Dear Tim,What happens to the tax threshold for when one is obligated to pay tax (R63k) when you work for a company for the first few months of the financial year and then you quit to start your own venture from home. Does the threshold change? Since I am working for myself my expenses will change as now I will incure the cost of running my business from home and will have to set aside money for my medical aid, retirement fund etc. as this will no longer be paid by my employer.
If your business is in your name and you trade as a sole trader, then the threshold stays the same, individuals are taxed according to the tax tables on income as a whole, regardless if from a business or as a result of employment. The current threshold for the 2015 year is R70 700.
Get Tax Deadline Reminders, News and Tips
We'll tell you when you need to file, along with tax tips and updates.