Recent changes in South African taxation laws requires all businesses who are registered with SARS for employees’ tax purposes to also be registered with SARS for skills development, irrespective of whether they are excluded from paying the levy. Further changes in the BEE codes stipulates that all companies must comply to all elements of the BEE scorecard with skills development one of the three priority elements. A lot of focus is therefore placed on skills development for businesses across all industries.

The South African Government has however put in place Employment Tax Incentives (ETI) for those businesses that comply to the Skills Development Act. One such incentive is for learnerships, which is classified as Category C or D training on the Learner Programme Matrix (LPM).

South African taxation laws makes provision for a deduction to an employer in addition to any other deductions allowable for any registered learnership agreement. Two types of deductions are allowable: an annual allowance, to which the employer is entitled in any year of assessment in which a learner is a party to a registered learnership agreement; and a completion allowance during any year of assessment in which the learner successfully completes the learnership.

A “registered learnership agreement” comprises an agreement registered in accordance with the Skills Development Act and entered into between the learner and the employer. The allowances are up to R80 000.

It is therefore possible to comply to the priority BEE scorecard element of skills development and qualify for a tax rebate if your business implements training. In addition, if you contract an accredited private service provider rather than doing in-house training, your business can claim the full cost of the service provider as part of your training spend versus only 15% of the spend for in-house training.

At TTBISA we make it easy for you to not only comply with the skills development element of the BEE scorecard but also to benefit from the tax incentive. Our SETA accredited learnership qualifications meets all the requirements to benefit from the maximum possible tax deduction. We can do all the work and paperwork for you, including recruiting an unemployed, community member. By absorbing the learner into your company at the end of the learnership you are able to score the maximum possible points on the BEE scorecard in addition to qualifying for a SARS tax deduction.

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