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As the sole employee and director do I have to pay PAYE or can I pay provsional tax bi-annually?

Posted 28 January 2016 under Tax Questions


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Graham says:
27 January 2016 at 9:28

I am an independent consultant. I have been operating since June 2015 and have been paying myself a salary and deducting PAYE
I have recently found out that I must be a provisional tax payer as well
Since I have started in June and have not deducted any expenses to arrive at my taxable income, it appears that with 2 months to go I have overpaid my tax significantly
from a cash flow perspective, I will only receive my refund around July/August
Am I able to not pay PAYE for the next 2 months and once I submit my provisional tax return for Feb will probably still be in credit or do I have to continue to pay PAYE

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TaxTimTaxTim says:
27 January 2016 at 18:32

As a company director, you should be paying tax in your company as well as your personal capacity.
Director's fees are deemed to be "salary" and therefore PAYE should be deducted every month from your salary before being paid to you.

What expenses are you looking to deduct in your personal capacity which would reduce your tax liability?

Your business related expenses should be deducted through your company (i.e. pty).


Graham says:
28 January 2016 at 8:35

Hi
Im sorry I sent a response yesterday to an email that was asking me to pay for the expert advice and I did not see the response, so please ignore my previous response

Thank you for you answer

I have training, and my membership with SAICA which was paid through my company - should those be business expenses to reduce my company tax

personal expenses I want to deduct would then be, rental, as I worked from home, a portion of my cell phone bill - and travel expenses as they are incurred in my personal capacity

Right now - even with my estimated income for the year - I have overpaid in PAYE - and I will most probably only be refunded in a year when I submit my ITR12 - am I still required to deduct paye even in this regard


TaxTimTaxTim says:
28 January 2016 at 19:17

If the training expenditure and SAICA membership fees are incurred in production of your income as a consultant, then yes you can deduct through your company.

Please work through our online questions to see if you are eligible to deduct home office expenditure
Can I deduct home office expenses?

If you have overpaid PAYE, then it should not be necessary to continue to deduct it. You must file a nil EMP201 tax return though.


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