By Adrian Galley
“Has anyone had a call from the Taxman to say you owe him money?” An awkward murmur rumbles through the gathering, but no-one’s putting up their hand.
“Not?” Still, there are no volunteers.
“Then chances are pretty good that He owes you money”. And with that the room falls into a rapt silence. “But he’s not going to tell you that: you have to ask for it”.
Independent tax practitioner Tess Fairweather was addressing a breakfast meeting of SAGA members in Cape Town, and everyone there was suddenly glad they’d rolled out of bed a little earlier than usual on this particular Saturday morning.
In line with the subject of my previous blog, Tess emphasises the need for actors to remember that they are each, in effect, an independent business entity. Being self-employed, a freelance actor doesn’t benefit from the country’s stringent labour laws; on the other hand, as a business, they are entitled to all the tax-breaks that other commercial enterprises take for granted. Perhaps we’d do well to consider SARS as a sleeping partner in our business affairs.
“What? Sleeping with the enemy!”
Well, not really. You see, the Receiver of Revenue actually wants businesses to succeed; if he squeezed them too hard, he’d cook his own goose! So, he calculates his slice based on a company’s profit, not its turnover. Profit is what’s left of your income after you’ve subtracted all the expenses you’ve incurred in making sure your business is able to continue operating. As your silent partner, SARS thoughtfully takes 25% of your turnover and keeps it aside, while you take care of the marketing and delivery of your services. If at the end of the tax period there’s no profit, he gives it all back. That’s right; it’s yours to spend as you wish, but not if you don’t claim it.
Think of it as a windfall from your stokvel.
In fact, if you earn an average of R5000 a month or less, SARS doesn’t want anything; the first R63 556 of your business profit is tax-free. If your total income was less than that in the 2013 tax year, and if you had 25% deducted at source, you’ll get a windfall of R15 889. No questions asked; you don’t even have to claim expenses. For any income above that figure, you can legitimately subtract the cost of running your business.
Just be sure to keep a good record of everything you fork-out.
For instance, any business needs to advertise to survive: your headshots and the cost of producing a show-reel are fully deductible, as is publication in The Limelight and your listing on Voicebank. And, of course, it goes without saying that your SAGA dues are also fully tax-deductible. You’d be surprised at the many expenses you are entitled to claim: from a portion of your gym membership, haircuts and manicures to a percentage of your rent, garden-services and even armed-response security.
But SARS insists your claims are both reasonable and justifiable; your sleeping partner may be fair, but he’s not dumb. So, you might have a hard time explaining the relevance to your business of your child’s dentist bill or that group outing to Gold Reef City. On the other hand, if you are lucky enough to have lunch with an influential director, and you’re feeling flush, by all means pick up the tab. Just make sure you keep the slip.