Tax Planning Basics for South African Small Businesses
The two provisional tax dates that run your year, why a nil IRP6 still has to be filed, and what genuinely reduces the bill - without quoting rates that change at every Budget.
Most small-business tax trouble in South Africa is not caused by aggressive planning gone wrong. It is caused by two dates in the year arriving before anyone had worked out what was owed, and by records that could not support a deduction when SARS asked.
This guide covers the rhythm you have to keep, what genuinely reduces the bill, and where the line sits. It deliberately quotes no rates or thresholds - those move at every Budget, and a number that is wrong by a year is worse than no number.
Two dates run your tax year
Provisional tax has two compulsory periods: the first due by the last business day of August, the second by the last business day of February.
File even when you owe nothing
An IRP6 must be requested and submitted for both periods even if the amount due is nil. A nil return still has to exist.
A deduction you cannot evidence is not a deduction
The expense being real is not enough. If you cannot produce the invoice and show the business purpose, it will not survive a query.
Planning is timing and structure, not invention
Legitimate planning changes WHEN income and expenses fall and HOW the business is structured. It does not create expenses that did not happen.
The provisional tax rhythm
Provisional tax is not an extra tax. It is the same income tax, paid in advance in two instalments, so you are not asked for a year's liability in one lump. Missing the rhythm is what turns a manageable bill into a penalty conversation.
First period — by the last business day of August
An estimate of your taxable income for the full year, with half the resulting tax paid now. For a business with a February year-end this is the 31 August deadline.
Second period — by the last business day of February
A revised estimate for the full year, less what you already paid in August. This is the one where a bad first estimate gets expensive, because underestimation is judged here.
Submit the IRP6 even if the answer is nil
SARS is explicit that a provisional taxpayer must request and submit an IRP6 for both periods even where nothing is due. 'I owed nothing so I did not file' is not a defence, it is a separate failure.
Keep the estimate honest
Underestimating your income at the second period attracts penalties and interest. The mechanism matters more than the percentages: a deliberate low estimate to defer cash is the thing being penalised.
What actually reduces the bill
Everything below is ordinary and legitimate. None of it requires a structure, a scheme, or anything you would be uncomfortable explaining.
Claim every genuine business expense, with the paperworkRequired
Rent, salaries, professional fees, insurance, subscriptions, the business share of a vehicle or a home office. The test is not whether the expense is real, but whether you can produce the invoice and show why the business needed it.
Claim depreciation on assets you already boughtRequired
Equipment, vehicles and machinery are written off over time rather than in one go. Businesses routinely forget assets bought two years ago are still generating a deduction today.
Use timing deliberately, not accidentallyRecommended
Where an expense is genuinely coming, whether it lands before or after year-end changes which year it reduces. That is legitimate planning. Inventing an invoice to fill a gap is not, and the difference is obvious to anyone reviewing it.
Check whether a small-business regime fits youRecommended
South Africa has regimes aimed at smaller businesses with reduced rates or simplified compliance, each with its own qualifying conditions. Whether you qualify depends on turnover, shareholding and what the business does - worth a specific conversation rather than an assumption.
The records that make it hold up
The difference between a deduction that survives a SARS query and one that does not is almost never the expense. It is the evidence.
Keep the source document, not just the bank lineRequired
A payment on a statement shows money left. The invoice shows what it bought and from whom. Only one of those supports a deduction.
Record the business purpose while you remember itRequired
A one-line note on a mixed-use expense at the time is worth more than a reconstruction two years later, which is when the question actually arrives.
Reconcile monthly, not annuallyRecommended
Bookkeeping done monthly turns provisional tax into a lookup. Done annually it turns both provisional deadlines into a scramble, which is where estimates go wrong.
Common questions
When is provisional tax due?
There are two compulsory periods. The first is due by the last business day of August and the second by the last business day of February. For a business with a February year-end, the first period lands on 31 August.
Do I have to file if I owe nothing?
Yes. SARS requires a provisional taxpayer to request and submit an IRP6 for both the first and second period even where the total due is nil. Owing nothing removes the payment, not the return - and treating it as optional is a separate failure from the tax itself.
What happens if I underestimate my income?
Underestimation at the second period attracts penalties and interest. The intent of the rule is to stop a deliberately low estimate being used to defer cash, so the practical protection is to base the second estimate on your actual year-to-date figures rather than on the first estimate repeated.
Can I still claim the learnership allowance?
Only for agreements entered into before 1 April 2024. The section 12H deduction is not available for agreements entered into after that date, and a good deal of advice still in circulation predates the change.
What tax rate will my business pay?
We deliberately do not quote rates or thresholds in this guide. They move at every Budget, and a rate that is a year out of date is worse than no rate at all because it looks authoritative. Get current figures from SARS or your accountant, and use this guide for the rhythm and the record-keeping, which do not change annually.
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