I have a courier service company that is not registered yet. Does this qualify me to be regarded as an independent contractor?
Because my company is not registered, SARS advised that the company's income should be added to my salary income for tax purposes. Are there any deductions from the company that I can deduct when submitting my tax return to SARS?
Whether or not you are perceived as an "employee" or independent contractor depends on a few factors. The tax consequences for each are very different and therefore it is important to consider the below questions carefully so as to treat the income from your business correctly.
Do you have a variety of customers? Or will you be working mainly for one customer? Are your hours of work controlled by the customer? Are any tools/equipment provided by your customers? e.g. car, cellphone, laptop Do you have anyone supervising you? i.e. someone from the customer company Is your office based at a particular customer?
All business related expenses would be deductible against your income. e.g. telephone costs, car wear and tear (remember to keep a logbook and record business kms travelled), stationery, internet etc You cannot deduct any personal expenditure and therefore will need to pro-rata some expenses (eg. telephone) between business and personal.
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