Provisional Tax Durban covers the IRP6 estimates and payments made twice a year by companies, trusts and individuals earning income that is not subject to PAYE. It is a payment mechanism, not a separate tax.
The penalties are what catch people. Underestimate the second period badly enough and SARS adds a 20% understatement penalty on top of the shortfall.
Your taxpayer type, year end and expected taxable income. Practitioners in Durban will quote for the estimate and submission.
Get Quotes From Accountants in DurbanWho Is A Provisional Taxpayer
- All companies. Every registered company, trading or not.
- All trusts. Other than certain special trusts.
- Individuals with non-PAYE income. Rental, freelance, business or substantial investment income above the prescribed thresholds.
- Directors and members. Where remuneration is not fully subject to PAYE.
- Not most salaried employees. PAYE already covers the liability.
A salaried employee with only PAYE income and modest interest is generally not a provisional taxpayer. Add rental income or freelance work and that usually changes.
Deadlines And The Estimate Rules
| Period | Deadline | Estimate basis |
|---|---|---|
| First | Six months into the year, end August for a February year end | At least half the basic amount from the last assessment |
| Second | Last business day of the year of assessment | 90% of actual taxable income, or the basic amount, where income is under R1 million |
| Second, income over R1 million | Last business day of the year of assessment | At least 80% of actual taxable income |
| Third, optional | Seven months after year end for a February year end | Top-up to limit section 89quat interest |
The second period estimate is where the risk sits. Getting it right requires reasonably current management figures, not a guess in the last week of February.
Penalties And How To Avoid Them
- Underestimation penalty. 20% of the shortfall where the second period estimate falls below the 80% or 90% threshold.
- Late payment penalty. 10% of the amount due.
- Interest. Charged under section 89quat on underpayments from the effective date.
- Administrative penalty. For simply not submitting the IRP6.
- The fix. Use current management accounts for the second estimate, and make a third top-up payment if the year turned out better than expected.
Accurate provisional estimates depend on up-to-date bookkeeping. See Accountants Durban for firms that handle both.
Provisional Tax Durban Prices
Indicative Durban ranges, excluding VAT, per submission.
| Taxpayer | Indicative fee per submission | Notes |
|---|---|---|
| Individual, simple estimate | R450 - R950 | Based on prior year |
| Individual, with business income | R950 - R2,200 | Requires current figures |
| Small company | R650 - R2,000 | Based on management accounts |
| Medium company | R2,000 - R5,000 | Detailed estimate and workings |
| Trust | R950 - R3,000 | Including distribution planning |
| Third top-up calculation | R650 - R2,500 | Optional, limits interest |
| Annual provisional service, two submissions | R1,200 - R8,000 | Often bundled with the annual return |
| Penalty remission request | R1,500 - R6,000 | Where the estimate was reasonable |
Indicative Durban ranges, not a quotation. An estimate is only as good as the figures behind it. If management accounts are not current, expect the firm to quote for bringing them up to date first.
Get the estimate done before the deadline rather than after the penalty.
Compare Provisional Tax PractitionersFrequently Asked Questions
When is provisional tax due?
The first period is due six months into the year of assessment, which is the end of August for a February year end. The second is due by the last business day of the year of assessment. An optional third top-up follows seven months after year end.
Who has to pay provisional tax?
Companies, trusts and individuals who earn income not subject to PAYE above the prescribed limits. This includes rental income, freelance income, business profits and significant investment income.
What is the 80% rule?
Where taxable income exceeds R1 million, the second period estimate must be at least 80% of the final figure or SARS levies a 20% underestimation penalty. Below R1 million, the estimate must be at least 90% of the actual, or equal the basic amount from the last assessment.
What happens if I pay late?
A 10% late payment penalty applies to the amount due, plus interest. The penalty is charged on the payment, not the return, so submitting on time but paying late still attracts it.
Can I skip the first period if I expect a loss?
You still have to submit the IRP6, but the estimate can be nil where that is genuinely expected. Not submitting at all attracts an administrative penalty.
Related Accounting Services in Durban
Accountants Durban is a free quote-comparison service. The accounting, tax and audit work is carried out by the independent firms and practitioners that quote you, and your engagement is with the firm you appoint. Ask each firm for its registration details, professional body membership and a written engagement letter before appointing anyone.
Provisional Tax Durban. Compare IRP6 preparation fees from registered practitioners covering Durban.
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