Should I register a business?

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Piettt

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Hi.

I have a daytime job but will start doing after hours IT support for another company soon. It will probably only be a couple of hours a month.

Should I register a CC or something else or is it possible to be employed by two companies? I have no real experience with tax so please bear with me.

Thank you!
 
You don't have too.

You will just need to declare the extra income to SARS and pay whatever tax is applicable.
 
Necropolis said:
You don't have too.

You will just need to declare the extra income to SARS and pay whatever tax is applicable.
Click to expand...

Thanks for the reply! Will I have to pay the tax over to SARS on a monthly basis or will it only be calculated at the end of the financial year?
 
Piettt said:
Thanks for the reply! Will I have to pay the tax over to SARS on a monthly basis or will it only be calculated at the end of the financial year?
Click to expand...

Not sure...

But I am sure someone here will be able to answer you on that one.
 
Registering a business has a massive tax benefit. A good friend of mine was doing freelance work without a registered business and tax was 50 %.
 
[XC] Oj101;15822094 said:
Registering a business has a massive tax benefit. A good friend of mine was doing freelance work without a registered business and tax was 50 %.
Click to expand...

Thanks!
 
Piettt said:
Hi.

I have a daytime job but will start doing after hours IT support for another company soon. It will probably only be a couple of hours a month.

Should I register a CC or something else or is it possible to be employed by two companies? I have no real experience with tax so please bear with me.

Thank you!
Click to expand...

What is your daytime work?
 
Piettt said:
Hi.

I have a daytime job but will start doing after hours IT support for another company soon. It will probably only be a couple of hours a month.

Should I register a CC or something else or is it possible to be employed by two companies? I have no real experience with tax so please bear with me.

Thank you!
Click to expand...

Ask to get paid in cash, this way SARS won't snoop around where they don't belong. :D
 
[XC] Oj101;15822094 said:
Registering a business has a massive tax benefit. A good friend of mine was doing freelance work without a registered business and tax was 50 %.
Click to expand...
This is not possible...max tax bracket is 41% currently, prev 40% (before rebates and adjustments)

It is not necessarily the best case to register a business it depends on your circumstance.
However in your case it might be because you might be able to apply as a Small Business.

You will need to do the homework, but it really comes down to what you foresee with the company
is it something for a short period or long?
The longer the period (in my exp) it will probably be more beneficial to register a company.
If this is helping a few friends out here and there, once in a while, just keep it easy and keep it as a sole trader.
Especially as initial registration costs and annual accounting fees could end up eating your profits.

Legal ramifications are different though, for a seperate company vs individual capacity as well.
The opinion above is more based on costs.
 
Sorry I just noticed this is for another company where you will most likely be deemed
to be an employee (depending on your agreement, like how many hours you work for them).
You wont be able to get the Small Business application then.

Remember the tax isnt as simple as indiv 40% vs 28% corp tax.
You still need to withdraw that money which incurs more tax, as well as other pitfalls.
This is why you would need to speak to a professional to understand your situation.

Labour broking isnt my set of expertise you would have to speak to an expert on that
but I highly doubt there will be any benefit.
 
[XC] Oj101;15822094 said:
Registering a business has a massive tax benefit. A good friend of mine was doing freelance work without a registered business and tax was 50 %.
Click to expand...

rubbish.
 
bchip said:
This is not possible...max tax bracket is 41% currently, prev 40% (before rebates and adjustments)

It is not necessarily the best case to register a business it depends on your circumstance.
However in your case it might be because you might be able to apply as a Small Business.
Click to expand...

He will unfortunately not be able to apply as a small business and therefore will not benefit from progressive tax rates.
 
If you just planning on having the one client, I wouldn't bother registering a company.

You can be employed by two companies, at the end of the year when you do your tax return you will have two IRP5's and probably be required to pay in tax. Both employers will tax you as if you only working for them and take into account the Primary Rebate (R13,257 for 2016).

You could probably pay additional tax throughout the year, however I would rather put some money aside every month and pay a lumpsum.
 
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