer or car rental enterprise, the input VAT on the purchase will be considered a denied supply.

The definition of “motor vehicle” includes all vehicles designed primarily for the purposes of carrying passengers. This definition covers ordinary sedans, hatchbacks, multi-purpose vehicles and double cab bakkies. A single cab bakkie or a bus designed to carry more than 16 persons will qualify for input VAT purposes. Any repairs and maintenance to vehicles, irrespective of the type of vehicle, will also qualify for the claiming of input VAT, as long as the cost is separately identified and invoiced.
Fees and Club Subscriptions:

Input tax in terms of subscriptions/membership fees to sport, social, recreational and private clubs are denied supplies. Input VAT may, however, be deducted on subscriptions to magazines and trade journals which are related in a direct manner to the nature of the enterprise carried on by the vendor.

However, fees for membership of professional bodies and trade organisations paid on behalf of employees are not denied supplies and SARS allows an input VAT to be claimed. Trade unions are exempt in this regard.

Zero-Rated Supplies

A zero-rated supply is a taxable supply, but VAT is levied at 0%. Vendors who make zero-rated supplies are still able to deduct input tax on goods or services acquired in making of the zero-rated supplies.

Zero-rated supplies include certain basic foodstuffs such as brown bread and maize meal, certain services supplied to non-residents, international transport services, municipal property rates and more.

Although a zero-rate supply is levied at 0%, it is still a taxable supply and should be declared separately on the VAT return.
Deemed Supplies

A vendor may be required to declare an amount of output tax even though they have not actually supplied any goods or services. Deemed supplies will generally attract VAT at either standard rate or zero rate.

Two common examples of deemed supplies at standard rate are trading stock taken out of the business for private use and certain fringe benefits received provided to employees.

The deemed supply will be declared on the VAT return under either your standard rate or zero-rate codes.

Notional input VAT

A VAT vendor may in certain circumstances deduct a notional input VAT credit in respect of secondhand goods acquired from non-vendors where no VAT is actually payable to the supplier. Second-hand goods exclude animals, certain mineral rights and goods containing gold or consisting solely of gold.

The following requirements must all be met for a notional input credit to be deductible in respect of secondhand goods:
- Goods must be previously owned and used (as per the second-hand good definition in section 1 of the Act) and
- Goods must be used to generate taxable supplies and
- The seller must be a resident non-vendor and
- Goods must be located in South Africa and
- There must be no actual VAT levied on the transaction.
It is important to keep all the documentation for all types of supplies for VAT purposes and to have it available as SARS may require it to confirm VAT transactions.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

2 Oct

What are bitcoins?

Kirsten Van Tonder

Finance News background, bitcoin, cryptocurrencies, original

1.1 Background to Bitcoin

Bitcoin, Ether and Litecoin. These are some of the most prominent cryptocurrencies on the market today. Bitcoin is by far the best-known cryptocurrency due to the substantial increase in the price that was experienced in the past couple of years.

Bitcoin is a cryptocurrency – a digital asset designed to work as a medium of exchange that uses cryptography to control its creation and management, rather than relying on central authorities. Bitcoin was developed by an anonymous creator – Satoshi Nakamoto – to enable society to operate with a digital cash system, without the need for third-party intermediaries which are traditionally required for digital monetary transfers.

Should you wish to read the original paper used to introduce bitcoin to the word, please follow this link: https://bitcoin.org/bitcoin.pdf.

1.2 Tax consequences of cryptocurrencies

For the most part, South Africans have only been able to enter the crypto market locally for a short while, which has drawn the attention of the South African Revenue Service (SARS) to cryptocurrencies.

SARS released a statement on the 6^th of April 2018, declaring its stance regarding the taxation of cryptocurrencies. The following is an extract from the statement:

“The South African Revenue Service (SARS) will continue to apply normal income tax rules to cryptocurrencies and will expect affected taxpayers to declare cryptocurrency gains or losses as part of their taxable income.”

The statement further indicates that for purposes of the Income Tax Act, SARS does not deem cryptocurrencies to be a currency (due to the fact that wide adoption has not been reached in South Africa and crypto can’t be used on a daily basis to transact), but rather defines cryptocurrencies as assets of an intangible nature.

The definition has the effect that cryptocurrencies will be treated as any other investment for tax purposes. The onus lies on the taxpayer to declare all cryptocurrency-related taxable income in the tax year which the taxpayer received or accrued.

Should a taxpayer thus trade in bitcoin, the trades will be deemed to be income in nature and the profit and loss on the trades should be included in the taxpayer’s taxable income. However, if the taxpayer holds the bitcoin as a long-term investment (the same way some investors hold a share portfolio for long-term investing), the income derived from the disposal of the bitcoin will be deemed to be capital in nature, resulting in capital gains tax needing to be declared on the disposal.

1.3 Conclusion

Whether you are for or against cryptocurrencies, it is evident that cryptocurrencies have formed a part of the modern era and will likely remain relevant. This new form of currency/investment has caused quite a stir at SARS and taxpayers are advised to familiarise themselves with the tax treatment of these currencies to prevent any unexpected tax consequences.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

2 Oct

The importance of having a work-life balance

Kirsten Van Tonder

Employee income, job, life, professional

Having a job and a steady income plays a significant role in any person’s life, as it keeps us afloat and drives us to reach our full professional potential. However, when we have an unhealthy work-life balance, this can all come tumbling down.

An employee’s ability to establish and maintain a healthy balance between their work and personal commitments and responsibilities is referred to as a work-life balance. Companies have begun to recognise the importance of helping their employees to achieve this balance. Work responsibilities have also seen an increase recently and this leads to increased stress among employees as they struggle to find a balance between work and personal commitments.

Over the years, there have been dramatic changes in employees’ work patterns, as well as how and where they work. More and more companies have begun to embrace the digital and technological age, which means that work is no longer restricted to the workplace only. Technology enables employees to work anytime, anywhere, and from any internet-enabled device. This means that employees can be reached by employers and even clients 24/7, which makes achieving a healthy balance between work and your personal life even more difficult.

Having an unhealthy work-life balance has a negative effect on both employees and the companies they are employed by. Having an unhealthy work-life balance leads to high levels of stress which results in decreased productivity. Increased stress can also lead to health problems and absenteeism, which costs the company money. Finally, personal relationships and co-worker relationships amongst the employees can suffer, and lead to reduced job satisfaction.

Companies can implement various policies that will aid their employees in establishing and maintaining a healthy work-life balance. Many companies have started to provide their employees with flexible working hours, which helps employees shape and mould their work pattern to fit into their personal schedules. This reduces the conflict between professional and personal responsibilities significantly. Managers can also encourage their staff to use their annual leave, and set clear boundaries which state that staff should not respond to work-related emails and calls during non-working hours.

Finally, it’s not all about job satisfaction, personal satisfaction is equally as important. An employee’s ability to meet personal commitments has an enormous impact on their professional success. When employees have the opportunity to meet these personal commitments, it benefits the company, as the employee is not experiencing conflict between their professional and personal lives.

Helping employees establish and maintain a healthy work-life balance leads to increased job satisfaction as well as increased loyalty to their employer.

Once a company recognises the benefits of healthy work-life balance and implements policies to promote this balance, they will experience an enormous increase in productivity and increased retention of staff, which ensures that the company continues to thrive and succeed.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

27 Aug

Why is emotional intelligence in the workplace important?

Kirsten Van Tonder

Blog ability, core skills, emotionally intelligent

The term “emotional intelligence” was coined in 1990 by scholars, however, business leaders soon adopted this concept and term and made it their own.

Emotional intelligence definition:

Emotional intelligence (EQ) is a person’s ability to perceive, comprehend and manage their own feelings and emotions. EQ consists of five core skills, namely:

Self-awareness: the ability to recognise and comprehend one’s own mood and emotions, as well as how they affect others
Self-regulation: the ability to think before we act
Internal motivation: the drive to pursue and achieve one’s goals without expecting a reward
Empathy: the ability to recognise and comprehend others’ motivations and emotions
Social skills: the ability to socialise and manage relationships

Humans are inherently emotionally intelligent; however, we do need to take some time to assess and work on our own emotions. It’s important to note, that when it comes to increasing our emotional intelligence, practice makes perfect. We can increase and improve our emotional competencies one step at a time, and a little bit every day. The leaders of the most successful companies in the world demonstrate high levels of emotional intelligence, and rightfully so.

The importance of emotional intelligence in the workplace:

The decisions we make at work, and in our personal lives are emotionally charged and we often make choices based on intuition, or our gut feelings. In a work environment, where we work in teams, it’s important to understand the origin of these emotions that we base our decisions on, because then we can be more attuned to each other and each other’s emotions, leading to better decision-making within the team and business.

The globalisation of business has caused the significance of emotional intelligence to increase because we are working with people from different backgrounds and cultures. This increases the complexity of interactions dramatically, which means we must be more in touch with the emotions of others as well as our own emotions.

In a nutshell, emotional intelligence in the workplace comes down to understanding, communicating, managing emotions, building good relationships, and solving problems under pressure together, as a team. By having high levels of emotional intelligence in the workplace, employees and management alike can experience increased productivity, higher morale and excellent problem-solving abilities.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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