COVID 19 Relief Summary
As level five of lockdown nears its end, we feel it necessary to give a summary of the relief options available to your business and employees to ensure you are making the most of the relief available to you.
Below is a high-level summary of the funding relief available:
- Up to R 500 000 soft loan at an interest rate of prime less 5%
- Business must be classified as either a small, micro or medium enterprise
- 100% owned by South African citizens
- 70% of employees must be South African
- SARS registered and tax COMPLIANT
- UIF compliant
- Registered on the National SMME database (www.smmesa.gov.za)
- Up to R 1 000 000 at no interest
- Annual turnover of qualifying SMME to be less than R 20 million per annum.
- The minimum number of employees at the SMME at the time of application is five Employees, this excludes family members.
- Loan to SMME currently limited to R 1 million per applicant.
- Open to all South African registered businesses that operate in South Africa.
- The loan will not attract any charges and no capital repayment for a period of up to 12 months from the pay-out of the loan.
- Successful loan applicants will be required to open an account with Al Baraka Bank, free of any charges except cash deposit fees.
Pay-As-You-Earn (“PAYE”) Relief
- The COVID-19 Tax Relief for PAYE is the payment of 65% of the total liability and deferral of 35% of the total PAYE liability for the month.
Note: The 35% deferral is only applicable on the PAYE liability declared on the original EMP201 return submitted to SARS. Any increase in the PAYE liability through a request for correction will not be taken in consideration when the 35% deferral is calculated.
- The COVID-19 Tax Relief for PAYE is available for the four-month period from 1 April 2020 to 31 July 2020. The first deferment can be claimed in your April 2020 EMP201 return.
- Have a gross income of R100 million or less during the year of assessment ending on or after 1 April 2020, but before 1 April 2021
- Be tax compliant
- Be registered for PAYE as at 1 March 2020
- After the 7th of August, SARS will determine the six equal payments for the total amount that you have deferred and include it in the monthly Statement of Account, which you can request from the 15th of August.
Skils Development Levy (“SDL”) Relief
- For the four-month period from May to August 2020, employers who are registered for SDL do not have to declare and pay SDL to SARS.
- The SDL payment holiday will be automatically provided. The zero amount SDL Liability will be defaulted on the EMP201 return for the four-month period from May to August 2020.
Employment Tax Incentive (“ETI”) Relief
- President Ramaphosa announced measures to assist employers to provide financial stability to their employees who earn less than R 6 500 per month. These measures include an extension of employees who qualify for ETI, an additional amount up to R750, and the monthly refund payment of any excess ETI claimed.
- The COVID-19 Tax Relief for ETI is available for the four-month period from April 2020 to July 2020. The first extended ETI can be claimed in your EMP201 for April 2020.
- An additional amount up to R750 can be claimed for each qualifying employee.
- ETI can only be offset against the PAYE payable to a maximum of either the PAYE liability or the ETI calculated for the month. If the PAYE liability is less than the ETI calculated, the excess (ETI carried forward) will be paid as a refund, provided that you are tax compliant.
- The employer is required to be tax compliant.
Unemployment Insurance Fund (“UIF”) Temporary Employer Relief Scheme (“TERS”) Relief
- A benefit to employees whose income has been impacted due to the COVID 19 pandemic.
- Employers are to make an application on behalf of their employees through the dedicated UIF TERS portal (https://uifecc.labour.gov.za/covid19/)
- All you require is your Department of Labour UIF reference number to register on the portal.
The President mentioned further relief options that are becoming available as part of the R 500 billion support package and we will provide more information on these options as they become available.
If you are interested in pursuing any of these further, please contact your PKF Partner or member firm for assistance.
Associate Director - PKF Durban
Partner – Tax | PKF Durban