PAYE payments during the COVID-19 and Lockdown period.

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PAYE payments during the COVID-19 and Lockdown period.

A new tax relief measure has been introduced by government as a result of the COVID-19 pandemic and the national lockdown. This measure stipulates that tax compliant businesses with an annual turnover of R100 million or less will be allowed to delay 35% of their employees’ tax liabilities which become due over the next four months (i.e. for a limited period ranging from 01 April 2020 – 31 July 2020 only. Take note that the period commences on 01 April 2020, and therefore the first applicable declaration on which a delay is available will be in respect of April 2020, to be submitted in May 2020). There will be no penalties or interest levied on the deferred amount. The remaining 80% must however by paid by the relevant due dates.

Employers should keep in mind that this deferment is applicable only in respect of the PAYE section of the monthly employer declaration (EMP201), and not the entire declaration.

The amount of 35% of the employees’ tax due that was not paid during the aforementioned period must be included in the gross employees’ tax due by the employer in six equal monthly installments, commencing on 7 September 2020 and ending on 5 February 2021.

Requirements to qualify for this tax relief measure are as follows:

  • The business must be tax compliant and must have been registered with SARS by 1 March 2020.
  • The tax relief will be available to only to small and medium sized businesses. These categories have been classified as businesses with an annual turnover not exceeding R100 million per annum.

It should be kept in mind that this tax relief will not be available to an employer or representative employer that has failed to submit any return in terms of any tax legislation, and has any outstanding tax debt, that is due or payable to SARS for the benefit of the National Revenue Fund. This however excludes agreements for which an instalment payment agreement exists or a compromise or debt write-off exists.

It should also be noted that interest and penalties will apply if the business has understated the PAYE liability for any of the four months.

Details regarding communications with SARS during the lockdown period are available on their website at www.sars.gov.za. You may also consult the Frequently Asked Questions on Tax Measures section relating to Tax Measures for Employees’ Tax, ETI and Provisional Tax available on the SARS website for further information.

For the moment, this is the information we have obtained. We will keep you updated should any further relevant information come to our attention.

Do you want to get the maximum tax benefit from you B-BBEE and skills development spend? Let us set up a bespoke B-BBEE and skills development solution for your business. We can help you maximise your skills development and B-BBEE benefit and put money back in your pocket through careful planning and implementation.

Contact your regional Training Portal representative to set-up an online meeting:

Sandton – Jean Du Plessis | jean@trainingportal.co.za | 074 453 3004

Bloemfontein – Danie Krige | danie@trainingportal.co.za |071 688 1656

Cape Town – Tobie van der Merwe | tobie@trainingportal.co.za | 079 690 5454

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