(Contact Melany Bydawell for further information.)

Very few managers can afford two or three days out the office for workshops and training sessions.

We are able to offer clients this eight module process, which provides an innovative mix of training and coaching which ensures the transfer of skills to the workplace and provides the busy manager with personalised input around real time issues. The programme involves a time investment of 6 hours a month, scheduled according to individual availability, with a total of 16 hours contact time.

The four month programme ensures the skills are embedded via one-on-one mentoring, coaching sessions to encourage reflection, real issue assignments and a complete workbook for post programme reference.

1. Fundamentals of Management
2. Self-Management for Leaders
3. Authentic Leadership and Personal effectiveness
4. Conflict Management, Communication and EQ
5. Employee engagement and managing diversity
6. The Manager as Coach and Performance Management
7. Organisation Systems and Processes to Improve Performance
8. Monitoring and Implementation of Strategy

The basic modules listed above can be augmented with personalised interventions tailored to the individuals or organisations specific requirements.

The Department of Health's white paper on NHI and a financing paper by the National Treasury have been completed and will be tabled in Cabinet shortly.

For almost two years, the National Treasury has been intending to issue a white paper that will describe how the NHI will be funded. This paper has still not been released, indicating the complexity of the matter.

At this stage, it is possible that a mandatory contribution by all employees to fund the NHI will be introduced. If this happens, this will be another "tax" for employers and payrolls to administer and be responsible for. Due to the processes that the implementation of such a requirement must go through, the earliest that NHI contributions could start is March 2016, and even that date is debatable.

If you don't already outsource your payroll and payroll administration to HRTorQue, contact [email protected].

Everything you do and say communicates something to someone. Similarly, everything you don't do and don't say, communicates, too. This is important for everyone to understand in both their business and personal lives and more particularly as a leader.

As a leader, your clients, employees, and other contacts read into your actions based on their expectations, perceptions, experiences and biases, and you can't not communicate. Leaders that understand that their success often relies on their communication skills are more likely to move in the right direction on all fronts.

With it, you can:
•  Build understanding
•  Increase productivity
•  Increase employee morale
•  Assist individuals in need
•  And much more!

Effective communication can set you apart from your competition and establish a good and healthy employee / employer relationship.

The use of a company car by an employee is a taxable fringe benefit based on the market value of the vehicle. However, car manufacturers that import vehicles calculate the fringe benefit at cost. To align the treatment of company car fringe benefits for all employees (whether or not they work for a vehicle manufacturer), government proposes that actual retail market value be used in all cases. This reform will be phased in over four years.

Adjustments are also proposed to treat employees who bear the costs relating to fuel and the upkeep (maintenance, insurance and licence) of their company car in a more equitable manner.

SARS has again started to focus on the allocation of travel allowances to taxpayers. This approach is closely linked to their efforts to close any remaining loopholes in the Employees Tax legislation. As part of this strategy the audit process now includes the following questions being asked to employers during the SARS reviews:

•	Provide a detailed description of the employee's position in the company and list the duties that they are required to perform.
•	Does the employee's position require that they do business travel in their own vehicle? If so please state the nature and frequency of such travel.
•	Does the employer cover any costs incurred by the employee for business travel? If they do they are required to provide a list of expenses paid for.
•	Provide details as to how the amount of a travel allowance is determined.

These questions are essentially designed to establish whether the travel allowances that have been allocated are legitimate and secondly whether the claims made by employees on their tax returns are a true reflection of their business travel obligations.

The most contentious issue that could be raised by such an investigation is whether the travel allowances allocated are realistic or justifiable. If SARS deem allowances not to be justifiable you can rest assured that the company will receive an in-depth PAYE audit in the near future. The implications for the employee could be direr as SARS could not only disallow that year's claim but also open assessments relating to previous years.

SARS are now also using quite clever techniques to source information that can assist in the auditing of travel claims. One of these is requesting information relating to company fuel and maintenance card payments in cases where the employer is subsidising fuel and maintenance costs. With service providers regularly recording the current mileage on invoices, SARS would have reliable third party evidence to compare against the odometer readings reflected on the employees' tax returns. You can imagine the embarrassment of having your tax return reassessed due to the uncovering of information of this nature.

This matter is made even more serious by the fact that employees are required to maintain logbooks in the format required by SARS. Any discrepancy identified by SARS would effectively mean that the log-sheets had been 'manufactured' for tax purposes. The consequences of this would certainly be catastrophic in terms of the administrative penalties levied against the taxpayer. On the topic of logbooks, it must be noted that SARS has recently published the format of the logbook that needs to be maintained for tax return reporting purposes. This logbook is available on the SARS website.

Whilst SARS are honing their audit and investigation skills, what happens in practice often makes it difficult to ensure legislative compliance and adherence to tax best practice. Employers are often pressured by employees or their tax consultants to allocate a travel allowance to an employee who is unlikely to leave the office for business purposes. If you as an employer cannot truthfully say that the employee is required to undertake business travel as a condition of their employment, then do not allocate a travel allowance to them. By allocating a travel allowance where it is not required, the employer is effectively assisting the employee to commit tax fraud.

Bearing in mind the increased SARS scrutiny in this area, employers need to take decisive action to limit their exposure to audit risk. It is suggested that employers draft a travel allowance policy detailing how travel allowances are allocated and in what situations employees are reimbursed for business-related travel. This will not only show SARS that the company has followed their guidelines in this regard, but also provide the employer with the strict parameters within which they must transact with employees. A clear policy and guidelines will also go a long way to limit the audit risk mentioned above.

If you have any questions regarding this article or need any assistance in this regard, please do not hesitate to contact Dave Beattie on 031 582 7410 or [email protected]. It is as good a time as any to make the necessary corrections, thereby avoiding the possibility of additional assessments being raised and encountering unpleasantness when dealing with SARS.

The Minister of Labour will introduce the Unemployment Insurance Amendment Bill into the National Assembly during 2014. This draft Bill, which will amend the Unemployment Insurance Act, 2001, has several important implications for employers and employees.

The Unemployment Insurance Fund (UIF) is a vehicle for payment of benefits to employees who become unemployed, take maternity leave or otherwise become entitled to benefits. Employers and employees contribute to the UIF. The proposed Bill aims to improve service delivery by the UIF.

"A further amendment will see the inclusion of individuals on learnerships (contract of employment contemplated in the Skills Development Act), and their employers, and Government employees and fixed term workers required to leave South Africa on expiration of their term will also now benefit from the UIF. Exclusion of these categories of employees was deemed unconstitutional and the draft Bill will seek to cover these employees.

New maternity benefits will see payment made at a rate of 66% of the earnings of the beneficiary at the time of the application. This provision also provide for the income replacement rate of 20% payable after 238 days until 365 days. An interesting amendment to the Act is that a contributor who has a miscarriage during the 3rd trimester or bears a still-born child, is now entitled to a full maternity benefit of 17 to 32 weeks.

Clause 9 also provides that a contributor is not entitled to benefit unless she was in employment, whether as a contributor or not, for at least 13 weeks before the date of application for maternity benefit. The clause that stipulates that a person should apply for maternity benefits eight weeks before a child is born will be deleted. This clause has caused confusion in labour centres and frustration for would-be and new mothers seeking to claim maternity benefits.

The draft Bill will further change maximum accrual of benefits from 238 days to 365 days in a four year period. This essentially extends the period of payment of an unemployed contributor from eight months to twelve months. Beneficiaries will also accrue one day's benefit for every four days of employment as a contributor. The period of application for unemployment insurance benefit has also been extended from 6 months to 12 months after the termination of the contract of employment.

Currently the Act states that every employer must inform the Commissioner of any change which occurred during the previous month with regards their employees. The proposed amendment requires the employers to provide the Commissioner with all employment information not just changes only.

SARS has recently sent a communiqué to registered Tax Practitioners regarding applications for tax clearances. Taxpayers have been informed that they will receive an instantaneous response as to whether their application for a tax clearance (tenders or good standing) has been approved, declined or selected for review. Where an application is declined the reasons for this decision will be provided immediately. This will be applicable whether applying via eFiling or at a SARS branch.

SARS states that these improvements are a result of the introduction of a 'more robust, automated screening process'. SARS believes that this approach is a result of the application of a 'risk management' approach rather than a 'gate keeping' approach. This new approach now provides SARS with the ability to implement a multi-layered verification process that will reduce the possibility of circumventing tax clearance processes and procedures.

Taxpayers have been advised that when rectifying non-compliance issues at a SARS branch it could take up to 5 working days to determine the compliance of the taxpayer. The process of issuing a tax clearance will begin once the compliance status of the taxpayer is determined. In instances where taxpayers make payments by cheque to rectify any non-compliance, the consideration for a tax clearance will be delayed for a period of 7 days to ensure that the cheque is cleared.

Taxpayers should note that where the registered details applied on the TCC do not correspond with SARS records (e.g. the company registration number captured on the application does not match the company registration number on SARS records for all the tax reference numbers captured on the application), the TCC applications could be declined and will have to be re-submitted. To avoid these unnecessary delays taxpayers must ensure that their registered details are accurate and up-to-date across all the tax types they are registered for at SARS.

SARS has also reminded taxpayers that:
•  In order to apply via eFiling, either the Income Tax number or VAT number must reflect on the eFiler's
   profile. It is also important to note that the Income Tax reference number remains a mandatory field to
   complete on the application.
•  In considering an application SARS considers all tax reference numbers linked to the legal entity.
•  A tax clearance will only be issued to taxpayers if SARS records reflect that the taxpayer is compliant.
•  A tax clearance will only be issued in the registered and trading names as reflected in SARS records.

The process of applying for a tax clearance certificate is only onerous if there are unresolved tax matters with SARS. Even though a tax clearance certificate may not be needed at a specific time, it may be prudent to apply for one (good standing) to see whether the entity's tax affairs are in order. This will reduce the trauma of being informed of various problem areas when you desperately need a tax clearance for business purposes.

Should you have any questions in this regard please contact Dave Beattie on 031 582 7410 or [email protected].

The controversial E-Toll system is not only hogging the media headlines but also causing a headache for employers. We have been approached by many employers wanting to know the impact of E-Toll expenses on the company car fringe benefit and travel allowances.

There are three scenarios that need to be considered when evaluating this matter. The first of these is where an employee is reimbursed at the prescribed SARS rate for business travel. Whilst current tax legislation does not address this issue it is believed that an employee may be reimbursed for any E-Toll expenses without any adverse tax consequences.

The second scenario involves those employees who are allocated a fixed travel allowance to cover business-related travel. Employees will need to decide whether they want to claim the actual expenses incurred whilst undertaking business travel (now including E-Toll expenses) or use the travel costs as per the annually published SARS travel table.

The last scenario involves the use of a company car. The employer will be responsible for the payment of any E-Toll expenses and will be able to claim these expenses as a deduction for Income Tax purposes. The employee will continue to pay fringe benefit tax on the use of the company vehicle.

It is anticipated that SARS will publish guidelines in this regard in the near future. As soon as such guidelines are available they will be summarised and feedback provided. Should you have any questions in this regard kindly contact Dave Beattie on either 031 582 7410 or [email protected].

Update on Demographics

The new amendments to the Employment Equity Act were gazetted on 16 January 2014. As an employer, this additional piece of legislation can leave you in financial ruin if you don't comply with the new amended provisions. There has been a call from Dept of Labour to use national statistics when compiling the plan, however, this has been retracted and organisations now have the discretion in terms of using either national or regional statistics when completing their plan.

•  Do you have an Employment Equity Plan (EE Plan)?
•  Do you have an EE Plan for each region and office for your organisation?
•  Does it have all the legislative EE Amendments just passed on 16 January 2014?
•  Do you know what the new legislative EE measures and activities are?

If you answered no to any one of these questions, or if you don't know the answer, please contact Nicky Hardwick: [email protected].

A Government Gazette notice was published on 26 February which deals with the following:
•  Increase of maximum amount of earnings on which the assessment of an employer shall be calculated;
•  Increase in monthly pensions;
•  Manner of calculating compensation; and
•  Increase in monthly pensions.

The prescribed amount in terms of section 83(8) of the Compensation for Occupational Injuries and Diseases Act, 1983 has increased to R332,479 per annum with effect from 1 April 2014. The previous amount was R312,480 (effective from 1 April 2013).

SARS has recently published a notice stating that the IRP 3(a) form has been updated to comply with legislative changes.
 
These changes include:
•  Two new directives reasons regarding 'employer owned policy proceeds' were added:
    -  Taxable
    -  Exempt Section 10(1)(gG)
•  The severance benefit reason has been enhanced to align to the Income Tax Act No. 58 of 1962 severance
   benefit definition, which means:

-	The leave and pro-rata bonus must not be included as severance benefits as these amounts are only paid at the time of the termination of employment.
-	It is important to note that these amounts are regular income, and must be included in gross income, and not as a severance benefit (termination) payments.

Should you have any questions in this regard please contact Dave Beattie on either 031 582 7410 or [email protected].

The South African Revenue Service set out initiatives aimed at giving taxpayers a better idea of how revenue is earned and spent, and the government a better idea of who earns what and where they spend their money.

According to the latest set of stats, the average tax rate of individual taxpayers was 20.2%. While 10% of individuals earned 38.5% of total taxable income, they were liable for 58.17% of personal income tax. The personal income tax register had grown from 13.7 million people in March 2012 to 15.4 million by March last year after it became compulsory for all employees to be registered. Only about 6 million of them were liable to submit tax returns as the rest fell below the submissions threshold.

Head Office (Durban)   Phone: 031 564 1155 Fax: 031 564 1228   Email: [email protected] Website: www.hrtorque.co.za   Address: 163 Umhlanga Rocks Drive Durban North, KwaZulu-Natal     Sales Melany Bydawell: 031 582 7425 / 083 441 5618 [email protected] Payroll & HR Administration Karen van den Bergh: 031 582 7413 / 082 891 1722 [email protected] Human Resources / Employee Relations Melany Bydawell: 031 582 7425 / 083 441 5618 [email protected]

Employment Equity & Skills Development Melany Bydawell: 031 582 7425 [email protected] Nicky Hardwick: 031 582 7418 [email protected]   Tax Dave Beattie: 031 582 7410 [email protected] Executive Coach and Team Interventions Melany Bydawell: 031 582 7425 [email protected]   Payroll Third Party Administrator Kacey Chetty: 031 582 7409 [email protected]   Accounts Cheryl Naidoo: 031 582 7408 [email protected] Dispatch Karl van der Merwe: 031 582 7407 [email protected]