Question 2

(Marks: 20)

Gerald De Beer is a 38-year-old vibrant, outgoing young man who has been employed as a digital artist at InnovateTech Solutions (Pty) Ltd ("InnovateTech") since 1 May 2019.

Details of Geralds remuneration and expenses for the year ended 29 February 2024 are as follows:

A cash monthly salary of R80 000.

Gerald receives a monthly travel allowance of R5 000. He drives a Toyota Corolla sedan valued at R300 000 (including VAT). No logbook details were provided to InnovateTech as Gerald did not maintain an accurate logbook. On average, he drives a total of 3 100 kilometres per month, with approximately 2 200 kilometres for business purposes. No deduction will be allowed by SARS as a result of no logbook being maintained.

InnovateTech provides gym membership benefits to its employees, including Gerald. As part of their wellness program, InnovateTech covers a portion of the gym membership fees for employees who choose to participate. Employees are responsible for a nominal monthly charge of R100, which is deducted directly from their payslip. Gerald was a member of a nearby fitness centre for the entire year of assessment, with a monthly membership cost of R550.

In addition, Gerald contributes R2 400 per month to InnovateTechs pension fund. The company also contributes R2 400 per month on Geralds behalf.

Gerald discovered his talent for attentive listening and effectively addressing the concerns of his colleagues and clients. He completed a master course in life coaching in 2020. With his newfound expertise, Gerald started his own life coaching business in the same year, offering consultations both online and in person at a rented office in his local town.

Revenue relating to Geralds life coaching business amounted to R462 700 for the year ending 29 February 2024. During the year, Gerald incurred expenses directly related to his business amounting to R136 200.

Gerald is a provisional taxpayer. He received his 2022 assessment with taxable income of

R1 060 000 on 01 September 2022 and the 2023 assessment was received on 1 December 2023 reflecting taxable income of R1 330 000.

Gerald accurately calculated and paid his first provisional tax payment at R15 459.

The Independent Institute of Education (Pty) Ltd 2023

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2023

Required:

Q.2.1

Calculate the monthly employees tax withheld by InnovateTech Solutions (Pty) Ltd from Gerald De Beers remuneration.

Show all calculations and round off all amounts to the nearest rand. Include nil value items in your answer, provide a reason for a nil value.

(8)

Q.2.2

Q.2.3 Q.2.4

Calculate Geralds second provisional tax payment for the 2024 year of (3) assessment, assuming that he based this payment on an estimated taxable

income of R1 200 000.

Calculate if any further tax payments are required by Gerald for the 2024 year of (7) assessment and determine the final date of payment to avoid s89quat interest.

Determine whether any penalty with regards to an underestimate may be applied to Gerald.

(2)