Johannesburg, Thursday, 26 November 2009 - Many employers are unaware of the amendments in The Taxation Laws Amendment Act, 2009, that simplifies learnership allowances which is deductible from income.
“These allowances qualify for an additional deduction for employers over and above their normal remuneration costs,” says Muneer Hassan, project director: tax at the South African Institute of Chartered Accountants (SAICA).
The training contract must, of course, qualify for the deduction through contracts registered in accordance with the Skills Development Act or apprenticeship contracts registered in terms of the Manpower Training Act.
Hassan advises that the following simplifications now apply to learnership allowances in the wake of recent legislation:
- A commencement and completion allowance of R30 000 without any reference to the learner’s remuneration. For disabled learners the allowances rise to R50 000.
- The recoupment provisions are being removed and provision is made for early terminations before a 12 full month period. Here the initial employer is entitled to claim a pro rata portion of the commencement allowance.
- If the learnership extends over two years of assessment, the commencement allowance is allocated pro rata between both fiscal years based on the calendar months applicable to each year.
- For multi-year learnerships, the commencement allowance is now allowed in each successive year, as opposed to being allowed in the first year with all subsequent commencement allowances deferred to the completion of the contact.
- Where learners change employers mid-stream, each employer will be entitled to a pro rata share of the commencement allowance in the year of the change.
- The completion allowance is the number of years duration of apprenticeship multiplied by R30 000 in the year of successful completion of the learnership.
These simplifications become effective for years of assessments ending on or after 1 January 2010.
Communications Coordinator: Corporate
The SA Institute of Chartered Accountants (SAICA)
Tel: 011 621 6898
Tel: 011 506 7300
The South African Institute of Chartered Accountants (SAICA), South Africa’s pre-eminent accountancy body, is widely recognised as one of the world’s leading accounting institutes. The Institute provides a wide range of support services to more than 29 000 members who are Chartered Accountants and hold positions as CEOs, MDs, board directors, business owners, chief financial officers, auditors and leaders in their spheres of business operation. Most of these members operate in commerce and industry, and play a significant role in the nation’s highly dynamic business sector and economic development.
SAICA serves the interests not only of the Chartered Accountancy profession, but also of society in general through its key objective of upholding professional standards and integrity. The pre-eminence of South African Chartered Accountants [CAs(SA)] nationally and internationally attests to the successes achieved by SAICA on a broad global canvas. SAICA’s members enjoy the privilege of using the highly regarded and prestigious CA(SA) designation. Members of SAICA are subjected to a Code of Professional Conduct, which provides guidelines for ethical and professional behaviour. Fundamental ethical principles to which CAs(SA) are expected to achieve include:
- Professional Competence and Due Care;
- Confidentiality; and
- Professional Behaviour.
SAICA members serve on international accounting bodies including; the Trustees of the International Accounting Standards Committee Foundation (IASCF), the International Accounting Standards Board (IASB), the International Financial Reporting Interpretations Committee (IFRIC) and the Council of the International Federation of Accountants (IFAC). SAICA is also a member of The Global Accounting Alliance (GAA).
For more information visit www.saica.co.za