May 2026 Newsletter | Tax, Compliance & Business Advisory Insights SA
MAY 2026 NEWSLETTER
A Word from Our CEO
In this edition, we have focused on three critical areas that reflect the full lifecycle of a business: maintaining compliance, making strategic operational decisions, and, where necessary, exiting responsibly. From understanding deregistration and reinstatement, to evaluating when to hire an internal accountant, and navigating the complexities of tax—each topic speaks to one core principle: disciplined financial management is the backbone of sustainable success.
Too often, businesses treat compliance as a once-off or reactive exercise. Whether it is the unintended deregistration of an entity due to overlooked obligations, or challenges arising from poor tax management, the consequences can be both costly and disruptive. At the same time, growth brings its own demands—requiring more structured financial oversight, and in many cases, the introduction of internal accounting capacity.
What stands out across all these areas is the importance of being proactive. A business that understands its tax responsibilities, maintains compliance with regulatory requirements, and invests in the right financial expertise is far better positioned to grow, adapt, and withstand challenges. Equally, when the time comes to close a chapter, a well-managed and compliant exit reflects professionalism and preserves future opportunities.
At our firm, we see our role as more than just service providers. We are partners in your journey—supporting you through the complexities of compliance, helping you make informed strategic decisions, and ensuring that every stage of your business is managed with care and precision.
We encourage you to reflect on your current position:
- Are your compliance obligations up to date?
- Do you have the right financial structures in place to support your growth?
- Are you managing your tax responsibilities strategically?
The answers to these questions will shape not only your current operations, but the long-term success of your business.
Let us continue building businesses that are compliant, well-governed, and positioned to thrive in an increasingly complex environment.
ACCOUNTING
When to hire an Internal Accountant: pros, cons and strategic considerations
As businesses grow, financial management becomes increasingly complex. What may begin as basic bookkeeping can quickly evolve into a need for deeper financial oversight, strategic planning, and real-time decision support. One of the key questions business owners face at this stage is: When is the right time to hire an internal accountant?
Making this decision requires balancing cost, control, and the evolving needs of the business.
What is an Internal Accountant?
An internal accountant is a full-time or part-time employee responsible for managing the company’s financial records, reporting, compliance, and often contributing to strategic financial decisions. Unlike external accountants or consultants, an internal accountant works within the business on a daily basis.
When should you consider hiring an Internal Accountant?
While every business is different, there are common indicators that suggest it may be time to bring accounting expertise in-house:
1. Business growth and increased transaction volume
As revenue grows, so does the complexity of financial transactions. Manual processes or outsourced services may no longer be sufficient to keep up.
2. Need for real-time financial information
Business owners who require up-to-date financial insights to make decisions benefit from having someone on-site who understands the numbers intimately.
3. Compliance and regulatory pressure
Increased regulatory requirements—tax filings, payroll compliance, and reporting standards—often necessitate dedicated oversight.
4. Cash flow management challenges
If managing cash flow becomes difficult, an internal accountant can provide better forecasting, budgeting, and control.
5. Strategic decision-making needs
When financial data needs to inform pricing, expansion, or investment decisions, having an internal resource becomes valuable.
Advantages of hiring an Internal Accountant:
1. Immediate access to financial information
An internal accountant provides real-time reporting and quick responses to financial queries, enabling faster decision-making.
2. Deeper understanding of the business
Being embedded in the business allows for a better grasp of operations, leading to more tailored financial insights.
3. Improved financial control
Internal oversight can strengthen internal controls, reduce errors, and improve accountability.
4. Enhanced planning and forecasting
Regular budgeting, forecasting, and performance analysis become more robust with dedicated resources.
5. Support for growth
An internal accountant can play a key role in scaling the business, from managing costs to supporting funding applications.
Disadvantages to consider
1. Higher cost
Hiring an internal accountant involves salaries, benefits, training, and overhead costs, which may be significant for small businesses.
2. Underutilisation risk
In smaller or less complex businesses, the workload may not justify a full-time role.
3. Limited skill set
One individual may not cover all areas of expertise (e.g. tax, audit, advisory), potentially requiring additional external support.
4. Dependency risk
Relying heavily on a single internal resource can create operational risk if that individual leaves.
Internal Accountant vs Outsourced Accounting
Many businesses find value in a hybrid approach:
Outsourced accounting provides cost-effective compliance and specialist expertise
Internal accounting offers real-time insight and operational integration
The right balance depends on the size, complexity, and strategic goals of the business.
Practical recommendations
Conduct a cost-benefit analysis before hiring;
Assess whether the role should be full-time, part-time, or hybrid;
Clearly define the scope of responsibilities;
Consider starting with outsourced services before transitioning in-house; and
Ensure proper internal controls and oversight structures are in place
Conclusion
Hiring an internal accountant is not just an operational decision—it is a strategic one. Done at the right time, it can significantly enhance financial control, support growth, and improve decision-making. However, premature hiring can strain resources without delivering proportional value.
Business owners should carefully evaluate their current needs, future plans, and available resources before making this investment. As always, the goal is not just to manage finances, but to use them as a tool for sustainable success.
TAXATION
Understanding the main types of taxes in South Africa: A practical guide for businesses
Tax compliance is a fundamental aspect of running a successful business. However, many business owners find the tax landscape complex and, at times, overwhelming. A clear understanding of the main types of taxes applicable to businesses can help ensure compliance, avoid penalties, and support better financial planning.
In this article, we unpack four key tax categories that most businesses encounter: Income Tax, Value-Added Tax (VAT), Payroll Taxes, and Dividends Tax.
1. Income Tax
Income tax is levied on the taxable income of a business. For companies, this is calculated based on profits after allowable deductions.
Key considerations:
Companies are taxed at a flat rate (subject to current legislation); however Small Business Corporations and Turnover Tax are taxed at a predetermined scale.
Provisional tax payments are typically required twice a year.
Accurate record-keeping is essential to substantiate deductions.
Why it matters:
Income tax directly impacts profitability. Proper tax planning can help optimise liabilities while remaining compliant.
2. Value-Added Tax (VAT)
VAT is an indirect tax applied to the supply of most goods and services. Businesses registered for VAT act as intermediaries, collecting tax on behalf of the government (SARS).
Key considerations:
Registration is compulsory once turnover exceeds the prescribed threshold.
VAT is charged on sales (output tax) and claimed on purchases (input tax).
Returns must be submitted periodically (e.g. bi-monthly).
Why it matters:
Effective VAT management ensures cash flow stability and prevents costly penalties arising from incorrect filings.
3. Payroll Taxes (PAYE, UIF and SDL)
Payroll taxes are associated with employee compensation and must be deducted and paid over to the relevant authorities.
Components include:
PAYE (Pay-As-You-Earn): Income tax withheld from employee salaries.
UIF (Unemployment Insurance Fund): Contributions from both employer and employee.
SDL (Skills Development Levy): Applicable to employers above a certain payroll threshold.
Key considerations:
Employers are responsible for accurate calculation and timely submission.
Monthly returns and payments are required.
Annual reconciliations must be completed.
Why it matters:
Non-compliance can result in penalties and reputational risk, while proper management supports employee trust and organisational integrity.
4. Dividends Tax
Dividends tax is a withholding tax applied when a company distributes profits to its shareholders.
Key considerations:
The tax is withheld by the company before payment to shareholders.
Certain exemptions may apply (e.g. where the shareholder is another company).
Declarations and supporting documentation must be maintained.
Why it matters:
Understanding dividends tax is essential for effective profit distribution and shareholder planning.
Common challenges for businesses
Keeping up with changing tax legislation.
Managing multiple tax deadlines.
Ensuring accuracy across different tax types.
Integrating tax compliance with overall financial strategy.
Practical recommendations
Maintain accurate and up-to-date financial records.
Implement a tax calendar to track key deadlines.
Regularly review your tax compliance status.
Seek professional guidance to ensure accuracy and efficiency.
Align tax planning with your broader business strategy.
Conclusion
A solid understanding of the different types of taxes is essential for every business owner. While compliance may seem complex, it also presents an opportunity to strengthen financial discipline and support long-term sustainability.
By proactively managing income tax, VAT, payroll taxes, and dividends tax, businesses can reduce risk, improve cash flow, and position themselves for growth.
BUSINESS ADVISORY
Reinstatement of deregistered Companies and Close Corporations (CCs): causes and how to rectify
The deregistration of a company or Close Corporation (CC) can have serious legal and financial consequences for business owners. Fortunately, in many cases, reinstatement is possible. Understanding the causes of deregistration and the steps required to rectify it is essential for maintaining compliance and protecting business continuity.
What is deregistration?
Deregistration occurs when a company or CC is removed from the official Companies and Intellectual Property Commission (CIPC) register of entities. Once deregistered, the business ceases to exist as a legal entity. This means it can no longer trade, enter into contracts, or hold assets in its own name.
Common causes of deregistration
Non-compliance with CIPC annual returns
The most common cause of deregistration is failure to submit annual returns to CIPC. If returns are outstanding for two or more years, the entity may be deregistered.Failure to maintain compliance with CIPC statutory requirements
This includes failure to update company information, such as director details or registered address.Voluntary deregistration
Entities that are no longer trading or have no assets may apply for voluntary deregistration.Inactivity or dormancy
Companies that appear inactive or fail to respond to compliance notices may be deregistered by the authorities.
Consequences of deregistration
Loss of legal personality
Inability to conduct business
Freezing or loss of assets (which may vest in the government)
Directors and members may face personal liability for business activities conducted after deregistration
How to reinstate a deregistered Company or CC
Reinstatement restores the entity’s legal status as if it had never been deregistered. However, the process requires strict compliance.
1. Determine the reason for deregistration
Identify whether deregistration was due to annual return non-compliance or another reason, as this will determine the reinstatement process.
2. Lodge outstanding annual returns
All outstanding annual returns must be submitted via CIPC, along with the applicable penalties.
3. Submit a reinstatement application
A formal application must be lodged with CIPC, typically including:
A completed reinstatement form
Supporting affidavit explaining the reasons for non-compliance
Proof that the company was active (if applicable)
4. Tax compliance with SARS
Ensure that all outstanding tax returns are submitted and that the entity is in good standing with SARS. This may include:
Income tax returns
VAT returns (if applicable)
PAYE submissions
5. Supporting documentation
Depending on the case, additional documents may be required, such as:
Bank statements
Financial statements
Proof of business activity or assets
6. Follow-up and confirmation
Once submitted, CIPC will review the application. Upon approval, the entity will be reinstated, and its status updated to “in business.”
Practical Recommendations
Maintain compliance: submit annual returns on time and keep company records updated.
Monitor status regularly: periodically check the entity’s status with CIPC.
Engage professionals: accountants and company secretarial experts can ensure ongoing compliance and assist with reinstatement processes.
Act promptly: the sooner reinstatement is initiated, the easier it is to recover the entity’s operations and assets.
Conclusion
Deregistration does not necessarily mark the end of a business. With the correct steps and professional guidance, reinstatement is achievable. However, prevention through proactive compliance remains the most effective strategy. Businesses are encouraged to prioritise regulatory obligations to avoid disruption and potential financial loss.
