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Business Accounting | Accounting Services

Frequently Asked Questions In Business Accounting

Tinashe Munyati, Chartered Certified Accountant, Fourways

September 24 2018

What Do Accountants Do?

The primary duty of an accountant is to prepare financial records and ensure that they are correct. Some of the specific duties of an accountant include the following:

Prepare tax returns.

Make sure that the company’s financial statements comply with government laws.

Make recommendations to management on ways to decrease costs and increase income.

Prepare reports to explain their findings to upper management.

Meet with private clients to provide financial advice.

I pay a lot of tax every year – what can I do?

It is important to review both the business operations as well as your personal tax situation simultaneously to properly balance the amount of tax you pay in both areas, so you never pay tax unnecessarily.

Should I remain a sole-proprietor or should I incorporate?

There are two main reasons to incorporate; one is liability, if your business puts you at risk (your actions may cause damage to property) then there may be a chance that you could be sued for damages. As a sole-proprietor, your personal assets, cash, home, and vehicle would be at risk.

The second is a tax advantage, if your business is achieving sales/revenues above a certain annual amount, then you’re no longer operating a “casual” business and need to elevate your business posture.

Do I need to be VAT Registered?

You are required by law to register for VAT if your business turnover exceeds the annual registration threshold.

Is my car a business expense?

This will largely depend on the type of business that you are in and the structure that you trade under. In the majority of cases, if you require a motor vehicle to travel between suppliers, meetings, places of business, etc, there will be some form of deduction available to you.

Do I need to register for PAYE (Payroll)?

Even if you have only one employee or you are a sole Director employee you should be registered for PAYE and make all the relevant submissions.

My business is incorporated; do I need a business bank account?

Yes. Any income that is NOT deposited into your business bank account could be perceived as your personal income and would then be taxed at your personal tax rate. A business bank account and its fees are an expense to your business and can be deducted within your business taxes.

When should you hire an accountant?

When you’re self-employed

when your tax situation is complicated

when you know little about taxes

When you have a high income

When you want to save time

What business premises costs can I claim as tax deductible expenses?

You can claim expenses for:

rent for business premises

business and water rates

utility bills

property insurance

security

repairs and maintenance of business premises and equipment

using your home as an office (only the business part)

Disclaimer:

This article is for information purposes only and you are advised to seek professional advice from your own accountant as your individual situation will vary.