Great news for SA Institute of Business Accountants (Saiba) members: The Companies & Intellectual Property Commission has given Saiba permission to operate its journalistic services through Accounting Weekly during the lockdown period as announced by President Cyril Ramaphosa on 23rd of March 2020.
Essential services are those such as the provision of groceries, care for the elderly and sick, telecommunications, energy and other services deemed necessary for the wellbeing of the country. Journalistic services also fall into this category. , which means we will be keeping you informed of all the latest developments and guiding you through this difficult time so that you can keep your head above water as an accountant, and thereby assist your clients.
As a responsible organisation, we are observing social distancing and taking the utmost care to ensure the well being of our staff and members. So while we continue to operate on all cylinders running, our staff are operating remotely.
What the CIPC permission means is that Saiba staff and members are subject to the same lockdown provisions as everybody else except that Accounting Weekly can continue to operate as an essential service.
This is a crucial time for accountants. Saiba members’ services are vitally needed during this moment of crisis. As Saiba CEO Nicolaas van Wyk pointed out last week, accountants are needed more than ever to assist their clients in navigating through these turbulent times.
Thousands of small businesses are going to fund themselves unable to meet their monthly expenses at the end of this month.
This is the text of a letter sent this week to Saiba members explaining how they can assist their members:
As accountants, your services are needed to assist businesses in accessing the financial and other support they will need to tide them over the Covid-19 lockdown.
SA Institute of Business Accountants (Saiba) has compiled the following information that you can email out to your clients. Hundreds of thousands of businesses have been impacted by this virus. They will need help in submitting applications for state-assisted finance, and this is where accountants must step up to the plate to take control of this process.
This is the broad outline of a letter you should send out to your clients without delay. This is an add-on service and will help cement your relationship with the your clients. When the virus crisis passes – as it will – you will be an indispensable and trusted advisor to your clients. Don’t miss this opportunity.
Small business funding
There are broadly two types of funding available to SMMEs in financial distress as a result of the Covid-19 crisis.
- Funding through the Department of Small Business Development which can be accessed at www.smme.gov.za.
To qualify, business must meet the SMME criteria as shown below. SMMEs are able to apply for financial or non-financial assistance in order to meet employee, supplier and overhead obligations. The qualifying criteria:
• Turnover below R50 million for the previous financial year.
• Business 100% South African owned.
• 70% of employees employed by the business must be South African citizens.
• Business must be tax compliant.
Information supplied by government indicates that funding of up to R500,000 is available and applications are likely to take up to 14 days. Successful applications will be audited in the future and will have to have supporting documentation and invoices to show how the money was expended. Anyone failing the audit will have to repay the money at prime plus 10%.
- Small Enterprise Finance Agency (SEFA) Funding
The requirementsto access SEFA funding are the same as for SMME SA Funding, but is restricted to the following sectors:
• Retail, wholesale and tourism industry
• Production industry
• Agriculture industry
• Construction industry
• Mining industry
The Industrial Development Corporation will disburse and manage this fund. Please note that as with SMME funding, an audit will be carried out in future and those failing the audit will be required to repay the money at penalty interest rates. More information can be accessed at: http://www.sefa.org.za/
Accessing UIF benefits for employees
The Unemployment Insurance Fund (UIF) is to be utlised to make funds available to:
- Companies that close their businesses during the lockdown, providing a flat amount equal to R3,500 per employee for the duration of the lockdown or a maximum of three months;
- Reduced work time (in which case the UIF benefit is equivalent to the different between what the employer normally pays and the normal UIF benefits applicable)
- Illness benefits (in which case affected employees are entitled to claim 1 credit day for every four days of work, up to a maximum of 365 days for every four years of completed work)
- Death benefits payable to the beneficiaries of the decease (payable on the same basis as illness benefits mentioned above)
Application forms can be downloaded from the Department of Employment and Labour website: www.labour.gov.za. You can also email firstname.lastname@example.org and will receive an automated response with the documents to be filled in. The response email will also guide you through the application process.
The TERS programme (Temporary Employer/Employee Relief Scheme) will be expanded and expedited – funded by the UIF to assist distressed companies in the form of subsidies to fund directly workers’ wages. One of the conditions is that the company embarks upon a turnaround or sustainability programme. TERS will be overseen by the CCMA (Council for Conciliation, Mediation and Arbitration). To obtain application forms and all relevant details, please send an email to: infoTERS@labour.gov.za.
If the CCMA finds that you do not fully follow the sustainability programme, penalties and repayment will be levied at punitive interest rates.
This is a special fund created by government and funded by both the private and public sectors (the Rupert and Oppenheimer families have agreed to contribute R1 billion each). Details of the fund are available at https://www.solidarityfund.co.za/.
It is not yet known how to apply for funding from this source. It is advised that you check daily at the above web address for more details.
Any employee contracting the Covid-19 virus while employed by you (and not while at home) can apply for compensation under the Compensation Act. Please note that these applications must be made in person by the employee to the Compensation Commissioner’s offices. More information can be accessed here: https://www.gov.za/services/compensation-fund/register-compensation-fund
As your accountant, we can help with the administration behind these applications. We can assist you in accessing these funds. This is an add-on service to the usual accounting services we provide.
Access to SMME SA Funding, Solidarity Fund or the SEFA Fund will require up-to-date
financial statements, management statements and financial forecasts for the next 12 months. This will require fast work, so anyone seeking to access these funds must indicate so immediately. Understand also that there will be an avalanche of requests for funding, so the sooner you act, the better.
We look forward to hearing from you.